Increase rent allowance Vs. Rent Control

hfallada

You wouldnt find a single economist in the world who thinks rent controls are beneficial in the long term. Economist use facts on hand and they are not trying to push an agenda like a politician. If rent controls work more countries would use them, but they dont. They stop landlords spending money on their property(why would they if they dont get more rent), it reduces supply as its not as profitable, which actually worsens the property shortage.

Think about it.If you tell someone all they can charge for an item is X amount, they are going to supply if then if the market sets the price. But in the long run, the market sets the price at the efficient point. Where demand equals supply. NYC no longer has rent control. San Francisco has it and its a disaster.

If apartment blocks were 15 storeys instead of 5 storeys at the moment in Dublin. We would have 3 times the amount of apartments in the city. But DCC keeps listening to a few nut jobs which think its better for Dublin to have a low skyline and no housing for its citizens.

Daith

hfallada wrote: »

If apartment blocks were 15 storeys instead of 5 storeys at the moment in Dublin. We would have 3 times the amount of apartments in the city. But DCC keeps listening to a few nut jobs which think its better for Dublin to have a low skyline and no housing for its citizens.

Plus we've got plenty of office space but nowhere to house people who want to work here!

hfallada

Daith wrote: »

Plus we've got plenty of office space but nowhere to house people who want to work here!

No we actually have a shortage of high grade modern office space. The multinationals are warning the Government that the rent of office space is getting too high(lack of supply). Plus their is a shortage as no new office blocks have been built in 8 years.

jank

Why is the default option in Ireland to fix any problem is for the state to step and attempt to control or plan the market? They have already done enough damage in this regard yet people want more and more state interference.

The option should be neither.
Upping rent allowance will only push up prices. Rent control will curtail private investment thus limiting supply further.

Mods can we add a neither option?

BoJack Horseman

And add to all that the fact that less than 10kms from the Spire is farmland.

The issue is so very fixable without the state having to get all nanny-ish about it.

MarkAnthony

The problem with rents in Dublin is a simple one. You're simply paying someone else's mortgage. Rent controls can't be brought in because of the Constitutional protection on private property, but even if they could they would be unsustainable as the majority of rental properties are mortgaged. As interest rates raise so will rents.

What needs to be addressed is all the amateur landlords that got into the game because it looked like a good investment. I'm madness that 75% of mortgage interest for Landlords is paid by the taxpayer and they have an asset being paid for by someone else. Crazy where you have constricted supply and a culture of owning your own home.

Renting is dead money, plain and simple. You can do any calculation you want but none of them work out in the long run, especially at retirement when you need a drastic reduction of out goings. Renting should be confined to three groups;

(i) transient workers of every income bracket getting private, professional landlords
(ii) social housing
(iii) people saving for a deposit making do with a small property and small rent.

The rest of the time people should be able to afford to purchase their own home on the industrial average wage. This might not be the 3/4 bed-simi D and I agree we need to get out of that mentality here, but a decent well maintained apartment should be within the reach of most.

On social housing that's exactly what it should be. Rent allowance should be scrapped, it's madness to be paying private landlords. It needs to be spread around and not concentrated into estates but it does need to be moved out of central Dublin. Where no-one in the household works it needs to be moved even further afield, so that there is supply in Dublin for people working in Dublin.

There should never, ever, ever, be the option to buy social housing and it should be a % of your income meaning that eventually it doesn't pay to be in social housing and you move into the private sphere.

Anyway, that's my 2 cents.

anncoates

Rent control and regulation of the rental market is obviously required for tenants as we don't really have a professional landlord culture here, rather people that (often forced to) rent out property therefore the rental market is open to abuse and linked too closely t the swings of the property market.

That said, landlords need to be afforded protection also. No more scenarios where some dirtbird can destroy your property or withhold rent and drag you through red tape for months and months, enjoying free rent.

Kintarō Hattori

Honest question but why are some people so pro-renting and against owning your own property?

Assuming you don't rush out to buy the first thing you see and that you take time to properly save a deposit and not over stretch yourself.... .why wouldn't you want to buy an apartment/house?
Hopefully by the time I come to retire my home will be paid off and I don't have the worry of having to pay each months rent. When you're retired and renting that has to be a worry.

Nino Brown

Kintarō Hattori wrote: »

Honest question but why are some people so pro-renting and against owning your own property?

Assuming you don't rush out to buy the first thing you see and that you take time to properly save a deposit and not over stretch yourself.... .why wouldn't you want to buy an apartment/house?
Hopefully by the time I come to retire my home will be paid off and I don't have the worry of having to pay each months rent. When you're retired and renting that has to be a worry.

If you borrow 300K, over 30 years you will basically be paying 600K for an apartment. That's an asset which is not guaranteed to increase in value. There are thousands of people in this country paying 600K for an asset now worth 150K. Buying is not always the right thing to do.
Monetary policy right now is basically experimental, there has never been a time in history when this much money has been printed worldwide, but history tells us that massive money printing doesn't end well.
So I would rather wait it out, and make the single biggest investment of my life at a time when I think it is the right thing do financially. And in the mean time maintain the ability to move where I can afford. If lose my job, I can move somewhere I can afford, if I decide to leave the country, I can just go. But you are right, it is best to have a property fully owned for retirement, so I will continue to save, and as I do, I will make a bigger and bigger hole in the interest I will have to pay when I do buy. And even if I don't buy, I'll easily have enough saved to pay cash for a good sized house down the country by retirement.

Dayum

Increasing rent allowance and rent controls are a one way ticket to total disaster.

The government are the problem here. Far too much regulations. Not enough supply. Build massive skyscrapers and let the rent fall through the floor.

Daith

hfallada wrote: »

No we actually have a shortage of high grade modern office space. The multinationals are warning the Government that the rent of office space is getting too high(lack of supply). Plus their is a shortage as no new office blocks have been built in 8 years.

Ah ok. I do remember reading about the Docklands recently and how it's being revamped for more office spaces.

I do wonder if the multinationals just view the IFSC/Grand Canal as the only place they want to rent though.

Monife

The people sleeping in their cars (whose rent allowance and social welfare no longer covers their rent) clearly have no concept of surviving on their own. There are cheap enough hostels in Dublin (tenner a night) which provide free (make your own) standard breakfasts. These people were obviously getting the dole, so that leaves them approx. €110 for the rest of their weekly food/necessities.

Rent allowance should never be increased. It is too high and should be reduced gradually. Rent controls, seem like a good idea for tenants but I would agree with others that it would hamper supply as landlords aren't going to want to get in the game if there isn't money to be made.

Supply is definitely our problem, but the government doesn't seem too pushed on helping contractors/developers etc to fix this problem, which would benefit the whole of society!

allibastor

MarkAnthony wrote: »

The problem with rents in Dublin is a simple one. You're simply paying someone else's mortgage. Rent controls can't be brought in because of the Constitutional protection on private property, but even if they could they would be unsustainable as the majority of rental properties are mortgaged. As interest rates raise so will rents.

What needs to be addressed is all the amateur landlords that got into the game because it looked like a good investment. I'm madness that 75% of mortgage interest for Landlords is paid by the taxpayer and they have an asset being paid for by someone else. Crazy where you have constricted supply and a culture of owning your own home.

Renting is dead money, plain and simple. You can do any calculation you want but none of them work out in the long run, especially at retirement when you need a drastic reduction of out goings. Renting should be confined to three groups;

(i) transient workers of every income bracket getting private, professional landlords
(ii) social housing
(iii) people saving for a deposit making do with a small property and small rent.

The rest of the time people should be able to afford to purchase their own home on the industrial average wage. This might not be the 3/4 bed-simi D and I agree we need to get out of that mentality here, but a decent well maintained apartment should be within the reach of most.

On social housing that's exactly what it should be. Rent allowance should be scrapped, it's madness to be paying private landlords. It needs to be spread around and not concentrated into estates but it does need to be moved out of central Dublin. Where no-one in the household works it needs to be moved even further afield, so that there is supply in Dublin for people working in Dublin.

There should never, ever, ever, be the option to buy social housing and it should be a % of your income meaning that eventually it doesn't pay to be in social housing and you move into the private sphere.

Anyway, that's my 2 cents.

You are actually spot on. I would agree that social housing in major urban areas such as Dublin, Cork and Limerick etc should be kept for people who are working, but the problem then becomes who in there right mind will tell a load of inner city people to move out.

If we could start again with a new city, completely new like and do a plan around it, it would work out better. Things like the google ghetto in Dublin where you had ****ty apartments being done up and then rented at massive fees is all that happens when a big company or workforce move to an area.

hfallada

Like all the Government minister talk only about building more houses. How far does Dublin have to go into the countryside before they realise we need to start getting people to move into apartments like most countries in Europe and even most north American Cities. There is some belief that Irish wont live in Apartments. But yet we emigrated to the US and happily lived in Apartments in Manhattan/Brooklyn, because thats what the Americans did

If there were 30-50 Storey apartment blocks in Dublin on a US standard. Which is big windows, open plan, large bedrooms, often a swimming pool or a gym in the basement. The middle classes would live there, rather a 90 min bus ride each way to a ****ty development. Where there is no services/quality of live. High rise will have to become the norm in Dublin. The city is still rapidly growing and will continue to grow.

MarkAnthony

hfallada wrote: »

Like all the Government minister talk only about building more houses. How far does Dublin have to go into the countryside before they realise we need to start getting people to move into apartments like most countries in Europe and even most north American Cities. There is some belief that Irish wont live in Apartments. But yet we emigrated to the US and happily lived in Apartments in Manhattan/Brooklyn, because thats what the Americans did

If there were 30-50 Storey apartment blocks in Dublin on a US standard. Which is big windows, open plan, large bedrooms, often a swimming pool or a gym in the basement. The middle classes would live there, rather a 90 min bus ride each way to a ****ty development. Where there is no services/quality of live. High rise will have to become the norm in Dublin. The city is still rapidly growing and will continue to grow.

We don't even need that density. I was looking at a house recently off Cork street, walking distance to the city centre. The house is 620Sq foot with a garden that would accommodate 2 more houses the same size.

If there were more developments the size (density wise) of Smithfield in the City, areas in D3 developed in to apartments, the areas around Heuston developed and a few more places here and there we'd have a massive relief in supply. One of the major issues is the **** boxes builders have been allowed to develop over the years.

A few c. 750 - 1000 sqft 2 beds with decent build quality and properly run by the residents and not some cowboy management company (OMC's only have themselves to blame but that's a different thread) and I'd be screaming take my money.

awec

Increasing rent allowance will just increase rents. It won't solve the problem.

The only solution is increased supply.

Daith

MarkAnthony wrote: »

A few c. 750 - 1000 sqft 2 beds with decent build quality and properly run by the residents and not some cowboy management company (OMC's only have themselves to blame but that's a different thread) and I'd be screaming take my money.

Yet that's not what we are hearing from developers. It's too expensive to do this. Not worth their time. They want the ban on bedsits lifted.

MarkAnthony

Daith wrote: »

Yet that's not what we are hearing from developers. It's too expensive to do this. Not worth their time. They want the ban on bedsits lifted.

Which will only result in crappy housing that no-one wants. They need a sea change in relation to how people view apartments. All the current developers want to do is keep building apartments middle class Paddy and Mildred buy to rent out to Tanya and Igor. There needs to be a shift away from wanting a 3/4 bed semi into apartment living in the City Centre. I'm not saying everyone should move in from the 'burbs but the current situation is ridiculous for those of us who want to live close to town.

Iwasfrozen

Daith wrote: »

Yet that's not what we are hearing from developers. It's too expensive to do this. Not worth their time. They want the ban on bedsits lifted.

It is too expensive to do this due to the ban on high rise buildings.

Nino Brown

Nino Brown wrote: »

If you borrow 300K, over 30 years you will basically be paying 600K for an apartment. That's an asset which is not guaranteed to increase in value. There are thousands of people in this country paying 600K for an asset now worth 150K. Buying is not always the right thing to do.

If you rent though you will most likely pay much more over 30 year than you do in a mortgage and have nothing to show for it at the end, this is a massive deal.

You say you rent and save towards buying but with rents higher than mortgages in an awful lot of instances this doesn't make since. For a lot of people they either cant afford to rent and save (so would be better off paying a mortgage than rent) or if they can afford to rent and save they would most likely be better paying the cost of rent and saving into a mortgage thus paying off the mortgage much faster.

I cant see how anyone could be happy renting long term, its a stop gap measure nothing more. Living in someone elses house that will never be yours and your kids will never really be able to call home as there is no guarantee it will still be in the family in 5, 10 or 20 years time.

allibastor

Iwasfrozen wrote: »

It is too expensive to do this due to the ban on high rise buildings.

Its not that expensive, but land value coupled with the amount of red tape to build will in turn mean that a developer will try and squeeze in an extra apartment or two at the expense of giving a decent build, because they will get more money for their effort.
Just in the case of the landlords and rent control, a developer who builds on a spec basis will want as much units as possible for their land value. building high-rise may be the answer, but then again they may just squeeze more in again.

If the issue was to be sorted out properly, a purchase of land should be some-what controlled with tight planning on not just what the building looks like, but the layout of the apartment and the internal facilities should be would mean that if a developer knows he has to spend X amount on land, then has to build the apartment in x way, he may not go ahead with the build at all as they still want a high profit.

Dayum

http://i.telegraph.co.uk/multimedia/archive/01897/singapore_1897281b.jpg


^^This is what Dublin needs......

Problem solved.

Nino Brown

Gianluca Victorious Ritual wrote: »

If you rent though you will most likely pay much more over 30 year than you do in a mortgage and have nothing to show for it at the end, this is a massive deal.

You say you rent and save towards buying but with rents higher than mortgages in an awful lot of instances this doesn't make since. For a lot of people they either cant afford to rent and save (so would be better off paying a mortgage than rent) or if they can afford to rent and save they would most likely be better paying the cost of rent and saving into a mortgage thus paying off the mortgage much faster.

I cant see how anyone could be happy renting long term, its a stop gap measure nothing more. Living in someone elses house that will never be yours and your kids will never really be able to call home as there is no guarantee it will still be in the family in 5, 10 or 20 years time.

They are all the same arguments that were thrown around during the boom, and how did it work out for those people who bought then?
Why does a house have to be in the family in 20yrs time? If I rent a place for 5 years then move, how is that any different to people who buy a house and then move, people move all the time whether they rent or own. Home is where you currently live.
To say renting is more expensive over 30 years, means you know what interest rates and the economy will be like for the next 30 years, I doubt that. I think buying a house now is too risky, and it is more important for my family to have financial security, too many families are struggling to make ends meet now because they followed the same logic you are following.
If people can't rent and save, they definitely shouldn't be buying because it means they'd have no room to maneuver if somebody lost their job or got sick or something. If I lose my job, I can move to where the work is, or move to a cheaper location.
I get where you are coming from, and I would love a place of my own and will eventually buy property, but it is a massive financial decision, which affects you and your family's quality of life for decades, and one which I think should only be made in more certain times. Owning a house is not the be all and end all we are led to believe it is in Ireland.

noodler

Gianluca Victorious Ritual wrote: »

I cant see how anyone could be happy renting long term, its a stop gap measure nothing more. Living in someone elses house that will never be yours and your kids will never really be able to call home as there is no guarantee it will still be in the family in 5, 10 or 20 years time.

And yet, a huge number of Europeans live perfectly fine renting long-term.

Nino Brown

Nino Brown wrote: »

They are all the same arguments that were thrown around during the boom, and how did it work out for those people who bought then?

Not good for the people who bought in a certain limited number of years, those who bought before the boom and during the recession on the other hand work out very well.

Nino Brown wrote: »

To say renting is more expensive over 30 years, means you know what interest rates and the economy will be like for the next 30 years, I doubt that.

Interest rates are still falling and there is no reason to believe they will increasing past very reasonable levels. These issue push rents up also remember. With rates so low now its a great time to buy and try to pay off as much of the mortgage as possible as quickly as possible.

Nino Brown wrote: »

Why does a house have to be in the family in 20yrs time? If I rent a place for 5 years then move, how is that any different to people who buy a house and then move, people move all the time whether they rent or own.

People very rarely tend to move once they establish a family home

Nino Brown wrote: »

Home is where you currently live.

No, home is the house I grew up in and where I go home to regularly not the place I had over rent to stay in.

noodler wrote: »

And yet, a huge number of Europeans live perfectly fine renting long-term.

A point considerably over exaggerated here regularly, there are many European counties with higher home ownership figures than us. We are pretty much average here for ownership there.

As for why people are happy renting long-term I cant answer that as its not a scenario I can relate to at all.

Daith

Gianluca Victorious Ritual wrote: »

I cant see how anyone could be happy renting long term, its a stop gap measure nothing more. Living in someone elses house that will never be yours and your kids will never really be able to call home as there is no guarantee it will still be in the family in 5, 10 or 20 years time.

There's no guarantee that a mortgage will mean the house will still be in the family in years to come either.

Nino Brown

Gianluca Victorious Ritual wrote: »

People very rarely tend to move once they establish a family home
No, home is the house I grew up in and where I go home to regularly not the place I had over rent to stay in.

I don't know how true that is, most of my friends would have moved a few times during childhood, unless they were farmers.

Gianluca Victorious Ritual wrote: »

As for why people are happy renting long-term I cant answer that as its not a scenario I can relate to at all.

It's not really an argument, you would rather own, I would rather rent, neither point of view is necessarily wrong, they're just different lifestyle choices. But there is a choice!

Renting works best for me, I recently moved to the US for a few years, I'm back now, I'll go again if the opportunity arises. I've lived in places which I didn't really like, so I just moved when my lease expired. I like the financial and geographical freedom renting provides.

Littlekittylou

RENT CONTROL RENT CONTROL RENT CONTROL.

If would have wider more beneficial results for many more people and help the economy also it would help keep the housing market in check.

We should have overhauled the whole thing years ago. Long term leases and better tenant rights etc. The govt will never allow it though.

Graces7

Fascinatingand thoughtful thread..

My input is as a disabled solitary pensioner renting and on Rent Allowance.
My pension comes in from the Uk and I am eligible for the welfare additions here.

I owned a very old inherited cottage here; inheritance. Know it needed far more work than I could ever afford in its very poor state so decided to rent.

Am of course at the bottom of the housing ladder and some of the few places that accept RA ( rent allowance) would shock may here.

I do not want a council house or flat; medical problems mean I need a fair amount of isolation. When I have been forced to go on housing lists I have chosen areas where there is little housing stock deliberately.

Financially pensioners here are far better off than in any other country I have seen. I mean basic state pension. We pay E35 a week to the rent, get E35 a month towards electricity, in winter E20 a week solid fuel, travel pass , TV licence, medical card .. When I turned 70 last year they made my smaller UK pension up do Irish levels and I was amazed at the difference.

I have no complaints re provision. Blessed to be able to live independently. Have all I need and a little more.

Wondering now reading all the thread what the alternative is to RA, ie to help with rent for eg pensioners and the chronically sick, especially when they have no living family? When we are still well able to live independently with no outside help.

The current limits for RA mean that landlords cannot raise rents without risking leaving rentals empty. Many refuse RA tenants and maybe that needs sorting and stopping. There are other ways to exclude problem tenants like references and assessing at meetings. The other reason is tax evasion which speaks for itself .

I simply do not see an alternative to the current system and totally agree that raising RA is totally mistaken. Phasing RA out will cause greater problems for more vulnerable folk.

Just one opinion based on living the situation many years.

Graces7

Gianluca Victorious Ritual wrote: »

Not good for the people who bought in a certain limited number of years, those who bought before the boom and during the recession on the other hand work out very well.



Interest rates are still falling and there is no reason to believe they will increasing past very reasonable levels. These issue push rents up also remember. With rates so low now its a great time to buy and try to pay off as much of the mortgage as possible as quickly as possible.



People very rarely tend to move once they establish a family home



No, home is the house I grew up in and where I go home to regularly not the place I had over rent to stay in.




A point considerably over exaggerated here regularly, there are many European counties with higher home ownership figures than us. We are pretty much average here for ownership there.

As for why people are happy renting long-term I cant answer that as its not a scenario I can relate to at all.

For me issues like maintenance, repairs, appliances needing replacing means renting makes economic sense. This is why I left ownership and came into renting

If the washing machine dies, the landlord ha to replace and on disability or a pension that means a great deal

If the roof gets damaged in gales, the same applies.On low incomes and with the high cost of repairs,,,