Higher rent supplement, sometimes you just can’t win.

Raising rent supplement is a tricky solution to a housing shortage for a few reasons. Firstly, if you increase purchasing power where there is scarcity it will likely serve to drive up prices generally.

Think about the following scenario, Joe RentSupplement is trying to rent a home that Jim PrivateRenter also wants, what it boils down to is private renters versus publicly funded renters, and in that mix one now has higher purchasing power.

What is the one simple thing the privately funded renter can now do? Raise their price, this is how they outbid the publicly funded renter, Joe  RentSupplement is still out of a place to call home.

What are the solutions? More public housing – but perhaps not with a ‘for the rest of your life‘ tenancy agreement forming the basis of it. The other thing would be to allow increases for tenancies in situ. This last point cannot be overlooked.

Many of the new homeless come from the private rented sector. This occurs when the prices they are asked to pay are beyond their affordability, far fewer are going into the private rented market for the first time and facing a lockout that results in homelessness.

So some kind of way to match that increase with a longer duration tenancy (best suited if matched with a longer lease) would stop some of the down-flow of people out of the private rented sector and into homelessness.

The situation is fairly grim in Ireland, and shortages take a long time to resolve, this measure is another which is rooted in fairness and equity but which will likely have the consequence of supporting ever higher prices and ensuring that unaffordable rents remains bywords of the day.


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