Threshold/ESRI conference highlights

The week in housing 02/07/21

Today I want to provide a brief summary of yesterday's Threshold/ESRI conference on the private rental sector during the pandemic. It was an extremely interesting event and there is way too much to be covered here in any detail, so I will just focus on some highlights.

Before doing so, however, a few bits of housekeeping:

1.       The next three weeks will feature a three-part special series of the The Week in Housing addressing the deceptively simple question 'what is a home?' We spend a lot of time discussing supply, prices and policy issues, but as I argued in this recent post, if the pandemic has thought us anything about housing it is the importance of 'home' as a place of safety, stability and refuge. The nature of 'home' may also be a matter for public debate soon, if we see a referendum on the right to housing. Over the next three weeks I will bring together and summarise the latest academic theoretical and conceptual work on 'the meaning of home', from the philosophy of Heidegger to more contemporary questions about making a home in the PRS. These posts will be much more theoretical than what I usually cover in these pages, but I think it is well worth taking a step back from the pressing concerns of Irish housing to look at this 'big picture' issue.

2.       You can now comment on The Week in Housing posts, so please get involved in the discussion and comment or ask a question below. I would love to see this newsletter providing a forum for informed debate as most readers are involved in housing in one way or another.

3.       If you are organising an upcoming event or if there is a piece of research you would like me to cover, please get in touch with me via email.

With that said, let’s get back to the conference. It kicked off with a key note address from Prof. Christine Whitehead (LSE), who gave a great presentation which helped to put the Irish PRS in a more international perspective (slides available here). She argued that the PRS is growing globally and regulation has also increased across many jurisdictions, as Governments try to get to grips with affordability challenges. She also suggested there are three big issues in terms of the PRS: increasing regulation; financialization; and short-term letting (Air B&B etc).

Looking at the second of these, financialization, Whitehead noted that at the moment financialization primarily takes the form of international investment in the form of institutional landlords. We are obviously familiar with this in Ireland, but it was very interesting to see the extent to which it is a major issue in many countries. Governments have been focusing on institutional landlords as they see this as the only way to deliver new PRS supply. However, Whitehead also argued that there is evidence internationally that institutional landlords lead to gentrification via higher rents that exclude many tenants. In short, the financialization of the PRS is intensifying the tension between PRS housing as an asset and as a human right, leading to a lot of political pressures, including calls to expropriate rental properties in Germany. However, she also pointed out that affordability problems have a lot to do with labour market dynamics, especially insecurity/precarity. Some countries, such as Denmark and Germany, are attempting to regulate this, so it certainly seems that in both political and policy terms we will see a lot more around this issue in coming years in Ireland and internationally.

Conor O'Toole's presentation argued that the Covid-19 pandemic led to a moderation of rent price growth and to an increase in supply (measured by listings), but this was especially the case in Dublin City. The most likely causal explanation is that short-term letting were converted to the long term market. This may well be reversed in a post-pandemic world. He was involved in previous research published last summer, which is still the most informative thing you can read in terms of the impact of Covid-19 on rental affordability.

Martina McAuley presented research on tenants’ experiences, echoing much of what we're finding in the Irish context, including the issues of security of tenure, affordability and the wider economic impact. Read more about McAuley's research here. There was a lot of crossover between her paper and my own presentation, which was based on my recent research with Juliana Sassi.

Ann-Marie O'Reilly presented new evidence from Threshold's Annual Tenant Sentiment Survey. Some of the highlights included:

·         Only 26% of renters do so out of choice

·         61% would like to be owners in 5 years - but only half of them expect they will be able to buy

·         Longer tenancies are associated with greater feelings of insecurity (I’ve found this in previous research as long term renters often have accumulated bad experiences)

·         Over half of respondents had been in their current home for less than 2 years. This suggests a lot of ‘churn’ in the sector, and is consistent with what we know from other data from the RTB and the Household Budget Survey

·         1/3 of respondents left their last property due to landlord action, primarily due to their landlord selling. Again this is consistent with previous research, such as this Knight Frank survey of tenants.

·         One very interesting finding is that while the majority of tenants believe it is extremely difficult to find a property, this is especially the case for tenants with children. The difficulties faced by families in the PRS – and the growing number of children growing up as renters – is something we urgently need more research about.

This new research from Threshold adds to a lot of the recent work in Ireland which is increasingly showing a PRS characterised by households who don't want to be there, who don't have security and who face major affordability issues (for example this report from Clúid housing and the IIP; this from Eoin Corrigan at the Dept. of Housing, and this report I published with Threshold last year). At this stage, it is very hard to argue against wholesale reform of the sector, given the overwhelming empirical evidence in Ireland and internationally.

And on the subject of reform, the Department of Housing dropped something of a bombshell on Thursday evening by announcing rents in RPZs will be linked to the CPI. On first reading, this is very welcome, but we await further details. The big issues to watch here are around the setting of initial rents when properties first come on the market, rent reviews between tenancies, and any exemptions that may be included in the legislation. These are some of the issues which undermined the RPZ in their original version, as well of course as the perennial issue of non-compliance.

Events

Another big event for those interested in the PRS is coming up on the 14th of July. You can register for the launch of the RTB rental sector survey here. Although it's only summer, budget season is almost upon us, and Social Justice Ireland are kicking off the season with this event on July 5th. Across the water, the Collaborative Centre for Housing Evidence are launching what looks to be a really interesting piece of research on the PRS, health and well-being on the 21st of July.

What I'm reading

The journal Critical Housing Analysis has a new special issue on short-term rentals and the housing market edited by Nicole Gurran and Declan Redmond. This new piece of research looks at the impact of the pandemic and associated lockdowns on people in the UK living in small housing (short blog version of the paper available here). The Dublin Regional Homeless Executive published their May 2021 report. Lois Kapila of the Dublin Inquirer had a really useful piece this week analysing who can deliver cost rental, in what form and for how long.