So if one in 10 properties must be allocated to social housing then the remaining 9 houses will be 11% more expensive than they otherwise would be to subsidise the social housing. This is not a tax on developers. It is a tax on house buyers.
The rancid, mindless, dogmatic stupidity of the left would be amusing if it were not going to have real consequences.
The current shortage of rental properties and the increases in rents are obvious consequences of a sequence of actions taken by an incompetent government. It not that these are unintended consequences of policies: it is that anyone capable of performing the simplest of analyses would have easily anticipated them and been able to take corrective action.
What is happening now is the directly foreseeable outcome of a combination of actions:
Removal of low-cost rental units through pre-63 changes without any planning/support/transition arrangements – this resulted in (1) a reduction in overall number of units to rent; (2) removal of low-cost rental units; (3) increase in the number of tenants at the lower-end of the market looking for replacement accommodation. This was analysed in detail here some time ago but this analysis and its forecasts of problems were ignored.The tenants at this low-end of the market cannot afford to pay the increased rent for most expensive units and so are at increased risk of homelessness.
Changes in rental income margins achieved by landlords though reduction to 75% in the amount of mortgage payments that can be claimed, application of PRSI and USC to rental income and property tax – the net effect of this is to increase by at least 20% the amount of rent a landlord needs to charge to make the same return before these changes.
Changes in rent allowance which stopped tenants offering an additional payment to cover the difference between rent allowance and the cost of the rent.
Add to this a PRTB that adds more costs to landlords and whose policies and actions favour tenants just to make being a landlord more expensive and unpleasant.
The recent media outbreak of sob stories about women and children sleeping in cars because they cannot afford to rent where they want to live is a consequence of rent allowance changes. Previously the rent allowance was just an amount of money that could be supplemented by an extra payment to get subsidised desirable accommodation. It put other renters not receiving rent allowance at a disadvantage as it created a hurdle that they has to overcome to match the rent those in receipt of the allowance could afford.
This was a symptom of a social welfare system that was more of a lifestyle choice that a safety net.
Now that the lifestyle element is being slightly reduced, it has led to this unquestioning media-supported howls of sense of entitlement.
So more people chasing a smaller number of rental properties whose costs have increased results in even greater increases and a section of renters at the low-end being priced out of the Dublin market. As Locke wrote in the late seventeen century “The price of any commodity rises or falls by the proportion of the number of buyer and sellers”.
All this was obvious to anyone who performed even the most superficial and nugatory of analyses.
Any balanced, functioning and effective property market needs to include a private rental sector. This fact appals many who see landlords as evil exploiters.
The lessons from previous interferences in the private rental sector that occurred when the nonsensical recommendations of Peter “Rashers” Bacon were implemented were there for all to observe and learn from. Irrational dogma prevents any such learning.
Landlords are being demonised and are being treated as intrinsically evil. This reduces the number of new entrants caused by a reluctance to get involved in buying and renting properties.
This situation is going to get a lot worse before there is any improvement.
There are too many adherents of anti-landlord dogmas pushing their stupid agendas for any change to happen quickly. These are passively assisted by incompetent and listless policy makers and implementers. A simple reversal of some of the changes would stabilise the market while options are explored. This is improbable as it would necessitate those who took the actions admitting their errors.
Apart from the primary impact on the rental market, there is then the secondary consequence of current and former renters looking to buy properties in order to exit the increasing troublesome rental market that then adds to property price increases. And so on.
I am not and have never been a landlord.