Why is rent allowance so low?

Cliona99

I read a thread here called 'Why is RA so generous?' and I laughed.
Because I can't find anywhere I can afford to live. Where I am, and for a person in my circumstances, this http://www.daft.ie/searchrental.daft?id=1342231 is out of my price range.

So, are rents too high? Or is RA too low?

Pawwed Rig

Hi

The purpose of rent allowance is to give people access to accommodation. Judging by your post below I am assuming you are single with no children and are entitled to €390 if you choose to live on your own or €230 if you choose to share.

A quick search on Daft shows me that there are some properties available at this price so you can choose one of these. It may not be in the area in which you would wish but this is the situation you are in. I am working and not living in the area where I would wish so you're not being discriminated against.

With that said, I don't think it is too high either. It should be at a level to allow people accommodation at the bottom of the market which I think it is at.

astrofool

In reality, it should probably be lower, as it's artificially propping up the rental market, the place you live on RA should not be comparable to that which those on the lowest wage that does not qualify for RA can afford to live.

Anynama141

astrofool wrote: »

In reality, it should probably be lower, as it's artificially propping up the rental market, the place you live on RA should not be comparable to that which those on the lowest wage that does not qualify for RA can afford to live.

Agreed - in most of the country it is way higher than it should be. In the main cities, it's probably about right where it is.

Ray Palmer

astrofool wrote: »

In reality, it should probably be lower, as it's artificially propping up the rental market, the place you live on RA should not be comparable to that which those on the lowest wage that does not qualify for RA can afford to live.

Except this has been proven not to be the case when they cut rent allowances in Dublin at least.

djimi

astrofool wrote: »

In reality, it should probably be lower, as it's artificially propping up the rental market,

Is it? Or it he rental market keeping RA higher? Surely they affect each other equally.

Zamboni

Ray Palmer wrote: »

Except this has been proven not to be the case when they cut rent allowances in Dublin at least.

Just because you keep saying it, does not make it true.


Your "logic"...

Rent allowance rates in Dublin decreased.

Rental prices in Dublin did not change.

Therefore, RA rates have no impact on rental prices.


Please correct me if I am wrong or, at least, back up your statement.

StillWaters

Zamboni wrote: »

Just because you keep saying it, does not make it true.
Your "logic"...
Rent allowance rates in Dublin decreased.
Rental prices in Dublin did not change.
Therefore, RA rates have no impact on rental prices.
Please correct me if I am wrong or, at least, back up your statement.

But he is right, RA in Dublin decreased, but rents increased ergo, despite all previous perceived wisdom, RA does not prop up the Market, at least where supply is tight.

Anynama141

StillWaters wrote: »

But he is right, RA in Dublin decreased, but rents increased ergo, despite all previous perceived wisdom, RA does not prop up the Market, at least where supply is tight.

Indeed, but only where supply is tight - that stands to reason. But it props up rent across most of the country, hence widespread rent falls since it was cut.

The_Conductor

StillWaters wrote: »

at least where supply is tight.

This is the part of your statement that I've highlighted. We constructed less than 1,200 dwellings in the greater Dublin area last year (out of just over 8,000 nationally). Supply is the big issue in the Dublin area now. The reciprocal is not the case nationwide- most of the country is awash in excess residential property.

Its no longer a truism that there is an Irish property market- there are several small almost unrelated markets out there- all behaving rationally, but in different manners.

It looks likely that some of the abondoned developments- such as Beacon in Sandyford etc- will be fast tracked at long last- the CIF had an interesting statement on it yesterday and Tom Parlon has been doing the interview rounds again.

Its past sabre rattling time- looks like we're in for some construction in Dublin at long last.

gaius c

smccarrick wrote: »

This is the part of your statement that I've highlighted. We constructed less than 1,200 dwellings in the greater Dublin area last year (out of just over 8,000 nationally). Supply is the big issue in the Dublin area now. The reciprocal is not the case nationwide- most of the country is awash in excess residential property.

Its no longer a truism that there is an Irish property market- there are several small almost unrelated markets out there- all behaving rationally, but in different manners.

It looks likely that some of the abondoned developments- such as Beacon in Sandyford etc- will be fast tracked at long last- the CIF had an interesting statement on it yesterday and Tom Parlon has been doing the interview rounds again.

Its past sabre rattling time- looks like we're in for some construction in Dublin at long last.

Yes and no, if the price of the commuter belt drops, that will tempt people out of Dublin again. Right now, there's a rush to Dublin because it makes no economic sense to live outside but if that were to change, buying habits would probably change too.

theUbiq

The real question is why are rents so high and properties so ****.

Well, I can answer this question for you.. because Ireland is full of greedy cnuts.

The_Conductor

theUbiq wrote: »

The real question is why are rents so high and properties so ****.

Well, I can answer this question for you.. because Ireland is full of greedy cnuts.

Please read the forum charter if you intend to continue contributing to this forum.

Regards,

SMcCarrick

RATM

smccarrick wrote: »

Its past sabre rattling time- looks like we're in for some construction in Dublin at long last.

In fairness NAMA have been quietly going about finishing off sites they where they believe doing so will get a better return for the taxpayer. There is activity going on in some areas and I think their overall budget for these projects is c.€1.6bn

gaius c wrote: »

Yes and no, if the price of the commuter belt drops, that will tempt people out of Dublin again. Right now, there's a rush to Dublin because it makes no economic sense to live outside but if that were to change, buying habits would probably change too.

True, a lot of people selling houses in the commuter belt towns are still priced much too high. Price of petrol comes into the equation too, it has been dropping from historic highs so it could yet make commuting more attractive to some people.

thomas.frink

Pawwed Rig wrote: »

I am assuming you are single with no children and are entitled to €390 if you choose to live on your own or €230 if you choose to share.

.

What a great country you seem to live in. No wonder people are flocking from eastern europe to Ireland.

Pawwed Rig

thomas.frink wrote: »

What a great country you seem to live in.

It has it's good and bad points but generally it is a fairly nice place to live

thomas.frink wrote: »

No wonder people are flocking from eastern europe to Ireland.

Flocking would be a slight exaggeration but when there was lots of work available we got a fair few alright. Unfortunately many had to leave due to the collapse in the building boom etc. Not so many coming these days

thomas.frink

Pawwed Rig wrote: »

It has it's good and bad points but generally it is a fairly nice place to live

I was talking about a country where everyone can, apparently, get hundreds of euro from a bankrupt government to subsidise their accommodation. Thats marvellous.

riclad

The new rules have reduced the no of flats avaidable for single people at the lower price range,
There,s more demand in dublin, pushing rents up.
Maybe the government is stupid,
the reduce ra, thinking rents will go down.
OR they are just reducing all welfare payments across the board.
YEAh nama ,are finishing off apartment s,
doesn,t help a single person on rent allowance.
People on ra ,will get a flat stay there for years ,
as long as they can.

eg under the new tenancy rules,
bedsits are illlegal ,
Each tenant will need a separate bathroom.

NAMA is not really doing anything to help people on rent allowance
,apart from maybe providing more apartments which will provide more
rental units ,for working people.
Rent allowance is different in each area, city ,and county of ireland.

rents vary widely outside the citys .

There was a woman ,on rte radio,
says most of my employees are non nationals,cleaners.
work for me for 2 years.
then go on welfare .


.

thomas.frink

riclad wrote: »

NAMA is not really doing anything to help people on rent allowance
,apart from maybe providing more apartments which will provide more
rental units ,for working people.
.

I wonder have the people on rent allowance ever thought of doing something to help themsleves?

It seems extraordinary that a country which is bankrupt should be content to take money off one group of people, and then pay what seem like quite generous amounts to others, to pay their rent. Is there a time limit on which rent allowance can be claimed, or is it more or less a permanent situation?

djimi

thomas.frink wrote: »

I wonder have the people on rent allowance ever thought of doing something to help themsleves?

It seems extraordinary that a country which is bankrupt should be content to take money off one group of people, and then pay what seem like quite generous amounts to others, to pay their rent. Is there a time limit on which rent allowance can be claimed, or is it more or less a permanent situation?

The country is not exactly awash with plentiful jobs at the moment. The alternative is to stop RA and see thousands of people live on the streets.

Pawwed Rig

thomas.frink wrote: »

It seems extraordinary that a country which is bankrupt should be content to take money off one group of people, and then pay what seem like quite generous amounts to others, to pay their rent. Is there a time limit on which rent allowance can be claimed, or is it more or less a permanent situation?

It is one of the areas identified by the government for cost saving measures hence the cuts to the payments recently. There has also been significant cuts to the subsistence payments in the last couple of years. Some would argue that they are still too high whereas others claim that they are forcing people to live in poverty. It should be noted that not everyone qualifies for rent allowance. I wasn't working for a year at one stage and I didn't get anything for example. There is a State Benefits forum on boards that will most likely give better information on general payments than this forum will.
With regard to the payments themselves it makes good economic sense to keep these payments as high as possible during a recession as generally speaking all of this money is spent by the recipient and stimulates the economy. This is also the argument for taxation of higher incomes as this money is often saved so provides no stimulus. It is a balancing act that all governments attempt to deal with, some more successfully than others. It would seem to be moderately successful here as you rarely hear of anyone starving or freezing to death and there are no major protests claiming taxation is too high. But you are correct in that there are arguments for and against.

We are going off topic though

riclad

Theres alot of older, people or people on disability allowance on rent allowance.

riclad

Well the money spent on rent allowance goes to local landlords,
probably spent in the local economy.
WHICH helps landlords pay the mortgage,
which helps banks which are 90 per cent owned by the government.
Some landlords depend on rent allowance clients to pay the mortgage

SO in some way the money is going around in a circle.
Rent allowance mainly depends on your income,
theres no specific time limit.

thomas.frink

riclad wrote: »

Well the money spent on rent allowance goes to local landlords,
probably spent in the local economy.
WHICH helps landlords pay the mortgage,
which helps banks which are 90 per cent owned by the government.
Some landlords depend on rent allowance clients to pay the mortgage

SO in some way the money is going around in a circle.
Rent allowance mainly depends on your income,
theres no specific time limit.

That's absolutely marvellous. Why not double the RA and then, by your logic, double would be spent in the economy "probably" and that would probably have double the benefit. Or maybe we could spend 100 times on Rent allowance, have 100 times "probably" spend on the economy as a way of getting out of recession and back to the good times? Marvellous!

I'm afraid your logic is exactly the same sort of flawed logic which got ireland into the mess in which it currently finds itself, and is the same sort of logic which seems to indicate Ireland will find itself in recession and depression for many years.

thomas.frink

Pawwed Rig wrote: »

This is also the argument for taxation of higher incomes as this money is often saved so provides no stimulus.

You may not have noticed but higher incomes are currently taxed more than other incomes. If you mean they should be taxed even more and more, then you seem not to have learned the lessons of history.

I love your implication that its right and proper to penalise and punish people who save for their own future. Much better they should spend, spend spend now and then look to the state ( ie the rest of us) to provide for them in their future.

Marvellous!

The_Conductor

thomas.frink wrote: »

That's absolutely marvellous. Why not double the RA and then, by your logic, double would be spent in the economy "probably" and that would probably have double the benefit. Or maybe we could spend 100 times on Rent allowance, have 100 times "probably" spend on the economy as a way of getting out of recession and back to the good times? Marvellous!

I'm afraid your logic is exactly the same sort of flawed logic which got ireland into the mess in which it currently finds itself, and is the same sort of logic which seems to indicate Ireland will find itself in recession and depression for many years.

While I'd have phrased it differently- what you're saying is accurate.
There is no indication whatsoever of any multiplier associated with rent-allowance payments to landlords. A significant amount of it most probably is going on mortgage payments- yes, however all this is doing is stopping the banks from being in an even deeper hole than they're in already.

Aside from a few rare local examples- there is very little economic justification for suggesting there is a multiplier effect associated with RA payments- if you want to suggest otherwise- you're going to have back it up with references from sound sources (the ESRI or similar) as what you're suggesting has no basis in fact.

Current proposals are to cut another 440 million from the social welfare budget this September. As the headline rates are still being defended- this means RA and any other expenditure not viewed as core- is going to be open to incredible scrutiny. Its entirely possible that it end up being revised downwards again (along with further revisions to schemes such as the electricity/heating/tv licences etc etc etc).

Time will tell.

We need to cut another 5.1 billion between now and the end of 2014.

The_Conductor

Pawwed Rig wrote: »

This is also the argument for taxation of higher incomes as this money is often saved so provides no stimulus.

Ireland compares pretty normally to our international colleagues- with our tax rates. To increase our higher tax band makes little sense- as it would dis-encourage people from working (why bother when with all deductions you're loosing more than 2 in every 3 Euro you earn).

Where Ireland differs from other countries- is our higher band kicks in at an incredibly low level. Aka- a valid argument could be made for a heightening of the threshold before you hit the higher tax band- putting an increased amount of most worker's income into the lower tax band.

This would be very helpful- for the average family in the country- and encourage people to seek fuller participation in the workforce.

OMD

The_Conductor wrote: »

Ireland compares pretty normally to our international colleagues- with our tax rates. To increase our higher tax band makes little sense- as it would dis-encourage people from working (why bother when with all deductions you're loosing more than 2 in every 3 Euro you earn).

Where Ireland differs from other countries- is our higher band kicks in at an incredibly low level. Aka- a valid argument could be made for a heightening of the threshold before you hit the higher tax band- putting an increased amount of most worker's income into the lower tax band.

This would be very helpful- for the average family in the country- and encourage people to seek fuller participation in the workforce.

This is not true. Our top rate of tax is higher than most EU countries when you include social insurance and USC.
http://en.m.wikipedia.org/wiki/Tax_rates_of_Europe

Media999

Pawwed Rig wrote: »

Unfortunately many had to leave due to the collapse in the building boom etc.

Yeah thats so unfortunate alright.

The_Conductor

OMD wrote: »

This is not true. Our top rate of tax is higher than most EU countries when you include social insurance and USC.
http://en.m.wikipedia.org/wiki/Tax_rates_of_Europe

Only when you include PRSI, USC etc- these are still being called 'temporary measures' (yes, its bull, but its what they're saying). Our headline rates of tax are what I was talking about- and the fact that our higher band kicks in at such a low income level- which is totally off the wall compared to other EU countries (e.g. in Germany you have to earn about 110k before you hit the higher band etc)

The_Conductor

OMD wrote: »

This is not true. Our top rate of tax is higher than most EU countries when you include social insurance and USC.
http://en.m.wikipedia.org/wiki/Tax_rates_of_Europe

We're significantly lower than Scandinavian countries, and also some of the other bailout countries (such as Portugal and Spain- though Greece and Malta still have comparatively low rates- and high avoidance/evasion). Its only really significantly higher than most of the former Eastern Bloc countries.

Also- the table makes no mention of USC shooting up to 10% for all income over 100k- aka our higher earners are hit even more than is suggested by the table- and by my reckoning the other figures are also out of date- most of them (including our own lower band figures) are higher.