Housing Rental Assistance Stalls Out In Hot Markets. Even Warm Ones.

residential street in Galway, Ireland
Galway photo by Mohd Fazlin Mohd Effendy Ooi is licensed under CC BY 2.0
Hoping to rent with government subsidy in Galway? The subsidy is available. The housing's not.

In countries influenced by neo-liberalism, governments are dedicated to self-shrinking. Rather than constructing and “owning” public/social housing, rental assistance programs have become the order of the day for supporting low- and no- income citizens. The idea is to push the management of this vulnerable portion of the population onto the shoulders of free market landlords. (Presumably, this allows the landlords to profit from this relationship, since that’s the point of being a landlord.)

Whether implemented via vouchers (commonly known as section 8 vouchers in the USA), or “housing benefit” in the UK and Canada (sharing the name, but not the program details), or Housing Assistance Program (HAP) in Ireland, it’s really too bad these programs don’t work well, if at all.

The section 8 voucher program is notoriously underfunded, with only a fraction of those eligible winning competitions for vouchers. Adding to the misery, in many states landlords are free to ignore the program entirely.

But surely it’s unreasonable to suggest they don’t work at all?

Oh? Take Ireland’s HAP program. A recent article from Galway indicates that no properties in the city are available to rent under the HAP program for the fourth consecutive reporting period in a row. Free market housing? Oh yes, that’s available, but it’s not within HAP’s limits.

And there lies a fundamental flaw in rental assistance programs. Governments pay lip service to the wonder of the free market, but behave as if they are above it all by non-participation — seeking to impose limits on the free market arrangements between landlords and tenants.

The impact on government? None. They set aside a sum of money, and save some or all of it if nothing fits their self-imposed, free market limiting guidelines.

The impact on landlords? None, if they have pegged their rent, as they are perfectly entitled to do, above the government’s price limits.

The impact on tenants? If homeless, they remain so when, as in this Galway report. There is no price-limited housing to be had. But housing these tenants is the entire point of the exercise!

By attempting to have their free market cake but refusing to eat it, governments are reinforcing the only sane option to provide housing security for the most vulnerable: social/public housing. Read more in The Galway Advertiser: Farrell Not Surprised At Available HAP Rental Figures