State proposes purchasing homes of tenants and renting them back in response to eviction controversy

The debate surrounding eviction amid the pandemic has been ongoing, and many governments worldwide are implementing various measures to curb the situation. Among such measures is a new scheme that allows the state to purchase tenants’ homes and rent them back to the same tenants. While some individuals see this as a way to provide secure accommodation, there are concerns about the state’s involvement in the housing market and the financial implications for the tenants. This article will explore this new scheme and its potential impact on the housing crisis that has been exacerbated by the COVID-19 pandemic.

The Irish Government has announced plans for a new scheme that will see local authorities and housing bodies able to purchase a tenant’s home and rent it back to them. The scheme, known as the ‘cost-rental backstop’, is aimed at offsetting the impact of the eviction ban ending. The Cabinet has agreed to put the scheme in place by April 1, along with measures being agreed to mitigate against the worst impacts of the ban expiring. Green Party leader, Eamon Ryan, has caused some confusion by incorrectly claiming that another part of the Government’s plan – to give tenants first refusal to buy the property they are renting should their landlord want to sell – would also be in place by April 1.

There are warnings from housing groups and the opposition that thousands could face eviction and homelessness in the coming weeks. The Dáil will debate a Sinn Féin motion to extend the eviction ban until next year later today. Ryan has said that the “protection of tenants” is central to the Government’s counter-motion which seeks to “provide a safety net for renters”. The Environment Minister stated that the aim of the new scheme is to introduce measures that increase and improve tenants’ rights, avoiding a gap as the eviction ban is unwound.

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The Government’s counter-motion sets out that for renters in receipt of State supports such as housing assistance payment, councils can purchase their home and make it available to them as social housing as part of an expanded “tenant-in-situ” scheme. For those not in receipt of supports but facing eviction, their local housing body or council can purchase their home and rent it to them on a “cost rental” or not-for-profit basis. A third element of the Government’s plan is to give tenants in a position to purchase their home first refusal to buy the property, including using the option of using the State-backed shared equity scheme of up to 30% of the price of the property or to apply for a local authority home loan.

However, Ryan incorrectly claimed in response to questions that this ‘first refusal’ option would be in place “on an administrative basis” from April 1. His office later clarified the ‘first refusal’ option will take longer, requiring legislative change and will not be introduced by April 1, with no timeline currently specified. The Irish Green Party leader refused to comment on the possible sanction against party member Neasa Hourigan, who voted against the Government for the second time in less than a year. Ryan stated that the matter would be discussed at a parliamentary party meeting following the vote on the motion.

Ryan also announced the introduction of a new windfall tax on energy companies. The tax will include a cap on renewable energy companies’ revenues from the end of December last year to June of this year, set at €120 per tonne. There will also be a solidarity contribution of 75% from fossil fuel companies, including the Corrib Gas Field and Whitegate Oil Refinery, for 2022 and 2023. Ryan explained that revenues from the new tax will be lower than expected, in the range of €280 million to €600 million, with the money being recycled to help households with electricity bills and on the solidarity contribution to help businesses make the transition to clean energy. However, Ryan would not commit to introducing another €200 electricity credit for all households later this year, stating that the revenue from the cap may not be able to fund the credit which would cost nearly €400 million.

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As we continue to face the global pandemic, the Irish Government’s efforts to protect tenants in the country are commendable, introducing a scheme that will protect many and give them more rights to their homes. However, more assistance may be needed as the country continues to tackle the pandemic, and officials should continue to work towards implementing these measures as soon as possible.

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