Dáil Éireann Debate, Tuesday - 6 October 2020
79. Deputy Paul Murphy asked the Minister for Housing, Local Government and Heritage if a scheme will be put in place for private sector rent write-offs for tenants who have lost income as a result of the Covid-19 pandemic. [28323/20]
Amharc ar fhreagraWith effect from 1 August 2020, the Residential Tenancies and Valuation Act 2020 introduces protections for those tenants who are facing rent arrears and, as a result, are at risk of losing their tenancy. If a tenant’s ability to pay rent has been impacted by Covid-19 and the tenant meets specific criteria, new procedures and protections apply. Tenants who follow these procedures cannot be required to vacate their rental accommodation before 11 January 2021, and are not required to pay any rent increase in respect of the period ending 10 January 2021.
My Department has published a guidance document, the Residential Tenancies and Valuation Act 2020: What this Means for Landlords and Tenants, which sets out exactly what is expected as the rental protections under the Emergency Measures in the Public Interest (Covid-19) Act 2020 expire, and provides details on the new protections for tenants in rent arrears and the income and other supports available to tenants and landlords. This guidance document clearly explains the new rent arrears procedure for both landlords and tenants facing rent arrears. The Guidance document is available on the Department's website - www.housing.gov.ie - and on the RTB's website - www.rtb.ie.
The RTB has engaged with stakeholders with regard to the recent tenancy protection enhancements and launched a related YouTube video. The RTB also launched targeted advertising campaigns informing the public of the enhanced protections and directing people to its website for more information. The advertising campaigns ran from 15 April until to 1 August 2020 and a mail-shot to tenants and landlords is underway since mid-September.
The RTB and the Money Advice and Budgeting Service (MABS) are working with tenants in rent arrears to outline the financial supports which may be available to enable the tenant to meet their rental obligations to sustain their tenancy.
The Residential Tenancies and Valuation Act 2020 provides for permanent enhancements to tenancy protections that require a landlord to copy the RTB with any written rent arrears warning notice given to a tenant seeking the payment of all rent arrears within 28 days. The RTB will acknowledge receipt to the landlord and tenant and provide the tenant with written information to enable them to get advice from the Money Advice and Budgeting Service (MABS) and on the income and other supports available. If the tenant agrees, the RTB can help them to engage with MABS to resolve their rent arrears and sustain their tenancy.
Tenants are required to pay rent to their landlord and, in the event of tenants having difficulty doing so on foot of Covid-19, they are encouraged to engage with their landlords at the earliest opportunity.
Tenants facing difficulty in meeting the rental payments should engage with the Department of Employment Affairs and Social Protection (DEASP) as income supports such as Rent Supplement and Supplementary Welfare Allowances are available to assist them. Further information on these supports can be found by calling the DEASP Income Support Helpline for Covid-19 on 1890 800 024 or by visiting the DEASP website at: https://www.gov.ie/en/organisation/department-of-employment-affairs-and-social-protection/?referrer=https://www.welfare.ie/en/Pages/home.aspx. My Department and the RTB urge landlords to consider the negative impacts of Covid-19 on their tenants and to show forbearance where temporary rent arrears might arise. Tenants and landlords are urged to discuss any problems promptly, keep lines of communication open and respect each other’s positions. If the problem cannot be resolved, registered landlords and all tenants can apply to the RTB for dispute resolution. Further information is available on www.rtb.ie.
My Department and the Economic and Social Research Institute (ESRI) operate a programme of collaborative research principally focused on housing economics. Under this programme, researchers from the Institute and my Department prepared a research paper exploring the short-run implications of the Covid-19 pandemic on the private rental market. The research paper is focused on rental payment affordability and the potential incidence of arrears during the first three months of the pandemic among non-supported private market renting households, that is, among renting households which do not receive a housing subsidy. Changes in consumption patterns arising from public health measures are also considered in the paper. The research findings do not identify a significant rent arrears problem emerging during the first three months of the pandemic.
Principal Findings on Affordability
- Prior to Covid-19; circa one-in-three or approximately 70,000 private renter households did not have sufficient income remaining after housing costs to cover a minimum standard of living expenditure prior to the pandemic. The evidence suggests that in the very short run (between mid-March to mid-June 2020), the unique and extraordinary circumstances of the prevailing situation mean the affordability pressures are not likely to have worsened overall. Indeed, some private renter households may be better off.
- This is due to the fact that short-run changes to expenditure and consumption, which came about mainly as a result of the public health restrictions, are likely to have outweighed the decline in incomes.
- The research paper finds that the share of households who's after rent income is insufficient to purchase a minimum bundle of goods falls to just under one-in-five (from one-in-three).
- However, these are very short-term effects and unique to the period in which households have been advised to stay at home and restrict movements.
- Many non-supported private renters face longer-term structural affordability pressures that are likely to worsen quickly as expenditure requirements (such as on transport and childcare) rebound quicker than incomes.
- Indeed, the Covid-19 labour market shock has been heavily concentrated in sectors (such as accommodation and food) of the economy whose employees are more likely to be renters than homeowners.
Principal Findings on Missed Payments
- Understanding the level of missed rental payments and arrears (both before and since the pandemic) is exceedingly difficult given the absence of national, real-time data on missed payments.
- Given the unprecedented nature of the current pandemic, it is very difficult to estimate the trajectory of the actual rate of missed rental payments using historical relationships.
- Model estimates suggest that there is likely to be an increase in missed payments due to the income and particularly, unemployment shocks faced by certain households. However, this increase in missed payments is likely to be tempered in the short-run due to consumption expenditure falling more rapidly that incomes which reduces the likelihood of missed payments for many households in the short-term. Model estimates suggest a moderate rise in missed payments due to the combination of these factors from 9.8% to 10.8% of households.
Given the State income supports available, including those available for tenants in arrears, and informed by the evidence provided by research into this area, it would not be appropriate to establish a scheme for write-offs of rents payable in the residential rental sector which plays an important role in providing accommodation for many.
