COMHAIRLE CONTAE ÁTHA CLIATH THEAS
SOUTH DUBLIN COUNTY COUNCIL

MEETING OF HOUSING SPC

Monday, November 18, 2019

HEADED ITEM NO. 7

Differential Rent Scheme Update

The right of local authorities to set and collect rents on their dwellings is laid down in section 58 of the Housing Act 1966. The making or amending of such schemes is an executive function and is subject to broad principles as set out by the Department of Housing, Planning and Local Government including that rent levels should be based on income and reflect tenants’ ability to pay.

At the Annual Budget meeting on Thursday, 14^th November 2019, the Council adopted the 2020 revenue budget. The budget approved by the Elected Members included provision for certain expenditure increases in the Division A Housing & Building Budget compared to the 2019 Budget including increases in provision for planned maintenance funding and re-let repairs – this in addition to certain housing management and maintenance costs that have been absorbed over the last number of years in the housing budget including local property tax, upkeep of communal areas in multi-household developments, increased payroll and contractor costs etc. as well as increasing costs for various other housing services.  This Council's differential rent minimum charge is also currently the lowest nationally.

In addition, the adopted budget also provided for an increase in the housing rents to be collected. The Chief Executive’s preamble to the draft budget to be considered by the Elected Members confirmed that, if the proposed budget was adopted, the increase in housing rents income would be achieved from the following:

• Rents from new properties over 2019 and 2020;
• A €3 increase to differential rents;
• Removing temporary subsidy of rents for certain tenancies – the subsidy will now only apply where the sole occupants of the property are older persons/in receipt of social welfare.

The relevant revenue budget figures in respect of all housing rent income were as follows:

• 2019 Budget Provision for Housing Rental Income €25.2m;
• 2019 Outturn Housing Rental Income €26.4m;
• 2020 Budget Provision for Housing Rental Income €29.4m

The difference between 2020 Provision & 2019 Provision is some €4.2 million. However the difference between the 2019 Provision and the 2019 outturn was an increase of €1.2 million – this increase is attributed to the successful delivery of additional social housing in the County in late 2018 and 2019 increasing housing stock and the associated number of tenancies providing rental income as well as an income buoyancy associated with increasing tenant incomes being assessed for differential rent.

The difference between the 2020 Provision & 2019 Outturn is approximately three million and the measures and means of achieving this increased total for rent collection are:

• A €3 weekly increase in differential rent in all social housing tenancies. (South Dublin County Council currently has the lowest minimum weekly rent in the Dublin area and this increase only realigns our weekly rent with the average minimum weekly rent in Dublin.) This increase across a projected 9,800 social housing, RAS and long-term leased properties will yield in the region of €1.5m additional rental income in 2020.
• Over two thousand tenancies currently benefit from a temporary rental subsidy of €10 per week that was introduced around 2008 for any tenancy for which an older aged person (aged 65+) was included on the rent assessment irrespective of individual or household income. This temporary subsidy was scheduled to be removed completely during the previous Council term. (The current differential rent scheme presented ot the Housing SPC in February 2018 specifically stated that this measure would cease on 31st December 2018.) However, it is now proposed to retain the subsidy for any household being assessed for differential rent that is comprised solely of older aged persons in receipt of social welfare income only. It is estimated that approximately 1,900 households will no longer receive the subsidy thus increasing potential rental income by almost €1 million in a full calendar year. It is acknowledged that in some instances this measure will need to be applied carefully to ensure that some households are not disproportionately disadvantaged in its’ implementation. Our housing rents team will apply certain criteria such as number of persons in a household and assessment of income types to identify and exclude poverty vulnerable persons from the removal of the subsidy where necessary.  This is in addition to a general hardship
• The balance of the projected housing rental income in 2020 of €500k is anticipated based on continuing additional social housing stock numbers, income buoyancy of existing tenancies and a proposed rent review next year.

Following the adoption of the 2020 Annual Budget arrangements are now being made to implement the necessary amendments to the differential rent scheme to effect the increased housing rental collection figure in the budget.