€78m increase in HAP funding despite lack of rentals within HAP limits

By Eoin Ryan

The Housing Assistance Payment (HAP) is the only assistance available for renters, but max payment is €300 below the average rent in Meath, almost €900 for single adults.

Despite getting half a billion in funds last year, only 5.5% of housing is within HAP limits.

“This year will see the amount of money spent by the Department of Housing on subsidising private landlords eclipse €1 billion, representing nearly a third of all government spending on housing., said Imelda Munster, a Sinn Fein TD, in a Department of Housing meeting early this month,” Munster says. “This money could be far better used building social housing and actually affordable homes.”

Both housing and rent prices increased greatly across Ireland with Meath being no exception. The average rent costs €1400 in the county, a dramatic increase from €800 in 2015. Housing prices have also increased, an average of €200,000 in 2015 to €280,000 today. The growth slowed in 2020, though housing and rent prices are expected to surge later this year. Dubliners migrating into Meath East adds to increasing rent prices in the local area on top of national increases.

HAP has been an ineffective short-term solution to the housing crisis and is still getting an extra 78 mil this year. It has helped many make a living with the majority of tenants under the scheme increasing the tenant’s annual income within the first year. What this does not consider is the lack of available housing for others attempting to use the scheme and the increasing cost it has on government funds compared to social housing.

The housing budget is at an all-time high this year at €3 billion, but this is still not enough to meet the needs of those looking for social housing in Meath. This further increases the demand for cheap housing in Meath.

The government should increase the housing budget to 4bn according to an ESRI report, citing a demand for housing being approximately 35,000 a year which could grow to 45,000 units a year. It warned that the country faces “another decade of inadequate housing supply” as the government can’t meet the housing demands in Ireland, Meath being no exception.  It will take a long time for housing supply to meet rising demand. Cabinet has recently approved a proposal to increase the current requirement of social housing in new developments to 20% and Varadkar has set a target of 40,000 houses a year, still short of the one set by ESRI.

HAP is partially worsening this situation, taking from the housing budget despite social housing being a greater alternative in the long term. Banks currently do not see rent payments as a viable way of showing that residents can pay off mortgage payments despite some rents being higher. Encouraging tenants to rent using HAP until they have sustainable income is not useful for those wishing to buy a house later on.

This assistance, initially began in an attempt to stem the rising homeless population, has had no effect on this. Beginning in 2016, 4,643 were sleeping rough growing to 6309 to 2019, dropping in 2020 due to restriction rules preventing evictions.

The HAP scheme is a proven failure, yet the government still increases funding for it due to statistics that do not show the bigger picture. As more of the housing budget goes to HAP, less is spent on social housing that gives tenants a long-term place to live in. Meath is already coping with surging rent and housing prices, and HAP is only making the situation worse for tenants and first-time home buyers alike.

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