Government will have to shell out much more on rent subsidies after changes to rent controls, says housing advice charity

When changes to rent controls kick in, the government will have to hike the amount that it spends on rental subsidies if it is to avoid near-catastrophic levels of homelessness, a leading housing charity has said.  

The new regulation, phased in from next year, will lead to substantial increases in average rents over the next few years and make them unaffordable to many, says Gareth Redmond, research and policy officer with Threshold. 

“By the end of the six years, there may not be any rentals that are affordable for people on lower incomes,” he says. 

Government will have to widen the social housing net and provide rent subsidies such as the Housing Assistance Payment (HAP) to households that are not currently eligible, he says. 

Also, “HAP rates will need to be massively increased,” says Redmond.

National spending on all rent subsidies – HAP, the Rental Accommodation Scheme (RAS) and rent supplement – climbed steadily in recent years and is now around €700m, suggest figures from the Department of Housing and the Department of Social Protection. 

The hefty bill for short-term housing supports, such as HAP and rent allowance, was criticised in 2021 by the Oireachtas Committee on Public Accounts as bad value for money.

Past exchanges between the Department of Public Expenditure and Reform and the Department of Housing showed that the demands of the HAP budget were edging out other proposals. 

Yet, without an increase in spending on the subsidy, the growing unaffordability of rents will drive yet more people into homelessness, says Ber Grogan, the executive director of the Simon Communities of Ireland. “I’m very pessimistic for the future.”

The Department of Housing spokesperson said that the department plans to carry out a review of the HAP scheme, including the current rent limits. 

“It is expected this review, once complete, will mitigate a number of the affordability issues within the HAP scheme, and ensure sufficient support is provided for HAP tenants under the scheme,” he says. 

It plans to review HAP rates, they said, and to deliver 12,000 new social homes each year as well as more cost-rental homes. 

“As new build supply of social housing and cost rental ramps up, there will be reducing reliance on the HAP and RAS schemes,” said the spokesperson.  

They didn’t say how much extra it expects to spend on rent subsidies to keep up with the rent increases.

Waiting for the fall

Rent pressure zones – which at the time meant areas with a rent-increase cap of 4 percent – would be designated for three years maximum, said Minister for Housing, Fine Gael TD Simon Coveney in December 2016. 

“By which time new supply will have come on stream and pressures will have eased somewhat in these areas,” said Coveney, according to The Journal. 

Since then, the standardised average monthly rent for new and existing tenancies in Dublin has skyrocketed, from €1,449 a the end of 2016 to €2,177 by the end of 2024. 

The number of people in homeless accommodation in the capital has more than doubled from 5,258 at the end of 2016 to 11,567 in June 2025, show Department of Housing’s figures.  

As rents have risen, spending on HAP, RAS and rent supplement has gone up from around €450m in 2016 to almost €700m in 2024. 

When, in June, the current Minister for Housing, Fianna Fáil TD James Browne, announced significant changes and loosening of rent controls, he too said that increased supply would bring down rents eventually.  

“I expect rents to fall over time. What that particular length of time is, I won’t be able to predict,” said Browne, according to The Journal. 

Under the new rules, sitting tenants will have rent control protection in their current rental, but once they move out, the landlord can raise the rent on that home for new tenants.

For new tenancies, if the household remains in the tenancy, the landlord can raise the rent to the market rate at the end of six years. 

One of the aims is to stimulate investment and keep existing landlords in the sector, says a Department of Housing spokesperson. 

In June, Ann-Marie O’Reilly, national advocacy manager of the housing advice charity Threshold told a meeting of the  Oireachtas joint housing committee that she had been working in homeless services in 2016 when rent control came in. 

The main driver of homelessness at the time was that people simply couldn’t afford their rent, she said. 

That scenario is likely to reemerge, said O’Reilly, as rents increase to market rates. “As it is, there are people, particularly at the lower end of the market, who are struggling to pay.”

In 2024, 14 percent of renting households had missed a rent payment in the last year,  according to the Central Statistics Office’s Survey on Income and Living Conditions, a slight increase from 2022 and 2023.

HAP rates, meet rents

Despite the hefty government bill for rental subsidies, the vast majority of rentals are still too expensive for people on HAP, according to a Simon Communities of Ireland report, “Locked out of the Market”.

The homeless charity examined 16 areas in Ireland in June 2025. Just 3 percent of the homes available to rent on property website Daft were priced under the HAP limit, even with the maximum discretion.

HAP rates are different for each county and depend on the size of the household. Local authorities have discretion to spend up to 35 percent above the maximum rate, or up to 50 percent above if the household is homeless in the Dublin region. 

But for many, that is still not enough.

Keith Maguire says he has given up looking for rented accommodation because it is unaffordable and impossible to get.

“A lot of landlords don’t want HAP,” says Maguire, who has been homeless for six years, and stuck in homeless accommodation, unable to find a way out even with rent subsidies. 

“It's even worse now than when we were talking a couple of years ago,” said Maguire.

Back in 2022, Maguire was homeless, living in shared dorms in hostels and regularly applying for properties to rent through HAP, and going to any viewings he could get. 

He had focused his search on trying to get a room in a shared house, rather than his own apartment as he felt he had a better chance, he says. Still, he had no success.

Maguire says he has since moved to better homeless accommodation, run by the Salvation Army, where he has his own room, a wardrobe and a fridge and microwave. 

He has switched his focus to the council’s choice-based letting systems where he applies for permanent social homes. 

Maguire says he thinks that rent increases will make things much worse and that more people will become homeless. 

The problem is political, he says. “Owners shouldn’t be allowed to leave any property vacant,” he says, “the government should be clamping down on that.”

Grogan, executive director of the Simon Communities of Ireland, says that the unaffordability of rent is driving people into homelessness. 

Government needs to increase HAP rates, she says, and allow the highest rates for those who are at risk of homelessness. 

Still, the overall level of government spending on subsidies is worrying too, she says. 

Grogan says she was surprised by the new rental rules when they were launched. “My biggest concern was that there was nothing about the affordability of rents.” 

It seems to be accepted that rents will only increase going forward, she says. 

Any changes to security of tenure – of which there are some as part of the changes –  won’t help people on a state pension to pay rent in the private-rental sector, she says. 

There are already 260 older people in homeless accommodation nationwide, says Grogan, most of whom were never homeless before but can’t find private rentals that they can afford. 

At the end of 2024 there were 53,700 households in receipt of HAP, down from a peak of 60,700 at the end of 2021.

Tenancies turn over on average every four to five years, so Threshold predicts that in that time, most tenancies will reset to market rates, putting them out of the price range of many renters. 

If the tenant doesn’t move in the six years, they could face a massive increase in 2032, he says. 

“It's not one big cliff edge, but hundreds of thousands of cliff edges,” says Redmond. 

New-build social and cost-rental supply should ramp up, reducing reliance on RAS and HAP over time, he says. 

“However, while supply increases, the more immediate type of support available through the HAP and RAS schemes will still be needed,” he says.

If all goes to plan, Dublin City Council –  together with housing charities and private developers – is predicting it should deliver about 6,800 new social homes over the next few years, according to a council report issued in May 2025. 

The council also has plans for new cost-rental homes, with providers on site and building 1,140 of those, the report says.

Grogan says that it has taken the Department of Housing a long time to accept that it needs to raise HAP rates. 

While she welcomes the review, she doubts there will be another one for the foreseeable future after this, she says. 

Grogan expects homelessness to rise as rents increase further in the coming years, she says.