Due to the housing crisis the rental market has faced major hikes in costs, with rents in Dublin rising 8.8 percent in the year to March 2016, and by 16 percent in the last twelve months in Cork. This has led on the one hand to a reduction in people’s disposable income which can only be deemed a negative factor in the national economy and more significantly, to an increase in homelessness. FLAC’s (Free Legal Advice Centre) recently published findings reveal that 300 families with 600 children have become homeless in the first three months of this year.
How has the law sought to assist those in financial turmoil?
The Irish legal system has sought to utilise the law to better support those living in poverty. It is evident that the government are not adequately dealing with the crisis as the ESRI has stated that 25,000 houses will need to be built per year, yet currently we are only set to deliver 12,000 in 2016.
The concept of modular housing has been discussed but has inevitably given rise to many questions. Costs in respect of the building of each proposed modular house are reported to have reached €243,000 instead of the €100,000 proposed which is hardly value for money considering they are regarded to be a short term solution? The Personal Insolvency Act 2012 has been enacted to alleviate the predicament of those facing bankruptcy with wider options now available including three new debt resolution measures. These include a debt relief notice (a debt write off), a debt settlement arrangement and a personal Insolvency arrangement. Additionally, MABS (the Money Advice and Budgeting Service) has been instrumental in ensuring those facing mortgage arrears and financial difficulties generally can access advice regarding engagement with financial institutions and relevant support in instances of property repossessions. Strikingly, the number of cases taken on by MABS in 2013 was 24,377 which represents a significant increase in the number of cases relating to mortgage arears in comparison to previous years.
In the rental market legislative change in the form of the Residential Tenancies Act 2015 put a cap on rent increases for 24 months rather than the previous listed twelve. The Act also introduced a 90 day notice period required for any changes to the rental agreement – including value of the rent. Despite these measures, the lack of supply is still a critical issue and without a solution to this problem the housing crisis will not be resolved.
What can be done?
Under Article 43 of the Irish Constitution a right to own private property exists however the right to a home is not provided for. FLAC and the Simon Charity have questioned whether this should be altered to allow the right to social housing for every Irish citizen under a certain income. The creation and recognition of this right would require a referendum of the people to insert a right to housing in the Constitution. In the United Kingdom the policy on social housing provides for the unemployed and also for the more vulnerable sections of society through special schemes like The concept of a right to housing already exists in South Africa and certain European countries such as France and Scotland where it is enshrined in legislation. It is also stated under the United Nations, Universal Declaration of Human Rights, that the right to housing is an essential right in creating an acceptable standard of living. However Ireland has not signed this declaration and as such is not legally bound by it. Perhaps it is time we follow our neighbouring countries by signing it in order to force the government to deal with the issue, as it would legally be the responsibility of the state to provide social housing for those who require it. This could result in a large-scale building project rather than the mere 12,500 houses promised by 2020 from the local authorities which are clearly inadequate for the needs of the country as currently over 90,000 households are already on waiting lists.
Unfortunately the financial cost to the state makes this an unlikely development, as the estimated 10,000 new builds a year could cost in the region of two billion per annum. Such an obligation would be incredibly financially demanding on Ireland’s tax base due to the debt burden we have already absorbed from the financial institutions. The ESRI has outlined the idea of a land tax on property developers who continue to sit on urban property without tenants or building projects occurring for long periods of time. This proposed tax would deter developers from sitting on these projects and help advance house building at a more rapid pace.
The rising rental sector and the reduction in rental properties is having a domino effect on disposable income along with more serious issues such as health and education amongst families. A substantial shift in direction is required to deal with this issue to avoid a society where poverty and homelessness become common place. The main parties in the Dail have stated that a new form of politics has begun in Ireland, however it remains to be seen if this government has either the stamina or the stomach to address this alarming problem which continues to deepen on a daily basis. Simon Coveney TD has been appointed as Minister for Housing and the Irish government has promised within one hundred days that a new model of affordable rent and an action plan on housing will be delivered to the Irish public. As with the stigma of Irish politics in recent years, we await to see if these will be just more broken promises.