Subsidies to private landlords to top €1 billion in 2022 – Matt Carthy TD
Cavan Monaghan TD, Matt Carthy, has said that government expenditure on subsidies to private landlords is likely to surpass €1billion in 2022, representing ‘an indictment of a government housing policy that is actually making the situation worse.’
The Sinn Féin representative was speaking following an engagement with senior officials from the Department of Housing at the Dáil’s Public Accounts Committee.
Carthy said:
“The Housing crisis in Ireland did not happen by accident. It is a direct result of the policies pursued by Fianna Fáil and Fine Gael.
“Rather than build houses, government have instead diverted funds to subsidising landlords, The impact of this is multi-fold. Those in need of housing support, rather than being allocated a council house as in the past (whereby they would pay rent which could then be invested in further house builds), were instead forced into private rental accommodation subsidised by the taxpayer. This then has caused rents to rise which has forced house prices to inflate. The net result is that many young workers and families will never be in a position to buy their own homes, while those parties remain in power.
“The revelation that this year Irish taxpayers will be subsidising over €1billion in these schemes to landlords is nothing short of scandalous.
It reinforces the need for real change in housing policy, which will only be delivered by a change in government.”
The exchange at the Public Accounts Committee went as follows:
Deputy Matt Carthy: “I want to go back to the issue of private subsidies in the context of delivering on housing need. The expenditure for 2020 on the HAP scheme was €464 million, is that correct?”
Mr. Graham Doyle: “Yes, that is correct.”
Matt Carthy: “That figure increased to €542 million last year?”
Graham Doyle: “Last year, yes.”
Matt Carthy: “What is the expected outturn this year?”
Graham Doyle: “The Estimate amount for 2022 is €584 million.”
Matt Carthy: “How many people were housed through HAP schemes in each of those years?”
Graham Doyle: “It was just under 60,000 in 2020 and just under 62,000 in 2021. Those were the active tenancies supported at the end of each of those years.”
Matt Carthy: “How many residencies will be accommodated by the outturn of €584 million?”
Graham Doyle: “For the current year, we are planning for an additional 10,000 residencies. It is something of that order. I will ask one of my colleagues to get the figure now.”
Matt Carthy: “It will be in the region of 74,000?”
Graham Doyle: “There are also people exiting RAS, many of whom go into social tenancies. The end-of-year figure will be in the region of 10,000 more. I will get that figure for the Deputy now.”
Matt Carthy: “I understand the RAS will remain fairly static. In 2020, €133 million was spent on RAS?”
Graham Doyle: “That is correct.”
Matt Carthy: “The figure decreased last year?”
Graham Doyle: “It decreased last year.”
Matt Carthy: “The figure I have is €122 million. Is that right?”
Graham Doyle: “That is the correct figure.”
Matt Carthy: “An increase is forecast for the coming year, however?”
Graham Doyle: “Under the Estimate, €133 million is provided.”
Matt Carthy: “Does Mr. Doyle expect that to be spent?”
Graham Doyle: “We expect it to be spent, yes.”
Matt Carthy: “How many tenancies were affected in 2020 and 2021, respectively? What is the expected number for 2022?”
Graham Doyle: “At the end of 2020, it was 17,700, let us say. At the end of 2021, it was just under 17,100. Obviously, there are people entering and exiting the RAS.”
Matt Carthy: “Okay. Rent supplement is paid through another Department but there is obviously a relationship with Mr. Doyle’s Department because people who are on rent supplement—–”
Graham Doyle: “Yes, they move generally. RAS has stayed relatively level. Rent supplement has come down. Many of those tenancies probably moved into HAP in that period.”
Matt Carthy: “The figures I have are that in 2020 the expenditure on rent supplement was €95 million, while last year it was €123 million. That seems to be a substantial increase. Does Mr. Doyle have a rationale for why that is the case?”
Graham Doyle: “It is in the Vote of another Department. I do not know if some of it is related to the pandemic in the past couple of years. That may be the case but I am speculating. It is not in my voted expenditure.”
Matt Carthy: “In terms of emergency accommodation, the expenditure has been dropping. The figure I have is €271 million for 2020.”
Graham Doyle: “The core funding for emergency accommodation has gone up a little. There was a big jump in that subhead from 2019 to 2020, and that was very much related to the pandemic. There was a very high level of homelessness – there still is – but it was particularly high at the end of 2019, going into 2021. Between the pandemic and additional funding provided to support homeless services in that year, there was a very large increase in the amount of Exchequer funding provided that year. That came down last year, as the Deputy stated. The Deputy may be about to ask me about 2022. That figure is €194 million, which, if we compare it with 2019 in terms of a more representative year, is a significant additional amount of funding.”
Matt Carthy: “I take it that figure does not include emergency accommodation for people seeking international asylum.”
Graham Doyle: “No, that is a separate Department.”
Matt Carthy: “It comes from a different Department. I refer to the estimated outturns of €585 million for HAP and €133 million for RAS. I will assume rent supplement will remain static in the context of the upward trajectory we have seen, giving a figure of €123 million. The amount for emergency accommodation is €194 million. If we also take into account the figures Mr. Doyle cannot give us, that is, the private contribution towards HAP tenancies, as well as other contributions that are forced on tenants in this regard, it is fair to say that, across the schemes, well over €1 billion will be spent this year?”
Graham Doyle: “Those are the Deputy’s figures. He has taken some figures from other Departments as well.”
Matt Carthy: “Essentially, what we are talking about here is people who are availing of schemes that involve subsidies to private interests. In most instances, those people would be better served by, and much prefer to be housed in, a direct social housing scheme, as was traditionally the case.”
Graham Doyle: “Government policy is to build those units in order to do that. One small nuance is that RAS has probably been moving significantly towards the AHB sector in recent years, which is a charitable sector focused on the provision of housing to people who need it.”
Matt Carthy: “The Department’s trajectory was mentioned earlier on. The ratio referenced for 2017 was 50:50 in terms of what would be spent on subsidisation versus capital and the trajectory was to move that to 75:25?”
Graham Doyle: “Yes. There has been a significant increase in the social housing investment programme, which is the capital funding piece.”
Matt Carthy: “Essentially, that is a recognition on the part of the Department that these schemes did not represent good value for money?”
Graham Doyle: “No. That is not what it says, at all. It is a recognition that Government policy is to invest in building new-build social houses.”
Matt Carthy: “If we go back to the year of appropriation, when we are talking about €464 million for HAP; €133 million for RAS; €95 million for rent supplement and €271 million for emergency accommodation. Mr. Doyle was indicating there was a distinction between some of the SHCEP scheme funding in terms of private leasing arrangements and others, which I gather are approved housing bodies. What would the breakdown of that €191 million have been for the former?”
Graham Doyle: “In 2020?”
Matt Carthy: “Yes. For private landlords.”
Graham Doyle: “The last time I was here, Deputy Carthy gave me a fair rattle with regard to long-term and enhanced leasing, which I can completely understand. I know he is specifically interested in those. The long-term and enhanced leasing was just over €37 million. There are a range of other programmes included under that. Some is leasing from the National Asset Residential Property Service, NARPS, programme, which is an National Development Finance Agency, NDFA, type social housing programme. The biggest piece of that programme is under the CALF, the AHB funding piece in terms of payment and availability. That is €114 million.”
Matt Carthy: “How much was delivered to local authorities for capital build and acquisition of housing in 2020?”
Graham Doyle: “Is the Deputy asking about the main scheme to build in 2021?”
Matt Carthy: “I am asking about 2020, initially. Mr. Doyle can give me the figure for 2021, as well.”
Graham Doyle: “The figure was €890 million in 2020.”
Matt Carthy: “Was it €890 million in capital for local authorities?”
Graham Doyle: “In terms of pure capital, the build programme was allocated €961 million in 2021. The Estimate for 2022 is €1.5 billion.”
Matt Carthy: “In terms of the outturn of houses for each of those three years, what did we get for €890 million and €961 million? What do we expect to get at the end of this year in terms of houses available to those who need them?”
Graham Doyle: “That programme is led by Ms Stapleton and I will let her respond on the outturn figures.”
Ms Áine Stapleton: “I will get the figures that go with the expenditure. The Deputy is looking at 2020, in particular.”
Matt Carthy: “Yes. I am also looking at the outturns for 2021. People want to know how many houses are being delivered.”
Áine Stapleton: “The build output for 2020 was 5,070. The acquisitions delivery for 2020 was 1,314 and the leasing was 1,440.”
Matt Carthy: “The leasing?”
Áine Stapleton: “Yes.”
Matt Carthy: “What does that mean?”
Áine Stapleton: “That would be—–”
Graham Doyle: “It is not within that programme. The Deputy was just asking on that programme.”
Matt Carthy: “I was asking what we actually got for the €890 million.”
Áine Stapleton: “The Deputy is looking at the A3 allocation. I apologise. It is build and acquisition.”
Matt Carthy: “Yes.”
Áine Stapleton: “That is 5,070 and 1,314, respectively.”
Matt Carthy: “What are the corresponding figures for 2021 and 2022 in terms of projected outturn for 2022?”
Áine Stapleton: “We are currently concluding our statistical returns for 2021. I do not have the output figure for the year as a whole. We expect to have that over the coming weeks. We will certainly share that with the committee, as soon as we have the verified data.”
Matt Carthy: “I will come back in on that.”
Chairman: “I think the quarter 3 figures were approximately 3,600.”
Áine Stapleton: “Those are available and I can give them to the committee, if it is interested.”
Graham Doyle: “There is a significant level of delivery in the last quarter, as I know the Deputy is aware.”
Second engagement:
Matt Carthy: “Mr. Doyle mentioned an estimated 10,000 additional people on HAP by the end of the year. As the budgets for other schemes are not projected to fall, I assume that figure relates to new entrants. Is it fair to say that these are people who are not in receipt of any subsidised support?”
Graham Doyle: “That would be new entrants. I am sorry, I had estimated 10,000 earlier as I did not have a figure to hand. What is budgeted for and what is projected is 14,000.”
Matt Carthy: “That would bring the total figure to 78,000?”
Graham Doyle: “No, that is without exits. We also are planning for something in excess of 5,000 exits too.”
Matt Carthy: “Therefore that would be 9,000 net.”
Graham Doyle: “It would be 9,000 net.”
Matt Carthy: “Okay. Then, on my figures, 73,000 or thereabouts will be on HAP by the end of the year.”
Graham Doyle: “I do not have a figure in front of me but I would not dispute that.”
Matt Carthy: “Of 5,000 coming out of HAP, how many —–”
Graham Doyle: “Some of those will be transfers from rent supplement as well, obviously.”
Matt Carthy: “Okay, so will they be in social housing or affordable housing?”
Graham Doyle: “Rent supplement is a very short-term support that the Department of Social Protection provides.”
Matt Carthy: “Is Mr. Doyle saying that 5,000 people will be removed from the HAP and rent supplement schemes this year?”
Graham Doyle: “We expect 5,000 exits from HAP.”
Matt Carthy: “How many of those who exit HAP does Mr. Doyle anticipate will be offered a social house?”
Graham Doyle: “I do not have a figure before me but I think it is a significant proportion. In 2021, the number of exits to a social house was 4,500.”
Matt Carthy: “Going back to the €1.5 billion that has been allocated to capital this year, how much of that is going directly to local authorities for building and acquisition?”
Graham Doyle: “In terms of the—–”
Matt Carthy: “How much is going to local authorities as opposed to AHBs?”
Graham Doyle: “That is in the A3 subhead the Deputy referred to earlier.”
Áine Stapleton: “I might come in on the A3 figure. That is largely for the financing of local authority builds. The AHB build is shown in the capital advanced leasing facility, CALF, subhead, which is separate.”
Matt Carthy: “That €1.5 billion is predominantly going to—–”
Áine Stapleton: “It is predominantly for local authorities. That is correct.”
Matt Carthy: “How many new local authority houses will be provided by the end of the year?”
Graham Doyle: “As a part of the new-build programme?”
Matt Carthy: “Yes.”
Graham Doyle: “For the 2022 new-build programme, we are targeting 9,000 homes. Our pipeline is looking promising at the moment.”
ENDS
