The Housing Assistance Payment (HAP) is a flexible and immediate housing support that is now available to all eligible households throughout the State. Budget 2018 has increased the Exchequer funding for the HAP scheme by €149m to €301 million in order to meet the continuing costs of existing households and the costs of meeting the additional 17,000 households, targeted under Rebuilding Ireland, to be supported by HAP in 2018. The increased rent limits introduced by the Government last year, together with the additional discretion available to local authorities to exceed the maximum rent limit where necessary, are allowing HAP households to find suitable accommodation and willing landlords. On average in 2017, 350 additional tenancies are being supported by HAP each week, with over 29,800 households currently having their housing needs met under the scheme, and some 20,000 separate landlords and agents currently in receipt of monthly HAP payments.
Each local authority has statutory discretion to agree to a HAP payment up to 20% above the prescribed maximum rent limit in circumstances where it is necessary, because of local rental market conditions, to secure appropriate accommodation for a household that requires it. It is a matter for the local authority to determine if the application of the flexibility is warranted on a case by case basis. However, it is open to local authorities to take a consistent approach in relation to use of discretion in a given locality or in relation to a particular household type. Additional discretion of up to 50% above rent limits is available to assist in housing homeless households in the Dublin Region. The additional discretion available to homeless households recognises the difficulty this cohort of households face in sourcing and securing properties in a highly competitive rental market. Detailed guidance has been provided to local authorities in relation to the approach to be applied when assessing HAP applications. This guidance applies to new and existing households seeking HAP rental supports within local rent limits and in excess of rent limits, and in relation to the management of reported top-ups. The local authority must make a decision on what level of support to provide based on the tenant’s current position and the needs of a household, as well as the market rents in that local area.
From available data, at the end of Q2 2017, 17.8% of the total number of households being supported by HAP were benefiting from the additional flexibility that was provided to local authorities to exceed the maximum rent limits. When the additional discretion available to homeless households in the Dublin Region is removed, 12.6% of households nationally were benefiting from the additional flexibility. In those cases, the average rate of discretionary payment being used was 14.7% above rent limits provided.
My Department is aware that some HAP recipients are making payments directly to their landlords, beyond the amount of HAP being paid on their behalf. There is no legislative provision precluding HAP supported households contributing towards the monthly rent to their landlord. Where a qualified household sources accommodation outside the maximum rent limits, it is important to highlight the responsibility falling on the household to ensure the landlord receives the full amount of rent charged for the property as set out in their tenancy agreement.
The Strategy for the Rental Sector, published in December 2016, recommended the introduction of a Rent Predictability Measure to moderate rent increases in those parts of the country where rents are highest and rising - where households have greatest difficulties in finding accommodation they can afford. The Planning and Development (Housing) and Residential Tenancies Act 2016 provided for the Rent Predictability Measure and for areas, called Rent Pressure Zones (RPZs), where rents can now only rise by a maximum of 4% annually for a period of three years.
This measure was implemented immediately in the four Dublin local authority areas and in Cork City as these areas already met the criteria for a Rent Pressure Zone in December 2016. A further 12 Local Electoral Areas (LEAs) were designated in January 2017, with the measure further extended to Maynooth and Cobh LEAs in March 2017 and to Drogheda and Greystones LEAs in September 2017.
On 19 September 2017, I announced a number of improvements to the rental market as part of the rolling review of Rebuilding Ireland. One such change is that the RTB will be given additional powers and resources to take on a regulatory responsibility in the rental sector over the next two years. The changes needed in legislation and in the Board’s financing arrangements will be explored and a two-year change management plan will be prepared that will see the RTB become the sector’s regulator in that period. It will be an offence to implement rent increases that contravene the law and the RTB will be given the powers to investigate and prosecute landlords who implement such increases. The onus will no longer be exclusively on the tenant.
Increasing the HAP rent limits in particular local authority areas could have further inflationary effects on the private rented sector, which could have a detrimental impact on the wider rental market, including for those households who are not receiving HAP support. Based on the data outlined, I am currently satisfied that the maximum rent limits, together with the additional flexibility available to local authorities, are generally sufficient to meet the demand of the rental market in these areas.
I am satisfied that the HAP scheme is generally working well and that the additional measures in relation to the rental market under Rebuilding Ireland will provide further support for its operation.
