Dáil Éireann Debate, Tuesday - 25 July 2023
662. Deputy Ivana Bacik asked the Minister for Housing, Local Government and Heritage if his attention has been drawn to a report (details supplied); his views on same, specifically in relation to housing costs for renters; and if he will make a statement on the matter. [37081/23]
View answerMy Department welcomes the ESRI's publication of the 'Housing Affordability: Ireland in a Cross-Country Context' research paper, which provides important context on affordability in the Irish housing market relative to our European peers.
This research identifies that, at an overall level, when households that do not face any housing costs (e.g. outright homeowners) are excluded, Ireland has the 6th lowest housing cost to income ratio of the 15 peer countries.
Another important finding is that, when the available housing supports to renting households are considered, Ireland had the most favourable average rent-to-income levels among the 15 countries analysed (an average of 20.7% for Ireland relative to an average of 25.1% in the 15 peer countries), with middle and lower-income households (i.e. up to 60% of households by income distribution) facing substantially lower proportionate rental costs than similar cohorts in the peer countries. More specifically, households in the lowest income quintile in Ireland face an average Rent To Income ratio (RTI) 10 percentage points lower than their European peers, while RTIs for those in the second and third income quintiles have RTI's that are 1 percentage point lower.
The ESRI further identify that, in the absence of the available housing supports (i.e. the Housing Assistance Payment (HAP), Rental Assistance Support (RAS) and Rent Supplement (RS)), supported households would pay an average of 43% of household income on rent, significantly higher than the 15% average RTI level when such supports are reflected.
Within this context, this report by the ESRI identifies several affordability challenges for upper-income and urban-based renters, who on average pay higher proportions of income on rent than the European peers.
The Housing for All strategy sets a target to deliver 54,000 Affordable and Cost Rental Homes in the period to 2030. This will see an average of 6,000 affordable homes per annum – consisting of 4,000 Affordable Purchase and 2,000 Cost Rental homes. We are 21 months into this strategy and have seen welcome increases in housing completions and commencements, as well as the first delivery of cost rental homes.
The Government acknowledges that there are problems in the rental market, with too many households facing immense challenges in accessing affordable and secure housing. I recently announced the intention to raise income eligibility thresholds for cost rental housing to a maximum of €66,000 net in Dublin and €59,000 in the rest of the country. The increases, which will come into effect from the 1 August 2023, recognise the severe affordability challenges in the private rental sector. Together with other supply initiatives, such as the new STAR scheme and the Review of the Private Rental Sector, Government is committed to improving affordability for private renters.
