The cost of privately renting a home in the 26 Counties continues to skyrocket. According to Daft.ie private rents rose by over 11% in the twelve months to Sept 2017. This dramatic increase in rental prices occurred despite a range of government measures that were allegedly designed to stabilise prices and make renting more affordable – measures that have clearly failed.
Éirígí has put together an infographic to illustrate just how desperate the situation has become for minimum wage workers in what is one of the wealthiest states in the world. With rents now averaging €1,200 per month, a worker on minimum wage would need to pay out almost 80% of their monthly take-home pay to secure a roof over their heads.
Rent is considered affordable when it accounts for less than 30% of after-tax household income. The affordability gap between 30% and 80% makes it impossible for a minimum wage household to rent an average home in the private sector. Even when two such incomes are combined, the average rent will still account for almost 40% of a dual household income. That leaves just 60% of already low wage packets to pay for food, clothes, heating, medication and other essentials.
A couple on minimum wage with children face an even greater challenge as child-rearing and child-care costs must also be found from within their remaining 60%. For many such couples overtime, shift work and second jobs are unavoidable necessities.
Unfortunately, this situation is not confined to minimum wage households. Many other above-minimum-wage, low income and even middle income families are also paying out in excess of 30% of their net income to their private landlords.
Faced with this reality the state has put in place a range of measures that serve as an indirect subsidy to businesses that pay low wages and landlords that charge high rents. These schemes include Family Income Support, Medical Cards, Rent supports and tax reliefs that are provided to low income families.
Instead of subsidizing employers and landlords, the state need to address the root cause of the problem of unaffordable housing. The only sustainable way to do that is through the creation of a new system of high-quality affordable housing, where the state will provide a home to EVERYONE who needs a home, regardless of their income. Nothing else will work. #PublicHousingForAll