There was widespread condemnation amongst city councillors at their June meeting this week when officials revealed plans to raise €1m for the city by increasing rents by 3 per cent.
Councillors also expressed vehement disapproval of a similar cost-saving measure: abolishing a long-standing concession where council tenants receive a €5 weekly discount on rent for every child, pensioner or disabled person living in the home.
The proposals stem from a “Differential Rent Review” by council executives, who recommended that social housing tenants should pay 20 per cent of their weekly income in rent, up from the 17 per cent rate currently levied against assessable income.
Galway City Council has not raised rents for its 1,700 direct tenants or 1,300 indirect since 2019, according to officials.
Some social welfare payments and the minimum wage rates have increased marginally in the same period, although in-depth economic analyses by organisations such as Social Justice Ireland illustrate that basic wage and welfare rises have not matched inflation, cost of living increases, and other consumer price indices.
Councillors were informed by housing, finance and management officials that the City is currently owed €2.8 million in rent arrears. Rental revenue has been €4.4m per year since 2019, but the current housing maintenance bill is €13.4m, councillors heard.
City council chief executive, Leonard Cleary, told councillors that although he respected their mandates, motions passed this week attempting to dilute rent hikes were not binding, as setting the rate is an executive function of the local authority.
“As CEO I cannot ask [commercial] rates payers to pay for housing maintenance, and already private home owners are paying 15 per cent extra to be reinvested in the city. I’m asking our tenants to pay half a per cent extra per year – three per cent over six years – and there will be hardship clauses to help those in extreme difficulties,” he said.
Backlash
In response, Councillor Níall McNelis (Lab ) summed up his fellow councillors’ expectation of political backlash from constituents. “This is the third nail in the cross” he lamented, referring to criticism of councillors for raising rates and local property taxes recently to assist the cash-strapped local authority deliver essential services.
“This is another highlight of how badly Galway City Council is funded by government. Vulnerable people need to be minded, and I’ve never before seen how bad things are for families. Tenants in HAP-funded private homes [Housing Assistance Payment] are paying landlords extra, with under the table, cash top-ups, and they’re afraid to say anything, as the they’ll be given notice to quit.”
Councillor Mike Cubbard (Ind ) lambasted officials for proposing to remove the €5 per week discount from the most vulnerable children, pensioners and disabled. “This is the worst decision I’ve seen after 11 years as a councillor. More kids will fall below the poverty line, and parents will be forced to decide whether to feed themselves or their children.”
Councillor John McDonagh (Lab ) described the plan as Dickensian, while Councillor Mike Crowe (FF ) warned the move might proportionally penalise wage earners more than welfare recipients in some households.
Councillor Ebhlín Seoighthe (SD ) said she agreed with McNelis and Cubbard, and explained her personal experience as a single parent forced to handover cash to her HAP-funded landlord.
“If we are struggling to balance the books as a local authority, why are we not ‘at’ central government for more funding?” she asked.
Councillor Clodagh Higgins (FG ) directed her ire at councillors who recently refused to substantially increase Local Property Tax and Commercial Rates. “Those [increases] might have been unpalatable to some councillors, so now we’re looking at impacting the most vulnerable people because housing costs are astronomical,” she thundered. “Our council is still funded by central government as a Tier 5 authority – the lowest type – and this is an insult to our city.”
Housing Director Lieze Fannning promised councillors her staff would work to assist vulnerable renters, and that the vast majority of tenants can absorb the rent increases. She said council tenants paid up to seven times less than renters in the private sector.
