Government to cut rent supplement

Icepick · 17-01-2012 8:37pm

I also find it ridiculous that:
1, RA is paid in cash to the claimant and it's their duty to pay the landlord. If they don't pay, the landlord has to go through a gruelling eviction process, which costs time and money.
2, Database of landlords with RA tenants is not compared with PRTB and Revenue databases to identify tax evaders

A Disgrace · 17-01-2012 9:33pm

If this move reduces rents across the board, then I'll be happy. I simply do not see it happening though. And with people renting rather than buying now, surely that'll only drive prices higher?

woodoo · 17-01-2012 9:38pm

Icepick wrote: »

I also find it ridiculous that:
1, RA is paid in cash to the claimant and it's their duty to pay the landlord. If they don't pay the landlord has to go through a gruelling eviction process, which costs time and money.

Yeah that needs to change.

MagicSean · 17-01-2012 9:42pm

Hopefully this will be repeated in 6 months.

jased10s · 17-01-2012 10:31pm

nama is a joke and an old boys bailout club.
It does not know it's arse from it's elbow.

My partner deals with nama everyday and she is so frustrated by them.

Tragedy · 18-01-2012 1:44am

Can anyone clarify the "50% of the market is controlled by RS"?

The figures I could find on total amount of people renting in Ireland were very fuzzy, and seemed to indicate that there were 200,000 HOMES registered with PRTB, not 200,000 tenants. This would make the % of the market 'subsidised' by rent supplement much, much smaller.
Also, why no estimates for unregistered renters? Most people that I know of in College in Limerick were renting and only a handful in accommodation registered with the PRTB, and those in college accommodation also wouldn't be counted.
Similar story in Dublin(though a vastly higher proportion living at home, obviously). Also know plenty of working people renting off the books.

I really don't buy this 50% figure, and I honestly don't feel that these cuts will have anything but a negligible impact on rental prices - they'll have more than a negligible impact on a lot of lives though.

Also, could anyone explain why single people sharing in Dublin had their RS cut by almost 25% yet plenty of others seemed to get off easy?

gurramok · 18-01-2012 9:45am

Tragedy wrote: »

Can anyone clarify the "50% of the market is controlled by RS"?

I really don't buy this 50% figure,

http://www.dsfa.ie/GA/Press/PressReleases/2010/Pages/pr100610.aspx?cssFont=Contrast

“The Department of Social Protection funds approximately 50% of the private rented accommodation in the country and with that level of influence on rents, it is essential that the maximum rent limits for rent supplement reflect real prices so that landlords are charging a fair rent and the State pays a fair price,” Minister Ó Cuív stated today (10th June 2010).

“Our priority is to ensure that the 95,000 households supported by rent supplement can secure quality accommodation at a fair rent and that landlords are not charging artificially high rents. Reducing the rent supplement rent limits to reflect real prices will assist us to do that and will promote a fair rent.

snubbleste · 18-01-2012 1:56pm

Could someone clarify this scenario?
The Dept. have imposed lower maximum rent supplement ceilings and increased the minimum contribution the tenant has to make by €6 (€11 for a couple).
In the Dáil last year, the Minister stated that if there was an increase in the tenant's minimum contribution by €5pw would save the State €25m. As it happens the increase is far more.

So does the lowering of the ceilings save the Dept. another €22m on top of that?

djpbarry · 18-01-2012 3:12pm

gurramok wrote: »

“The Department of Social Protection funds approximately 50% of the private rented accommodation in the country...

This figure doesn't make sense to me either. For example, €500 million is alleged to have been spent by the state on rent supplement in 2009. If 95,000 properties are in receipt of the supplement (granted, I’m mixing figures from different points in time), that works out at an average of just under €440 per household per month. I find it very hard to believe that this is sufficient to cover the rent on half the private rented accommodation in Ireland.

Furthermore, as far as I am aware, people renting properties from local authorities can claim rent supplement, so there’s no reason to believe that all of that €500 million went to private landlords.

gurramok · 18-01-2012 3:41pm

djpbarry wrote: »

This figure doesn't make sense to me either. For example, €500 million is alleged to have been spent by the state on rent supplement in 2009. If 95,000 properties are in receipt of the supplement (granted, I’m mixing figures from different points in time), that works out at an average of just under €440 per household per month. I find it very hard to believe that this is sufficient to cover the rent on half the private rented accommodation in Ireland..

Houseshares and rural dwellings?

djpbarry · 18-01-2012 3:57pm

gurramok wrote: »

Houseshares and rural dwellings?

What about them?

antoobrien · 18-01-2012 4:01pm

djpbarry wrote: »

What about them?

1 person in a house/aparment share means that the property would be counted as a dwelling getting a payment

gurramok · 18-01-2012 4:02pm

djpbarry wrote: »

What about them?

Perhaps they contribute to the 'low' figure in response to your statement?

that works out at an average of just under €440 per household per month. I find it very hard to believe that this is sufficient to cover the rent on half the private rented accommodation in Ireland.

djpbarry · 18-01-2012 4:23pm

antoobrien wrote: »

1 person in a house/aparment share means that the property would be counted as a dwelling getting a payment

It sure would, but gurramok is telling us that 50% of the entire rental market is covered by rent supplement. Now, I don’t know whether that’s 50% of the value or the volume, but I don’t see how €500 million could possibly cover either.

djpbarry · 18-01-2012 4:23pm

gurramok wrote: »

Perhaps they contribute to the 'low' figure in response to your statement?

I still don’t know what you’re getting at – see my post above.

gurramok · 18-01-2012 4:39pm

djpbarry wrote: »

I still don’t know what you’re getting at – see my post above.

Write to the Minister if you need clarification or do not believe the figure.Also RS is based on the amount of humans claiming than how many beds you need.

djpbarry · 18-01-2012 4:43pm

gurramok wrote: »

Write to the Minister if you need clarification or do not believe the figure.

I don't need to - it quite clearly doesn't add up.

I seem to recall challenging you on this 50% figure before - are you still going to stick by it even though, based on the available data, it clearly doesn't make sense?

gurramok · 18-01-2012 4:55pm

djpbarry wrote: »

I don't need to - it quite clearly doesn't add up.

I seem to recall challenging you on this 50% figure before - are you still going to stick by it even though, based on the available data, it clearly doesn't make sense?

I'd rather stick by an official figure than one that maybe made up on a forum. What figure do you think it should be?

antoobrien · 18-01-2012 5:15pm

djpbarry wrote: »

I don't need to - it quite clearly doesn't add up.

I seem to recall challenging you on this 50% figure before - are you still going to stick by it even though, based on the available data, it clearly doesn't make sense?

It'd be interesting to see how much RS is being paid to people in shared accommodation vs renting the property. If the majority of the money is being paid for a room in a house share, it'd distort the average figure (which I think is the point that gurramok is attempting to make).

ardmacha · 18-01-2012 5:15pm

50% of the rental may (or may not) be covered by RS. But it is unevenly distributed. RS may have little or no relevance to rents in D4, but considerable relevance in D11. Google employees may not really be in competition with those receiving RS, so there may be an impact on the market.

djpbarry · 18-01-2012 6:02pm

gurramok wrote: »

I'd rather stick by an official figure...

But it's not an official figure - it's just something (apparently) said in passing by Éamon Ó Cuív. If it was an official figure, there would be some data to back it up.

gurramok wrote: »

What figure do you think it should be?

I don't know what the actual figure is. But you're the one telling us that 50% of Ireland's rental market is controlled by rent supplement and the "extortionate" rents demanded by Ireland's landlords will tumble down when RS is reduced. The onus is on you to support your own position and so far you've produced little to convince me that the above is likely.

antoobrien wrote: »

It'd be interesting to see how much RS is being paid to people in shared accommodation vs renting the property. If the majority of the money is being paid for a room in a house share, it'd distort the average figure (which I think is the point that gurramok is attempting to make).

I'm not disputing the fact that RS influences the rental market - it has to. I'm simply stating that gurramok is significantly over-stating the influence.

ardmacha wrote: »

50% of the rental may (or may not) be covered by RS. But it is unevenly distributed. RS may have little or no relevance to rents in D4, but considerable relevance in D11. Google employees may not really be in competition with those receiving RS, so there may be an impact on the market.

Sure - once again, I'm not disputing that there is an impact, I'm disputing the scale of the impact.

snubbleste · 18-01-2012 6:56pm

Just to quote the then Minister Ó Cuív from 7 July 2010 when asked about the effect rent supplement has on the property rental market

There are currently over 95,500 tenants benefiting from a rent supplement payment - an increase of 60 per cent since the end of 2007. Current data on the total number of private rented sector tenancies is not readily available from any one source. The most recent information available from the Central Statistics Office published in 2007 indicates that there were 141,000 private rented dwelling units in 2006. The PRTB annual report states that at 31st December 2008 there were 206,000 tenancies registered representing some 354,000 tenants. It is clear that the rent supplement scheme which represents in the region of 50% of the private rented market plays a large role in the private rented sector. Accordingly, it is essential that State support for rents are kept under review, reflect current market conditions and do not distort the market in any way. Rent limits achieve this purpose.

gurramok · 18-01-2012 7:15pm

djpbarry wrote: »

But it's not an official figure - it's just something (apparently) said in passing by Éamon Ó Cuív. If it was an official figure, there would be some data to back it up.
I don't know what the actual figure is. But you're the one telling us that 50% of Ireland's rental market is controlled by rent supplement and the "extortionate" rents demanded by Ireland's landlords will tumble down when RS is reduced. The onus is on you to support your own position and so far you've produced little to convince me that the above is likely.

I said houseshares may have an affect on that 440 a month figure. If a number of houseshares(lets say 3 for a 3bed house\duplex) affects the market rate for a 3bed via RS, its probably true. RS is based on human claimants so it does add up to affect the market rate. Working couples have to compete with that.

snubbleste's quote backs this up as the statement did mention tenants receiving RS rather actual number of dwellings.

Also to mention, i've competed with RS tenants for accommodation in various areas including D4.

What is my own view of these reductions? Market rents will come down to the base level as set out in the RS rates.

Tragedy · 18-01-2012 7:36pm

snubbleste wrote: »

Just to quote the then Minister Ó Cuív from 7 July 2010 when asked about the effect rent supplement has on the property rental market

So I was right! The 50% figure was based on a huge colossal error.

95,500 individuals claiming RS vs ~200,000 HOUSEHOLDS registered with PRTB(and 354,000 tenancies which wouldn't cover subletting).

We're already at it being less than 25% of the market.

Add in off the books renting, and I don't believe it's absurd to assume it could be as little as 15%.

So, cutting RS to 15% of the entire rental market will reduce market rates across the entire 100% to the RS level?

thebman · 18-01-2012 7:40pm

djpbarry wrote: »

But it's not an official figure - it's just something (apparently) said in passing by Éamon Ó Cuív. If it was an official figure, there would be some data to back it up.
I don't know what the actual figure is. But you're the one telling us that 50% of Ireland's rental market is controlled by rent supplement and the "extortionate" rents demanded by Ireland's landlords will tumble down when RS is reduced. The onus is on you to support your own position and so far you've produced little to convince me that the above is likely.
I'm not disputing the fact that RS influences the rental market - it has to. I'm simply stating that gurramok is significantly over-stating the influence.
Sure - once again, I'm not disputing that there is an impact, I'm disputing the scale of the impact.

The actual figure of 50% if I remember correctly comes from here:

http://www.rte.ie/news/2010/0610/rent.html

95,000 households are supported by rent supplement, which the Department of Social Protection says is about half of the total private rented market in Ireland.

After that news article, my guess is chinese whispers.

gurramok · 18-01-2012 8:02pm

Tragedy wrote: »

So I was right! The 50% figure was based on a huge colossal error.

95,500 individuals claiming RS vs ~200,000 HOUSEHOLDS registered with PRTB(and 354,000 tenancies which wouldn't cover subletting).

How do they define a household for RS? The same as a tenancy?

The minister might have been indicating tenancies instead of tenants to reach that 50%, its vague. I'm of the assumption that a minister with his own data would not lie about his figures and is correct in his maths. Not a single economic commentator has corrected him as saying the figures are wrong.(Ronan Lyons included)

Tragedy · 18-01-2012 8:19pm

gurramok wrote: »

How do they define a household for RS? The same as a tenancy?

The minister might have been indicating tenancies instead of tenants to reach that 50%, its vague. I'm of the assumption that a minister with his own data would not lie about his figures and is correct in his maths. Not a single economic commentator has corrected him as saying the figures are wrong.(Ronan Lyons included)

There aren't 100,000 households in receipt of RS, there are 100,000 claimants.

Also, any figures that don't even TRY estimate off the books renting are laughably unreliable at best.

djpbarry · 19-01-2012 12:28am

gurramok wrote: »

I said houseshares may have an affect on that 440 a month figure. If a number of houseshares(lets say 3 for a 3bed house\duplex) affects the market rate for a 3bed via RS, its probably true. RS is based on human claimants so it does add up to affect the market rate.

I honestly cannot make head nor tail of that.

gurramok wrote: »

snubbleste's quote backs this up...

snubbleste essentially quoted the same thing you did – it leaves us none the wiser. But I must say, I find it mildly amusing that a Fianna Fáil TD’s vague figures on something property-related are being accepted without question.

gurramok wrote: »

...i've competed with RS tenants for accommodation...

How could you possibly know that?

gurramok wrote: »

Market rents will come down to the base level as set out in the RS rates.

Countrywide? Why?

Liam Byrne · 19-01-2012 12:37am

antoobrien wrote: »

Rabidlamb wrote: »

http://www.rte.ie/news/2012/0116/rent.html

€22m is far less a cut than many had feared although the €270 figure quoted would seem disproportionate.
Perhaps it's being weighted higher in more expensive areas.

They'd do better looking at what they're renting for their own use. The HSE are renting dozens of buildings in Galway, while buildings and facilities that they already own are not being used. A house bought in 2000 for 400k, which was supposedly for use by the Regional Occupational Health Service, was still empty 9 years later.

That's nothing......Johnny Ronan's company owes us a fortune and we're still paying him rent for government offices in Dublin, FFS!

Deduct the rent from the amount he owes us!

But no. Not in this fvcked-up backwater of a sh1thole.

Business as usual for the cronies, including our taxes (via rent supplements and NAMA) keeping them well-paid despite being failures while the rest of us foot the bill!

Liam Byrne · 19-01-2012 1:04am

antoobrien wrote: »

Rabidlamb wrote: »

http://www.rte.ie/news/2012/0116/rent.html

€22m is far less a cut than many had feared although the €270 figure quoted would seem disproportionate.
Perhaps it's being weighted higher in more expensive areas.

They'd do better looking at what they're renting for their own use. The HSE are renting dozens of buildings in Galway, while buildings and facilities that they already own are not being used. A house bought in 2000 for 400k, which was supposedly for use by the Regional Occupational Health Service, was still empty 9 years later.

That's nothing......Johnny Ronan's company owes us a fortune and we're still paying him rent for government offices in Dublin, FFS!

Deduct the rent from the amount he owes us!

But no. Not in this fvcked-up backwater of a sh1thole.

Business as usual for the cronies, including our taxes (via rent supplements and NAMA) keeping them well-paid despite being failures while the rest of us foot the bill!

Government to cut rent supplement

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