Rent allowance and the curse of good intentions

Earlier this week, the Irish Times ran a story entitled “Daft.ie to continue use of ‘rent allowance filter’ on searches“. The thrust of the story was that the Department of Social Protection (DSP) had asked Daft.ie to remove a function that allows landlords to refuse to let to people on rent allowance and that Daft.ie said no. With the local and European elections just around the corner, unsurprisingly politicians jumped on board. Labour TD Aodhan Ó Ríordáin said that he was disappointed over this decision and would like Daft.ie to come before the Social Protection Committee – of which he is a member – to explain themselves. Perhaps summing up the mood for some, a spokesperson for Focus Ireland said: “Can you imagine the uproar if landlords were allowed to say, ‘Travellers or Muslims not accepted’?”

One of life’s big lessons, in my opinion, is that nine times out of ten, if someone else is acting in a way that seems odd to you, you probably don’t know the full story. And so it proves with this. As most readers will know, Daft.ie employ me to undertake the analysis for the quarterly Daft.ie Reports and, by coincidence, the latest Rental Report was out on Monday. So, the day the story broke, I was in Daft HQ and was able to find out the real story. For me, it is a salutary lesson on the curse of good intentions.

Actually, I had been aware that Daft.ie was working with the DSP. In early April, the unit responsible for Rent Allowance got in touch with me originally about this and I passed them on to Daft.ie. Over the following few weeks, Daft and the DSP worked through a plan and in late April, the filter was removed on a trial basis. The trial was supposed to last a week – but collapsed after just two days due to overwhelming user feedback. The users who complained were – wait for it – those in receipt of Rent Allowance. They were joined by one of the country’s largest charities, who got in touch with Daft.ie, asking them to reinstate the filter.

To see why, put yourself in the shoes of someone on Rent Allowance. With the filter, you go to Daft, tick the box that says “Are you looking for places that accept Rent Allowance?” and (as of this morning) are given about 700 results for Dublin city. If you follow up on any of these ads, there is no question of being turned away because you are on Rent Allowance. If that box is taken away, you would be given all 1,800 rental properties in Dublin. This sounds like good news, but the true cost of the missing box is revealed when you start following up on these ads. Roughly speaking (based on today’s numbers), you have look three times as hard to find a property that will even consider you. And time has a cost, whether you’re on Rent Allowance or not.

The removal of the filter – while no doubt well-intentioned by all concerned – actually made matters worse for the very people everyone is trying to help. Much as with rent caps, which I discussed earlier in the week, hiding what you don’t want to see will not address the underlying causes. So, why are landlords so keen to discriminate against Rent Allowance recipients?

Note that in Dublin, where rents are rising at almost 15% year on year, roughly two thirds of landlords currently will not consider someone on Rent Allowance. In contrast, if you were to search in Donegal, where rents are actually still in decline, almost all landlords would accept someone on Rent Allowance (190 out of 230, based on this morning’s numbers). While this story started out with a technical issue, namely a button on a website, the underlying issue is economic and inextricably linked with Monday’s Daft Report and indeed the broader housing crisis: a lack of supply. The tighter supply is, the more picky landlords can be. For example, I know of houses in Dublin currently where landlords are able to say “no, I don’t want three 20-something professionals renting here, I want a family”. No landlord in Dublin would have been that choosy in 2009, when rents were collapsing.

We could of course simply make it illegal for landlords to discriminate on the basis of Rent Allowance, being a 20-something professional or any other criteria we don’t like. But again, that doesn’t address the underlying issue and merely pushes the problem out of view. If those of us who do not have to depend on Rent Allowance want to help those who do, hiding the problem will not make it go away. To assuage our “middle class guilt”, for want of a better term, we need to look at the underlying issue of a lack of supply. And for that, as I argued on Monday, we need to look in particular at how the government controls planning and land use. Hopefully Deputy Ó Ríordáin will be to the forefront in calling for land use and planning reform – I’m more than happy to share my thoughts with him.