Rent Assistance bill now €518m

gurramok

http://www.tribune.ie/news/article/2010/sep/05/rent-aid-bill-of-over-500m-propping-up-house-price/

A disgrace how its risen that much over the years. The govt controls 50% of the rental market which is propping up rents especially in the cities. Recently there was a slight reduction in the limits for outside the cities but they hardly touched the city rent limits.

Lets hope at the next budget, this subsidy is drastically reduced and workers who are affected by the high rents in the private rental sector are rewarded for working by way of reduced govt influence on how much they pay in the rental market.

Tribune wrote:

THE state is paying more than €500m a year on rent supplements, with economists increasingly concerned that the outlay is propping up a false economy in the housing market.

While the cost of both purchasing and renting properties has declined in Ireland, experts believe there are signs that state-sponsored rent bills are out of sync with market values.

Landlords who once shunned rent allowance tenants are now welcoming them with open arms.

According to figures obtained by the Sunday Tribune, assistance with rental payments across the entire country cost the taxpayer €517,923,074 in 2009.

This represented a total of 87,802 assistance claims, equating to an average payment of €5,900 a year per claimant.

Describing the situation as helping to create a "false rental market", Friends First economist Jim Power said the government ought to examine existing structures to make sure it was getting value for money.

"It's widespread across the country and it has been increasingly evident over the years that this situation has been evolving," he said.

"It has cost the state a fortune and it's clearly a false rental market. People are being given the money to spend on rent, and they spend it on rent, and so landlords have not reacted to prevailing market conditions.

"There is also a huge cost to the state and in an environment where we are on the brink of bankruptcy the government should be looking at this."

Rent assistance is still distributed through the old health board system. The eastern region accounted for the largest single outlay, of €266.3m, last year. This was followed by the south (€64.2m), the south east (€47.8) and the west (€39.9m).

The total of successful scheme applicants in the eastern health board region was nearly three times that of the south region. In the west Dublin area alone, those seeking rent supplement in the suburbs of Blanchardstown and Finglas accounted for a bill of €31.7m last year.

Fine Gael councillor for Dublin West Kieran Dennison said he has noticed a marked change in rental habits since the collapse of the economy.

"It's still propping up house prices. There are places in Corduff where you could buy a council house for not far off €120,000 to €130,000 and yet I am surprised when people tell me they are getting €1,100 in rent supplement," he said.

"There is no relationship between the price of the house and what you pay in rent. It's distorting the whole housing market and putting a floor under the rental market."

Idbatterim

if we are looking at cutting the easiest money again in the budget, Id start with the rent allowance, I cant see too many hearts bleeding for the landlords! I think it may be just a bit easier than going back to the PS for pay cuts, or pensioners etc...

jmayo

Can't see ff wanting to do this.
After all a lot of those landlords are developers, builders and other assorted ff voters and even members.

Hell it might even affect frank "lost at sea" fahy or ivor "where do i live" callely, two noted ff landlords. :mad:

stepbar

The sad thing is that I'd say of the 500 million spent on Rent Allowance, SFA is taken back through the taxation system given the obscene tax allowances some folk have in this country.

amacca

Agree with OP.


such a pity Jim (its the right time to buy/theres great value out there) Power is quoted in the article


that's one talking head I cant believe the meeja still include when they need an auld soundbite.

they should never be allowed on the national airwaves/print media if they get it as drastically wrong as this..... They should be afraid to raise their heads and brass necks


its like rubbing salt in the wound to have the same expert who advocated buying now talking about the market being propped up ...even if he is correct this time.

Count Dooku

jmayo wrote: »

Can't see ff wanting to do this.
After all a lot of those landlords are developers, builders and other assorted ff voters and even members.

FG and LP are not exception
Of coarse, Labour will hide it behind their usual hypocrisy about protecting “the most vulnerable”, but idea is the same – take as much as possible from taxpayers in addition to their income in public sector

zielarz

I demand the government to stop arificially increasing rent and house prices using my hard earned money!!!

lmimmfn

That money would pay for about 2500 houses @ 200k each. After 10 years 1/3rd of that total could be removed by actually buying the houses. So theres something seriously wrong that the country has so many ghost estates and the rent bill is that high

Personally i dont think there should be any rent allowance with dole, just a queue for social housing with no landlords involved.

AlekSmart

Gurramok posted ....

Lets hope at the next budget, this subsidy is drastically reduced and workers who are affected by the high rents in the private rental sector are rewarded for working by way of reduced govt influence on how much they pay in the rental market.

I think this is the last thing that the Government will touch.

The PRAA scheme has been allowed to baloon out of all proportion into something now regarded as an automatic right of passage for all those seeking to set up on their own.

Any meaningful reduction (c.50%) stands a very good chance of kicking off a potentially nasty response amongst it`s recipients and our Government knows that only too well.

Instead,we can expect further raids on the income of those bothering to present themselves for work,and perhaps even an attempt to downvalue the savings of that sector.

The Government have most likely watched the final speeches of Nicolae Ceaucescu before hopping into the helicopter....and yes..I understand there Is a helipad within Leinster House. :mad: