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Increase rent allowance Vs. Rent Control

Gannicus

PLEASE NOTE THAT THIS IS NOT ANOTHER WELFARE BASHING THREAD AND CAN WE PLEASE KEEP IT FROM GOING THAT WAY.

Mods if you could help keep it from becoming as such.

I've seen story after story of people living in their cars, the homeless day centre in bray is inundated with people needing assistance. It was mainly helping people in the bray area but now people are coming from all over and fair play to them for doing all they can to help anyone who needs it. Rents are going up like during booms times because of the housing crisis we currently face. People on social welfare capped at how much they can get from the social the working people are capped by their income and in a lot of cases do not qualify for any rental assistance. Rental increases are crucifying people across the board.

I was chatting with a friend of mine, he was say saying that the people on rent allowance are purely not getting enough help and if the bands are broadened and payments increased it would help a lot. My opinion there is that it will only help one section of society(landlords not included). I also feel that rent allowance helped to artificially inflate rental costs during the boom and would only help to do so again this time it could be worse.

For me I think rent control is a far more equitable way of covering people from different backgrounds, I feel it gives those classed as "the working poor", the rent allowance recipients, the lower middle class, and 3rd level students an equally fair chance of maintaining a roof above their heads.

So what say ye AH which side of the fence do you fall on in this debate.

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Comments

Firedance

Nino Brown wrote: »

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

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.

just out of interest how do you view paying more for rent as financial freedom? I'd genuinely like to see things from your viewpoint. I know that with mortgage payments interest rates go up and down but is rent not far more volatile?, if you find an area you like to live in is it possible you'd be priced out of it at some stage and have to move? If you have children would that mean up rooting them every few years so you can go where you can afford? I totally understand that if you're not tied down by a mortgage you can up and emigrate when an opportunity presents itself but I wonder if its a viable long term solution even for you? (perhaps it is!)

[Deleted User]

Nino Brown wrote: »

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

I actually cant think of a single friend of mine (from Ireland) who didn't grow up in the same place as they were born and they (still living at home) or their parents don't still live there. A good few would be from farms but plenty wouldn't be either.

Nino Brown wrote: »

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.

Well yes argument was the wrong word, different outlook on life I suppose would be a better way to put it. For me moving around is not something I want to do, getting a job in my home area and buying/building and settling there for good would be the outlook I look forward to.

Daith

TBh with renting I would like to see more long term leases. I had to move out of an apt a while back because the landlord wanted it for his son for college. I could have easily lived there for five or ten years.

[Deleted User]

Graces7 wrote: »

[/B]

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

Irregular expenses like this are easily cancelled by paying less every month in a mortgage compared to renting. You also get to buy the washing machine, dryer, cooker, fridge you want not the the cheapest one the LL picks out.

Graces7 wrote: »

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

House insurance will cover major things like this.

Graces7

Gianluca Victorious Ritual wrote: »

Irregular expenses like this are easily cancelled by paying less every month in a mortgage compared to renting. You also get to buy the washing machine, dryer, cooker, fridge you want not the the cheapest one the LL picks out.

House insurance will cover major things like this.

Not convinced at all; far less hassle my way..given the unreliability of Irish workmen too,, houses need painting etc and insurance costs and I have no living family anyways.

I see no point in mortgages and I have done it both ways in my life... so my choice works for me.

Of course as a pensioner I see things very differently but you make sweeping statement that take no heed of any situation like mine.

Renting makes far more sense to me especially with RA

Graces7

Daith wrote: »

TBh with renting I would like to see more long term leases. I had to move out of an apt a while back because the landlord wanted it for his son for college. I could have easily lived there for five or ten years.

Maddening isnt it! I have had several such moves and this time asked what plans the landlord has for this house. His kids are under 7 so I feel pretty secure this time..No other family members are likely to turn up either...

Nino Brown

Gianluca Victorious Ritual wrote: »

Well yes argument was the wrong word, different outlook on life I suppose would be a better way to put it. For me moving around is not something I want to do, getting a job in my home area and buying/building and settling there for good would be the outlook I look forward to.

Whereas I put a lot of time in effort into getting out of the area I grew up in and I will never move back. Different strokes for different folks.

Nino Brown

Firedance wrote: »

just out of interest how do you view paying more for rent as financial freedom?

Because the landlord holds all the risk. If I'm renting and the rent is greater then the mortgage, then good for the landlord, he makes a profit.
But there have been times when my rent was less than the mortgage, and that's still the case in many rental properties in Ireland.
Either way I pay exactly what I am willing to pay, but the landlord could be close to bankruptcy depending on the market.

Firedance wrote: »

I know that with mortgage payments interest rates go up and down but is rent not far more volatile?

Not where I've been renting, rents have been very stable for a long time now, but even if they increase, the rate will be locked in for a year, and I'm under no obligation to pay the increase, although I would because I can right now.
Mortgages will become volatile soon when interest rates go back to normal.

Firedance wrote: »

if you find an area you like to live in is it possible you'd be priced out of it at some stage and have to move? If you have children would that mean up rooting them every few years so you can go where you can afford? I totally understand that if you're not tied down by a mortgage you can up and emigrate when an opportunity presents itself but I wonder if its a viable long term solution even for you? (perhaps it is!)

Can't see why I'd have to leave the area, I could move within the area, or buy if I felt like that was the right thing to do. I've been renting and saving for a long time, I could buy if I wanted to, so if I felt like it was the right thing to do I'd pull the trigger and buy, and pay less in interest now that I would have if I bought years ago.

I will eventually buy, but when I feel the time is right, not because I feel pressure to own a home.

end of the road

Dayum wrote: »

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.

yeah. i'm sure it will

MarkAnthony

Graces7 wrote: »

Renting makes far more sense to me especially with RA

With the greatest respect to you, this is the issue. There shouldn't be an option to be on RA. The only options should be complete freedom in the private sector or limited freedom within social housing. Such as the requirement to move if the property you occupy is no longer suitable to your needs. e.g. a three bed semi in Dublin 4.

I'm not suggesting you're doing anything wrong, clearly the only option for some is RA because of a lack for planning in relation to social housing just pointing out that RA is distorting the market and seems, to my uneducated eyes, to be a massive waste of public resources given the alternatives. It also seems to be a bloody nightmare for people on it in getting accommodation.

Saipanne

Where is "none of the above"?

Anyway, lefties are fond of crtl+v type arguments, soooo...

THE MINISTER OF State for Housing, Labour’s Jan O’Sullivan, has called for rent price controls linked to the consumer price index (CPI) during a recent interview with the Irish Examiner. Average rents have come up by almost five per cent year on year, as of Q3 data, and in Dublin they’ve come up by 7.6 per cent.
This is, naturally, worrying for renters. What ought to be worrying to renters and buyers alike is that the Minister with responsibility for looking after this area might come out with such an ill-conceived and stupid policy proposal to fix the problem.
There are three fairly simple reasons why rent controls, and in particular those linked to the CPI, are a terrible idea.

CPI-linked rents would have been higher

Firstly, had Jan O’Sullivan or any of her highly paid advisors bothered to check the Central Statistics Office data they would have noted that had rents been linked to the CPI in the past, they would presently be 20 per cent higher than they are. As the UCC economist Seamus Coffey points out on his excellent blog, rents are now indexed at about 2003 levels while the CPI is substantially higher.
During the crash rents came down by a quarter, while the CPI came down by less than 8 per cent over the same period. If we followed Jan O’Sullivan’s proscription for rent controls, renters would have been substantially worse off both during the crash and now during our relative return to growth.
Indeed, at no point since the CSO was tracking the relevant data in 2003 would rents have been anything but higher were they linked to the CPI.

‘Poor planning by governments lacking courage and vision’

A second good reason to dismiss the idea, regardless of what random features of national life rents are tied to (electoral cycles, perhaps?), is neatly summed up by the left wing Swedish economist Assar Lindbeck. “Next to bombing, rent control seems in many cases to be the most efficient technique so far known for destroying cities.” So says a man who, if he were Irish, would be in the Socialist rather than the Labour Party.
His fellow Swede and left wing economist Gunnar Myrdal, winner of the 1974 Nobel Prize in economics and government minister in the Social Democratic Party that today sits in the same Party of European Socialists as our own Labour Party in the EU, was similarly scathing. “Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision.”
One of our key challenges at the moment is a lack of supply in the cities, which is driving up rents at the accelerated rates versus the rest of the country. For all that we’ve had a massive property related crash and there are still ghost estates littering the land, we are overdue a construction spree in certain places.

Rent control strangles investment

The trouble with rent control is that it strangles investment into property, leading to Lindbeck’s famous quip to his students about it being second only to bombing in its effectiveness at destroying cities. Industries that suffer government price controls are a bad place to invest your money versus those with no control; so instead of putting cash into new construction, or even the upkeep of existing buildings, investors go somewhere the return involves less red tape and meddling.
A study by Paul Niebanck in the US found that 29 per cent of rent-controlled housing in the country was in a deteriorated state, versus 8 per cent of the uncontrolled market. Joel Brenner and Herbert Franklin cited similar statistics for England and France.
“Ah,” say the rent controllers in the room, “but we’ll just enforce better standards!” You can, of course, do this; and there’s evidence that we should do so anyway given the state of some kips up for rent in the country. But you can’t force people to invest in rental property in the first place, and as private sector supply dries up in an ever more regulated and controlled market it will fall to the State to step in with more investment in building – you know, the State with a debt-to-GDP ratio north of 130 per cent, which borrows a billion a month to keep the lights on as is. Good luck.

Ruled as unconstitutional

The third and particularly Irish reason why rent controls are a bad idea is because the Supreme Court ruled our last set of rent control laws unconstitutional. Now, that’s not to say that any future law would infringe on constitutional property rights; but it does show that we could waste a lot of time and effort dousing ourselves in petrol before the courts tell us we’re not allowed strike the match.
There are many issues around rented housing in Ireland at the moment. Supply and demand are mismatched; accommodation standards aren’t being universally upheld; and all of this is exacerbated by high unemployment, banking and negative equity issues among others.
Proposing a simplistic solution to arbitrarily try solve one facet of the problem is not good policymaking by Jan O’Sullivan or the government at large. Perhaps overwhelmed by the scale of our troubles, the political instinct is to look for a panacea. If there is one, this surely isn’t it: driving investment out of rented property at a time when there’s a supply shortage seems a poor policy choice.

An interconnected economy

We live in an interconnected economy. The lack of lending by our zombie banks is holding back the ability of the private sector to invest and provide more supply, which would alleviate price increases. Our ever-efficient planning process will have to kick into gear to approve projects quickly when they are on the drawing boards; though of course we should learn our lessons from the past and make sure that new developments come with proper infrastructure from the day the first families move in.
Investment requires confidence that the market will remain stable. Just as the Government and the IDA so successfully tell foreign investors that the regulatory and tax environment they’re coming to is solid as a rock, Jan O’Sullivan and the government might reassure potential investors that half-baked policy ideas aren’t going anywhere or likely to broadside them in future.

endacl

I'm looking for a bigger gaff, lads. The plan is to quit work and phone in to radio stations.

My question is: I drive a focus saloon. I'm 6'4". Should I trade in for an estate first? For comfort, like. I hear you get a better gaff if you kip in your car for a while. I could throw an aul' mattress in the back of an estate. Also, should I wait till the summer? It's a bit chilly at night for sleeping on the car. And the noodles and milk. Which goes on the dashboard, and which goes under the car?

Oh. Nearly forgot. If I park in the driveway of me current gaff, can I use the shower and jacks? And the telly? Or would that be considered 'cheating'.

Very hard to find info on this stuff...

Graces7

MarkAnthony wrote: »

With the greatest respect to you, this is the issue. There shouldn't be an option to be on RA. The only options should be complete freedom in the private sector or limited freedom within social housing. Such as the requirement to move if the property you occupy is no longer suitable to your needs. e.g. a three bed semi in Dublin 4.

I'm not suggesting you're doing anything wrong, clearly the only option for some is RA because of a lack for planning in relation to social housing just pointing out that RA is distorting the market and seems, to my uneducated eyes, to be a massive waste of public resources given the alternatives. It also seems to be a bloody nightmare for people on it in getting accommodation.[/QUOTE]

All RA is is help with paying rent for those on welfare and those on ,low incomes and we pay the same as if in social housing. Else they would need to raise welfare in other areas... so your arguments are totally inappropriate. Costs lless to pay RA than social housing as maintenance etc are the landlords job not the councils.
You are making it all out to be far worse than it is. Not sure what you mean by the first line of your last para!!!
How is helping folk live in a house a massive waste. You want us back in the
workhouse? Or an old folks home! Gee! Over my dead body!

Keeping people alive and accommodated on welfare costs. Get over it please... I am very happy in my old remote farmhouse thank you!

Monife

Graces7 wrote: »

All RA is is help with paying rent for those on welfare and those on ,low incomes and we pay the same as if in social housing. Else they would need to raise welfare in other areas... so your arguments are totally inappropriate. Costs lless to pay RA than social housing as maintenance etc are the landlords job not the councils.
You are making it all out to be far worse than it is. Not sure what you mean by the first line of your last para!!!
How is helping folk live in a house a massive waste. You want us back in the
workhouse? Or an old folks home! Gee! Over my dead body!

Keeping people alive and accommodated on welfare costs. Get over it please... I am very happy in my old remote farmhouse thank you!

I doubt very much that it costs less for councils to pay RA than to maintain social housing in the long term. If the council is part of the developing process when building social housing, the only cost to them is labour and materials. As far as I am aware, tenants pay for their own furniture and upkeep, the only maintenance the council would have to do is painting every now and again or if there was a structural issue. At the end of the day, the council has an asset with social housing where as it is basically setting money on fire with RA.

Jamsiek

Nino Brown wrote: »

I like the financial and geographical freedom renting provides.

Yes I am the same as this.

I'm the kind of person that doesn't want to feel stuck in one place if I decide to move.
That's why I would be reluctant to buy unless I was sure that's where I wanted to stay forever and this has never happened in my experience

anncoates

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.

A bit off topic but unless the developer is still in situ, management companies are run by owner residents with elected owner resident directors although most will delegate the day-to-day running of the estate to a managing agent.