Context for Reform of the Private Rented Sector Rory O’Donnell, NESC Generation Rent : the Future of the Private Rented Sector in Ireland Threshold, RIA, 16 June 2015

Three Major Policy Advances 1.Goals of housing policy 2.Scale & nature of the challenge 3.Social Housing Strategy

Three Major Policy Advances 1.Goals of housing policy: Affordability Sustainability Inclusion (SHS, p. 17) 2.Scale & nature of the challenge 3.Social Housing Strategy

Three Major Policy Advances 1.Goals of housing policy 2.Scale & nature of the challenge: ‘one-quarter to one-third will find it increasingly difficult’ (SHS, p. 17) 3.Social Housing Strategy

Three Major Policy Advances 1.Goals of housing policy 2.Scale & nature of the challenge 3.Social Housing Strategy – Resumed supply & Task Force – Promise policy to manage Buy-to-Lets – Promise policy for private rental sector

Four NESC reports Social Housing at the Crossroads: Possibilities for Investment, Provision and Cost Rental 2.Homeownership and Rental: What Road is Ireland On? 3.Ireland’s Rental Sector: Pathways to Secure Occupancy and Affordable Supply 4.Housing Supply and Land: Driving Action for the Common Good (forthcoming)

Understanding Ireland’s Changing Tenure Mix The long-run role of policy & credit availability Recent role of housing bust & credit freeze The advantages of homeownership over rental - given Ireland’s housing & rental system Role of rent supplement & housing supports Uncertainty facing tenants, landlords, investors & public actors

It’s systemic not just conjunctural & sectoral Homeownership Developers claim its not profitable to build at current prices The price at which it will be profitable to build will not be affordable for many Rental Landlords claim a loss at current rents The rents & regulations at which investment will be profitable will be unaffordable & unattractive to many What links these is the unstable, land- dominated market & failing supply system

The Current Dualist Framing Rent Control Incentives for Developers/Investors OR

The Current Dualist Framing Rent Control Incentives for Developers/Investors OR Need policy on both fronts

From rent control to secure occupancy and From ad hoc incentives to coherent supply-side subsidies with conditionality Secure occupancy Supply-side supports with conditionality and

Putting Secure Occupancy & Incentives in a Wider Context Active land & housing supply management Secure occupancy Supply-side supports with conditionality and Supply-side subsidies with conditionality

Putting Secure Occupancy & Incentives in a Wider Context Active land & housing supply management Secure occupancy Supply-side supports with conditionality Permanent, affordable, rental as a guiding framework for conditional supply-side subsidies and

Enhancing the Role of the Private Rental Sector: the Elements Active land & housing supply management Secure occupancy Supply-side supports with conditionality Permanent, affordable rental as a framework for conditional supply- side subsidies and Social Housing Expansion Resolution of Buy-to-Let Arrears

From rent control to secure occupancy Secure occupancy Supply-side supports with conditionality and Market-sensistive rent regulation Make leases indefinite Sale no longer ends a tenancy Improve dispute resolution

From rent control to secure occupancy Secure occupancy Supply-side supports with conditionality and Market-sensistive rent regulation Make leases indefinite Sale no longer ends a tenancy Improve dispute resolution Affordable housing for intermediate households Student & elder housing Tax reform of rental income Vacant space Reducing cost of construction

Pathways to Permanent Affordable Rental Housing

A strategy that is more than the sum of its parts

Direct Public Influence on Supply Finance Regulation & Cost Interdependent Elements of a Housing Policy

Housing market & rental system are related Dualist & Speculative Unstable prices Rents rise with asset price for regulatory & market reasons Tenants are involuntary & temporary A ‘housing ladder’ Pressure to borrow, lend & give demand subsidies Landlords motivation is capital gain as much as income stream They need flexible tenure to achieve capital gains Unitary & Land Managed More stable prices Predictable rents for regulatory & market reasons Tenants are voluntary & long- term Less ‘housing ladder’ Finance less housing-based, reliance on supply-side policy Landlords motivation is income & long-term asset security They can bear long tenancies & predictable rent uprating