Summary:
- Reflecting on the Irish housing approach, it's clear there are mixed outcomes, especially concerning the split provision of housing.
- Issues such as soaring home costs, high rent rates, and limitations in social housing policies have helped create a situation where many people are potentially better off on lower incomes in social housing tenure than higher incomes in other tenures.
- In Ireland, the recent economic boom has resulted in a dysfunctional private market, impacting the middle-income group significantly. This has created a massive divide were only the top income earners and bottom income earners can afford to live in vast parts of Dublin and indeed other cities and towns in the country.
- Rather than drastically increase social housing income limits, government initiatives like cost rental and affordable housing schemes were meant to plug this gap. However as they are linked to ever increasing market rates, they are failing as an alternative.
- I've observed inequalities in these schemes, particularly in income limits and affordability calculations.
- A quick example will examine a one income family of three, consisting of two adults and 1 child, in the recently new mixed tenure developed of The Quarter Citywest.
- In social housing they could earn max €58000 gross. Rent is on average 10 - 15%. Net income after rent is €3045.
- Cost rental is €1580. 35% of net income is max affordability. This means only incomes between €80000 and €104900 are allowed to apply. At €80k there net income after rent is €2922. They are worse off earning €80K in cost rental than earning 58K in social housing. This is clearly a poor incentive to earn more at work.
- Private purchase of the same two bed apartment at €450000 results in a mortgage of €1794. Required income for 35% affordability is €95500. Net income after mortgage is €3331 before mandatory payments such as protection insurance, management fees, property tax etc. Once again they have a lower net income than they would in social housing on a lower income.
- Part V and approved hounding bodies have ensured mixed tenure developments. This means the homes across the different tenures are identical and in the same location.
- Social housing stands out for its security, long-term tenures, and protective measures that other tenures do not benefit from.
- A notable inequity is evident that current social housing residents continue to enjoy low rents of 10-15% even if their incomes grow far above the income limits. Where as 35% is what is considered affordable for these same income levels in other tenures. It is clearly unjust for 10% to be considered affordable in one case and 35% to be considered so in another case, for identical properties in the same location .
- These anomalies in the system seemingly incentivise keeping incomes below social housing limits. Then once in a home you are free to increase incomes and enjoy low rents for life.
- Considering potential solutions, government could consider the idea of making private housing more affordable.
-Another potential solution is significantly broadening social housing eligibility such as in a city like Vienna were 75% of the population are below social housing incomes. This creates fairer mixed income communities.
- There appears to be a need for a national consensus on the percentage of net income deemed affordable, eliminating disparities in identical properties' affordability.
- Reflecting on the Irish housing approach, it's clear there are mixed outcomes, especially concerning the split provision of housing.
- Issues such as soaring home costs, high rent rates, and limitations in social housing policies have helped create a situation where many people are potentially better off on lower incomes in social housing tenure than higher incomes in other tenures.
- In Ireland, the recent economic boom has resulted in a dysfunctional private market, impacting the middle-income group significantly. This has created a massive divide were only the top income earners and bottom income earners can afford to live in vast parts of Dublin and indeed other cities and towns in the country.
- Rather than drastically increase social housing income limits, government initiatives like cost rental and affordable housing schemes were meant to plug this gap. However as they are linked to ever increasing market rates, they are failing as an alternative.
- I've observed inequalities in these schemes, particularly in income limits and affordability calculations.
- A quick example will examine a one income family of three, consisting of two adults and 1 child, in the recently new mixed tenure developed of The Quarter Citywest.
- In social housing they could earn max €58000 gross. Rent is on average 10 - 15%. Net income after rent is €3045.
- Cost rental is €1580. 35% of net income is max affordability. This means only incomes between €80000 and €104900 are allowed to apply. At €80k there net income after rent is €2922. They are worse off earning €80K in cost rental than earning 58K in social housing. This is clearly a poor incentive to earn more at work.
- Private purchase of the same two bed apartment at €450000 results in a mortgage of €1794. Required income for 35% affordability is €95500. Net income after mortgage is €3331 before mandatory payments such as protection insurance, management fees, property tax etc. Once again they have a lower net income than they would in social housing on a lower income.
- Part V and approved hounding bodies have ensured mixed tenure developments. This means the homes across the different tenures are identical and in the same location.
- Social housing stands out for its security, long-term tenures, and protective measures that other tenures do not benefit from.
- A notable inequity is evident that current social housing residents continue to enjoy low rents of 10-15% even if their incomes grow far above the income limits. Where as 35% is what is considered affordable for these same income levels in other tenures. It is clearly unjust for 10% to be considered affordable in one case and 35% to be considered so in another case, for identical properties in the same location .
- These anomalies in the system seemingly incentivise keeping incomes below social housing limits. Then once in a home you are free to increase incomes and enjoy low rents for life.
- Considering potential solutions, government could consider the idea of making private housing more affordable.
-Another potential solution is significantly broadening social housing eligibility such as in a city like Vienna were 75% of the population are below social housing incomes. This creates fairer mixed income communities.
- There appears to be a need for a national consensus on the percentage of net income deemed affordable, eliminating disparities in identical properties' affordability.
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