Submission 2000

Submission to the Planning Group: Local Authority Rent Assistance

1. Introduction

The National Social Service Board (NSSB) welcomes the decision to transfer responsibility for the administration of rent assistance from health boards to local authorities and welcomes the fact that the transfer is being phased in over a two-year period. The Board also supports the retention of SWA rent supplement for emergency purposes, as recommended by the 1999 Inter-Departmental Committee Report (See Note).

The Board considers that it is essential that the work of the Planning Group on Local Authority Rent Assistance and the work of the Commission on the Private Rented Residential Sector (established in 1999) go hand in hand. These initiatives provide an important opportunity to identify and address the broad range of issues and concerns pertaining to the role and functioning of the private rented sector in the overall context of housing policy in Ireland.

The issues and concerns raised in this Submission are based primarily on feedback from the network of Citizens Information Centres (CICs) located throughout the country which are funded and supported by the Board (See Note). CICs are in contact with citizens on a daily basis and are, therefore, well placed to identify key issues that affect people's lives. (Approximately 240,000 queries were dealt with by CICs during 1999). Housing and accommodation difficulties account for some 6 per cent of all queries to CICs. In addition, there is a significant proportion of welfare payment queries which relate to the question of rent supplementation.

The Submission sets out the issues which the Board considers should be taken into account by the Planning Group. While the focus of this Submission is on the role and operation of rent supplementation (approximately one-third of all private rented households receive rent supplement), it is clear that such issues can only be adequately addressed in the context of a clearly articulated policy for the private rented sector as a whole. The reality is that there are increasing numbers of people - single and couples—living in long-term private rented accommodation simply because they cannot afford to buy. Also, for many people long-term housing tenure is at the lower end of the private rented sector. Occupancy at the lower end of the private rented sector is characterised by a wide variety of people, including single long-term unemployed people, young people forced to leave the family home, students, one-parent families, immigrants (including, more recently, refugees and asylum seekers).

2. The Private Rented Sector: The Experience of Citizens

There is strong evidence from CICs around the country that people in the private rented sector experience a range of problems and difficulties. These relate in the main

to:

1. inadequacies in both existing legislation and its implementation; and
2. assistance under the rent supplementation scheme.

Under existing legislation tenants have in theory a number of rights in relation to security of tenure, payment of rent and standards of accommodation. However, a number of problems are reported by tenants on an ongoing basis:

• There is clear evidence of non-compliance by landlords of regulations in respect of minimum standards, rent and registration.
  
• Notice to quit is often not given in writing and does not comply with criteria set out in legislation. It is frequently the case that short verbal notice is given following a dispute between landlord and tenant.
  
• In some cases tenants have difficulty getting landlords to return deposits. For example, there is evidence of deposits being withheld for general cleaning of a flat after the departure of a tenant.
  
• There are major issues about increases in rent by landlords and in what circumstances landlords are entitled to raise rents.
  
• The provision of rent books by landlords, as required by legislation, does not always occur. There is evidence of tenants having to purchase rent books themselves and give them to landlords as distinct from landlords providing the rent book in accordance with the legislation.
  
• It appears that it is difficult for tenants to get insurance for their personal/private possessions. Compensation by landlords may not cover the cost of the damage.
  
• There is clear evidence that there is a reluctance on the part of some landlords to participate in the rent supplement scheme. There are situations where a tenant cannot claim a rent allowance because he or she cannot get the landlord to sign the relevant form. In such instances tenants will usually have to leave the accommodation because they cannot afford to pay the rent.
  
• There is some evidence of landlords and tenants colluding to declare a lower rent to the Community Welfare Officer than is actually the case in order to get the rent supplement. This may result in people getting into debt.
  
• It appears that tenants who experience difficulties in securing deposits for flats do not always get adequate assistance from the relevant statutory agencies.
  
• It would appear that there is a practice by statutory bodies, in some areas at least, of not processing any claims for additional assistance from the State until the tenant is actually evicted as distinct from he/she having been given notice of termination of tenancy.
  
• There are complaints by citizens about breach of regulations by landlords e.g.
  • evicting tenants illegally;
  • entering the property without notice;
  • selling property while tenant still has a valid lease.

This feedback from CICs suggests that shortcomings of present legislation, non-compliance and the scarcity of private rented accommodation together combine to create a situation where tenants have in practice little control over their situation and little power to challenge unsatisfactory conditions. In this context the findings of a recent SVP Report (See Note), which refers to the "appalling conditions that some private tenants live in" (p.12), should be noted.

3. Housing Support: The Role of Rent Assistance (See Note)

The role of rent assistance must be considered in the broader context of housing subsidies in general with particular reference to social housing (direct provision by local authorities and provision through the voluntary housing sector).

While rent supplementation has become a key instrument in social housing, this has happened in an altogether unplanned and non-integrated manner in the context of income support rather than housing policy. In effect, a scheme of ‘last resort' has become a cornerstone of current social housing provision. Also, while housing occupied by tenants dependent on rent supplement is likely to be poorest in terms of quality of accommodation and enforcement of rights of tenants, landlords involved received state subsidies to the value of over £100 million in 1999 (See Note).

While there is a prima facie question here as to whether this level of resource allocation to the private rented sector is the most appropriate in terms of providing accommodation for low-income households in the longer term, the reality is that there are currently 40,000 households in receipt of rent supplement and that this situation will continue for some time.

Many of the issues relating to the SWA Rent Supplement Scheme were identified in the 1999 Inter-Departmental Report(See Note). This referred in particular to the need for greater integration of the rent supplementation scheme with other provisions for social housing.

As indicated the major growth in expenditure on rent supplements (from £60 million in 1996 to over £100 million in 1999) has occurred largely in a housing policy vacuum with little planning and anticipation of emerging trends. In this sense the SWA rent supplement has been a reactive mechanism to cope with emerging housing needs. While this has clear positive aspects in terms of flexibility and potential for quick responses to need, a number of questions arise:

1. Where does the rent supplementation scheme fit in terms of general and long-term social housing policy?
   
2. To what extent is the rent supplementation scheme underpinning rising market prices and/or minimum market rents for poor quality and unregulated accommodation?
   
3. Do the current eligibility criteria for rent supplementation cater adequately and equitably for all households relying on the private rented sector?

In the long term the issue of rent supplementation should be considered in the broader context of the need for a comprehensive benefit scheme to cater for all people dependent on the private rented sector for housing.

4. Issues Identified in Respect of the Operation of the SWA Supplement

A number of problems have been identified in respect of the present system which need to be addressed in the context of the transfer of responsibility for rent assistance from health boards to local authorities.

4.1 Eligibility and entitlement

Currently assistance under the rent supplement scheme is not available to those in full-time work and on low wages who are sometimes in as much need of assistance with housing costs as those on social welfare with broadly equivalent income. While the provision of limited tax relief against rent paid has provided some level of assistance, it is insufficient and does not cater for those whose income is below the tax threshold. This issue needs to be addressed since there is likely to be a continuing high reliance on the private rented sector. (See Section 8 below).

4.2 Administration of rent supplement scheme

To date rent supplements in the private rented sector operate separately from other from other forms of social housing support - the Local Authority Differential Rents system, the rental subsidy to voluntary housing and the DSCFA rent subsidy in respect of ‘de-controlled' dwellings. The transfer of responsibility for administering rent assistance from health boards to local authorities should result in its integration with overall local authority activity on social housing, planning and development.

There are a number of specific problems with the administration of the scheme which need to be resolved.

1. The current health board system of paying rent allowance cheques in arrears is
2. unsatisfactory because landlords for the most part require rent to be paid in advance;
   
3. Since many tenants have problems in getting money for deposits, an easier method of accessing deposits should be put in place;
   
4. The current appeals procedures are not entirely satisfactory because (a) people are sometimes not aware of them and/or (b) they may not be sufficiently independent of the system.
   
5. Information from CICs suggests that there are some variations in practice and inconsistencies across health board areas in respect of:
   • payment of deposits;
     
   • retention of rent supplement on back to work, education and training programmes;
   • In so far as possible, such inconsistencies should be eliminated.
6. There appears to be no mechanism for tenants (or health boards) to secure the return of a deposit in instances where the landlord refuses to do so. This can be to the detriment of the tenant as the health board may refuse to pay a deposit a second time.

4.3 Assessment procedures

The statutory regulations governing entitlement require the health board to be satisfied that:

• the person is in need of accommodation which he/she is unable to provide from his/her own resources;
• the accommodation meets the residential and other needs of the claimant;
• the rent payable is just and proper in the situation.

While guidelines are available for determining what constitutes ‘reasonable need' for financial support for housing costs, ‘reasonable rent' and ‘reasonable accommodation', it would appear that there are different interpretations of these criteria in different health board areas and by different Community Welfare Officers.

Difficulties arise because each application must be assessed on its own merits in accordance with the above criteria which inevitably results in different interpretations of broadly similar situations by different Community Welfare Officers. There may also be a negative perception of the SWA system as a whole resulting in a negative attitude towards having to use this mechanism to apply for rent supplementation. Information from CICs in different parts of the country suggests that some citizens experience the assessment process as unnecessarily invasive.

4.4 Access to information

While access to relevant information is now regarded as an integral part of service delivery, this is not always the case in respect of the rent supplement scheme. There is evidence of difficulties in respect of access to information about the scheme and the criteria for eligibility which may result in people who may be entitled not applying. For example, a survey of a sample of respondents (Guerin 1999) (See Note) found that "only a small minority of respondents felt that they were well informed about the rent supplement scheme ………….(and) that the primary source of information was word of mouth" (p.88).

The Goodbody Report (1998) (See Note)referred to a "significant information deficit with regards to Secondary Benefit retention" (p.78) both at the recipient level and at the departmental/administrative level. The latter was regarded as very significant given that the administrative agencies were "often the initial or only information source used by unemployed persons" (p.78).

4.5 Problem of ‘reasonable rent'

The payment of rent supplement on the basis of reasonable rent presents difficulties on two fronts. Firstly, it implies that there is adequate availability of accommodation at that rent. Secondly, there can be wide variations in the going rate in a particular area. Great care must be taken to ensure that criteria of ‘reasonable need for accommodation', ‘reasonable rent' and ‘reasonable accommodation' do not result in people being constrained to live in overcrowded or unfit conditions or in difficult family situations.

4.6 Amount of rent supplement

Rent supplements are subject to ‘reasonable rents' which are set by the individual health boards. There is a question about whether the maximum amount of rent in respect of which rent supplement is payable has kept pace with the spiralling cost of rented accommodation in all parts of the country in recent years. In some instances there is a significant gap between the level of rent supplement payable and the rents set by the market. This makes it very difficult for some people in particular locations to get affordable accommodation. There is an inherent danger in such situations that, as already stated, landlords and tenants may collude to declare rents lower than they actually are in order to get supplementation, thereby incurring expenditure which the tenant may not be able to afford and which may result in long-term indebtedness.

The basic SWA income on which recipients of rent supplement are expected to live (currently £76 per week for a single person) is extremely low both in absolute and relative terms. It is, therefore, inappropriate as the rate of household income for determining the amount of rent supplement.

4.7 Participation by l andlords

There is a reluctance on the part of some landlords to take rent supplement tenants. This is likely to be due in the main to:

1. non-disclosure of rental income to the Revenue Commissioners;
2. a perception that rent supplement tenants are bad, troublesome or non-trustworthy tenants.

In theory these problems should be lessened with the mandatory registration of private rented accommodation. However, it is estimated that only one-quarter of all landlords have registered their properties with the local authorities, as required. According to relatively recent research (ISIS 1998) (See Note) the reality is that people claiming rent supplement frequently experience difficulties getting landlords to accept them as tenants. There is evidence of advertisements containing explicit exclusion of rent supplement tenants. A recent Threshold study (See Note) found that approximately one-third of Dublin landlords do not accept tenants claiming rent supplement. Of those, almost half perceive claimants of rent supplement as having social problems. Rent claimants are seen as being unwilling to care for the property and/or more likely to ‘upset neighbours'.

5. Assessment of Housing Need: Private Sector Tenants

Housing policy needs to address the long-term housing needs of people in the private rented sector in general and, in particular, rent supplement recipients. Specifically, the lack of security of tenure in the private rented sector should be a determinant of housing need. The transfer of the administration of rent supplement to local authorities should be used as an opportunity to incorporate the particular needs of rent assistance recipients into a comprehensive assessment of housing need and thereby provide a more integrated response to their housing needs.

In the longer term there is a clear need for a more comprehensive social housing programme involving a mix of local authority, voluntary housing and rent supplementation to the private sector. However, this will take time to implement. There is also the need to maintain the principle of choice and to operate on the basis that all households on rent supplement may not want to become local authority or voluntary housing tenants.

In the short to medium-term it is crucial to maintain a vibrant private rented sector providing secure, safe, quality and affordable housing for both existing and future tenants. This will require considerable improvement in regulation and quality control, particularly at the lower end of the market. Current economic and housing realities result in a situation where the private rented sector cannot be regarded as a short-term, transient tenure while people are waiting to get permanent accommodation. While people may not wish to stay long term in the private sector, the reality is (a) that increasing numbers of people are no longer able to purchase houses because of spiralling prices; and (b) waiting lists for local authority houses continue to increase.

Consideration should, therefore, be given to establishing mechanisms for partnership between local authorities and the private sector in Ireland with a view to providing affordable rented accommodation. This would also allow provision for such people to be tied into long term arrangements and ensure compliance with standards.

6. Legislation for the Private Rented Sector

While the legislation governing the private rented sector has improved in recent years, there are still significant gaps in relation to security of tenure, minimum standards, rent levels and dispute resolution mechanisms. As a general principle, legislation should be updated and consolidated as some of its key aspects date from the 1860s. This updating and strengthening of legislation should take place in the context of adequate enforcement mechanisms with an appropriate allocation of resources for this purpose.

6.1 Security of tenure

Tenants on periodic tenancies can receive notice of 28 days to quit without any reason being given by the landlord. Tenants on leases, normally up to a maximum of one year, have no rights when this lease comes to an end. In some instances, it would appear that notice is given or leases not renewed so that rents can be increased or tenants who have complained about conditions can be removed.

Greater security for tenants in the private rented sector could be achieved through a combination of lengthening the notice-to-quit periods (in line with the length of time the tenant has been renting the accommodation) and the introduction of a legal mechanism whereby landlords would have to give ‘due reason' based on fair grounds as to why tenants were being asked to leave. There is also a need for provision in legislation for more specific contracts, particularly for periodic tenancies, which would offer a minimum period of fixed tenancy and clear termination conditions for both landlords and tenants. Provision should also be made for more rights for tenants in respect of renewal of tenancies.

6.2 Rent certainty

Another key issue in respect of security of tenure is the frequent and substantial increases in rent. There should be a system which ensures that general rent increases are linked to inflation and that guidelines are established for other increases arising from upgrading of accommodation. Security of tenure for tenants would be enhanced by some provision for rent certainty. This would mean that rents could not be increased arbitrarily by landlords but would be tied into a system of index-linking of rent rates as in the case of wages and social welfare payments.

6.3 Resolution of disputes

There are no rapid dispute resolution mechanisms to deal with disagreements between landlords and tenants. Disputes can arise over conditions, deposits, rent levels, rent arrears, evictions and notice to quit. There is a need for some form of mediation service which would give both tenants and landlords a fair, inexpensive and expeditious way of dealing with complaints. Integral elements of such a service would be a short time-scale for responses and no provision for legal representation. Where the mediation service fails to resolve the issue either party can have recourse to the courts. However, this may not always be a realistic option in the case of people who are socially disadvantaged.

6.4 Anti-discrimination

There is a need to eliminate discrimination in respect of access to and retention of tenure in the private rented sector. The principle of equality should apply equally to private rented housing as it does to employment. Discrimination based on factors such as ethnicity or whether or not a person is in receipt of rent supplementation should be eliminated. The Equal Status Act prohibits discrimination in the sale and letting of property. However, as in other areas of legislation, enforcement will be the key issue.

Structures should be put in place for co-operation between the Director of Equality Investigations and the local authority in implementing the different aspects of legislation for which each has responsibility. In particular, local authorities and the Director of Equality Investigations should establish formal consultation mechanisms to ensure that the regulatory authorities operate in tandem.

6.5 Monitoring and enforcement of legislation

There would appear to be frequent breaches of legislation pertaining to the private rented residential sector. Evidence from CICs suggests that in many instances landlords are not adhering to the legislation. On the face of it, it seems that there is very little policing of the private rented sector by local authorities which have the responsibility to enforce the legislation. The current system for enforcement and monitoring is inadequate. It is frequently left to individual tenants or to voluntary/community organisations acting on their behalf to seek redress. Indeed, it can be argued that local authorities as enforcers may be in a conflict of interest situation in that strict enforcement may result in increased numbers on their housing lists.

Additional resources should be made available for monitoring the implementation of regulations governing the private rented sector. There is scope for co-operation between local authorities and the Revenue Commissioners in this regard.

While there is an obvious need for stronger enforcement of legislation in respect of registration, standards, rent books and tax compliance, enforcement must be done in a manner which ensures that the situation of people reliant on the private rented housing sector is not actually worsened. A common theme running through queries from citizens is that even when they are informed about their legal rights in relation to conditions and security of tenure, they are often afraid to challenge the landlord in this regard because of fear of retaliatory notice to quit. While in theory tenants have some legal protection, in practice the scarcity and lack of choice of suitable accommodation, especially in recent years, makes them very wary about enforcing their rights.

7. An Enhanced Role for Local Authorities

There is significant potential for local authorities to become more involved in the private rented sector with a view to both increasing supply, enforcing regulations and getting more favourable arrangements for rent supplement tenants.

7.1 Increasing supply

On the supply side there is potential to apply the public/private partnership concept to the provision of rental accommodation. As already stated, there would appear to be scope for some joint financing of housing in the private rental sector. There are other ways in which the partnership approach can be implemented. For example, local authorities might consider mechanisms such as the following:

• compiling accommodation registers;
• deployment of tenancy relations officers;
• guaranteeing tenancy arrangements;
• leasing property from landlords;
• nomination rights to ensure that landlords allocate accommodation to households proposed by local authorities.

7.2 Integrated social housing provision

As a general principle, responsibility for the administration of rent assistance should be integrated with overall local authority activity on social housing, planning and development. There should be an interweaving of arrangements for the private rented sector with those for allocating local authority housing and funding voluntary housing in the overall context of development planning to ensure an adequate supply of housing. The City and County Development Boards should, when drawing up their plans, include an assessment of social housing needs, including private rented sector needs.

7.3 Monitoring and enforcement of regulations

As already stated, there is a need for greater enforcement of housing protection legislation. In this regard more resources and prioritisation by local authorities of the regulation of the private rented sector is required. Inspection of private rented accommodation needs to be extended as does provision for monitoring landlord registration.

8. Housing Benefit and the Private Rented Sector

In view of the continuing high level of reliance on the private rented sector, in the short to medium-term at least, the basis for eligibility for rent assistance needs to be reviewed. We consider that the question of a comprehensive housing benefit should be addressed.

A comprehensive housing benefit was recommended by the Commission on Social Welfare (1986). The Commission took the view that this should cover all housing subsidies including the local authority differential rent scheme. In a number of reports, the NESC has argued in favour of a national housing benefit scheme for the private rented sector and owner occupiers.(See Note) The Expert Working Group on Integrating Tax and Social Welfare came to the conclusion that there is a case for a more unified housing policy. Within that policy, particular attention should be given to ensuring the employment and poverty traps are avoided. Its recommendations in relation to retention of rent supplement have been implemented but it did not elaborate further on the nature of the unified policy.

Since these reports were compiled, attempts have been made to address the inherent employment and poverty traps by allowing various groups to retain the rent supplement when taking up employment or training. These measures, while welcome, have led to considerable confusion and, more importantly, to further anomalies. Furthermore, these reports were all compiled at times when employment and poverty traps were the major problems in relation to rent supplement. Since then, the labour shortages in essential services and in low paid employment make the question of rent supplementation for employed people even more urgent. The recommended solution - a comprehensive housing benefit - would address the problems of the employment and poverty traps as well as the anomalies which have arisen from the retention of entitlement and the problems faced by lower paid workers.

We, therefore, consider that the issue should be dealt with in the context of a comprehensive scheme of housing benefit catering for all people in the private rented sector. The more comprehensive proposal of the Commission on Social Welfare, while desirable, would take much longer to implement and could be addressed at a later stage. In the interim, as local authorities will be administering both the differential rent scheme and the housing benefit, it should be possible to monitor any difficulties which arise from the existence of the two subsidy schemes.

The housing benefit would be based on an assessment of housing needs, income and means. It would have the added advantage that it could be structured in such a way as to obviate the need for retention of rent assistance as a secondary benefit. Indeed, a properly structured housing benefit would not have the claw-back problems, which exist under the current system. The level of benefit would be tapered in accordance with people's income. The system of rent tax relief could also be integrated into a comprehensive housing benefit scheme. This might also serve to lessen the apparent discrimination by some landlords against rent supplement recipients.

9. Information, Advice and Advocacy

The enforcement of regulations is the responsibility of the statutory bodies concerned and it is their responsibility to provide comprehensive and integrated information to both landlords and tenants about rights, responsibilities and entitlements. It is also necessary that tenants have easy access to independent information, advice and advocacy services. There is a need to ensure that there is easy access to such services in all parts of the country. The role of relevant voluntary and community organisations should be recognised and supported.

10. Summary of Key Recommendations

• The following specific issues need to be addressed in the context of transferring responsibility for rent assistance from health boards to local authorities:
  • ‘reasonable rent' and ‘reasonable accommodation' criteria in the context of rising market prices;
  • registration of landlords;
  • consistency in payment of deposits;
  • payment of rent supplement in advance rather than in arrears;
  • an independent mediation system.
• Local authorities should become much more involved in the private rented sector with a view to providing an integrated social housing programme, increasing supply, enforcing regulations and getting more favourable arrangements for rent supplement tenants.
  
• Consideration should be given to establishing mechanisms (including financial incentives to investors) for partnership between local authorities and the private sector with a view to providing affordable rented accommodation.
  
• There should be an interweaving of arrangements for the private rented sector with those for allocating local authority housing and funding voluntary housing in the overall context of development planning to ensure an adequate supply of housing.
• Local authorities should establish mechanisms for:
  • compiling accommodation registers;
  • leasing property from private landlords;
  • guaranteeing tenancy arrangements;
  • deploying tenancy relations officers;
  • procuring nomination rights to ensure that landlords allocate accommodation to households proposed by the local authorities.
    
• Local authorities should make additional resources available and establish specific mechanisms for monitoring the implementation of regulations governing the private rented sector. There is scope for co-operation between local authorities and the Revenue Commissioners in this regard.
  
• Legislation should provide for more specific tenancy contracts, particularly for periodic tenancies, which would offer a minimum period of fixed tenancy, rent certainty and clear termination conditions for both landlords and tenants.
  
• In view of the continuing high level of reliance on the private rented sector, a comprehensive scheme of housing benefit should be introduced catering for all people in the sector. The level of benefit should be tapered in accordance with people's income.
  
• Private sector tenants in all parts of the country should have easy access to independent information, advice and advocacy services.

Notes

See, for example "A Review of Housing Policy", Report No 87, 1988 "A Strategy for the Nineties"1990.