More than half of renting households receive support for housing costs

May 26, 2022

Taxation, Welfare and Pensions
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Download an infographic highlighting key findings from the study. 

Almost 300,000 (293,673) households received support for their housing costs in 2020, up from 134,973 in 1994. This amounts to 16 per cent of households overall and 54 per cent of those renting. Over this time there has been a shift away from the direct provision of support – through local authority and approved housing body owned accommodation – towards indirect subsidisation of housing costs in the private rental sector, with Housing Assistance Payment (HAP), Rental Accommodation Scheme (RAS) and Rent Supplement (RS) combined assisting around one-in-three supported renters today, compared to just one-in-five in the early 1990s.

These are among the main findings of a new report published today by the Economic and Social Research Institute (ESRI) examining housing supports for low-income renters.

Other key findings of the report include:

  • Both direct and indirect supports do a huge amount to improve affordability for the households receiving them: Despite their lower levels of income, we estimate the median rent-to-income ratio – a key metric of housing affordability – is 0.147 for supported renters compared to 0.230 for unsupported renters. The greater affordability of housing for supported renters remains after controlling for dwelling type, location and quality.               
  • There are questions about how well targeted these housing supports are: many low-income renters receive no support for their housing costs and face high rent-to-income ratios, while almost one-in-five (16.7 per cent) of supported renters are in the top half of the income distribution.
  • The qualification criteria for housing supports have become more restrictive in recent years: we estimate that the share of households eligible to apply to their local authority for support with housing costs fell from 46.8 per cent to 33.9 per cent between 2011 and 2019, largely because of a freeze to most income limits.
  • The rent limits for HAP cover a very small share of properties, particularly in cities for single adults: across Dublin, only 6 per cent of one-bedroom tenancies registered in 2020 came under the maximum rent allowed for single adults claiming HAP, while only 7 out of 31 local authorities had at least a quarter of one-bedroom tenancies below these limits (see infographic). This is in part because rents for new tenancies increased by 24 per cent between 2017 – when these rent limits were last revised – and 2020, but it also reflects differences in coverage across counties when introduced.
  • There is substantial variation across local authorities in the level of support provided to otherwise identical households: more than 9-in-10 supported renters have their rent contributions– and so their level of support –determined by their local authority’s differential rent scheme. These vary hugely in their design across local authorities, leading otherwise identical households to receive different levels of support. For example, a lone parent with two children earning €25,000 per year would pay a contribution of just €226 per month in South Dublin County Council, €313 per month in Donegal but €450 per month in Meath (see infographic).

Barra Roantree, one of the authors of the report, said:

“The size of the supported rental sector has grown significantly in recent decades, with more of this support now provided indirectly through schemes like HAP. While both direct and indirect supports greatly improve affordability for households, our finding that almost one-in-five supported renters are in the top half of the income distribution raises questions about how well targeted these supports are.”

Michael Doolan, one of the authors of the report said:

“Given the expected reliance on HAP to meet social housing needs in the short- to- medium term, the anomalies created by a highly localised system of differential rents are likely to affect a growing number of households over the coming years. This means that without reform, more households will receive varying levels of support for their housing costs depending on which county they live in.”

Rachel Slaymaker, one of the authors of the report said:

“Our report highlights the chronic undersupply of affordable rental accommodation in many areas, particularly for low-income single adults. Addressing this is likely to require sustained investment in and expansion of the public housing stock for rent: something that will entail more than just increasing expenditure.”