Galway city manager Leonard Cleary has still not decided on a proposed rent increase for council house tenants which received widespread criticism from local politicians when first mooted in June.
In an email seen by the Advertiser, sent to senior officials and city councillors this week, the local authority’s chief executive said he is still reflecting on his decision, but reminded all recipients that levying a Differential Rent Scheme rate was an executive function, not subject to a vote by elected members.
In June, Cleary floated a 3 per cent increase, from 17 per cent to 20 per cent, of assessable income, to be paid as rent by the city’s 2,500 social housing tenants. He suggested abolishing a €5 per week discount for pensioners, parents and people with a disability.
Officials calculate this would bring in an extra €1.6 million in annual revenue for Galway City Council, which is currently owed around €2.8 million in rent arrears.
The proposals were vehemently opposed by councillors across all parties in City Hall, prompting Cleary to delay his decision, and chew over a number of suggestions designed to ameliorate the impact of rent hikes on vulnerable tenants.
“I committed to reflect during the subsequent period on the amendments suggested by Elected Members, and to calculate the cost of these amendments. I also committed to consider the approach to any hardship for tenants,” Cleary wrote to 18 city councillors and seven senior officials on Tuesday.
In a number of calculations set out in his email, Cleary explained that the council is expected to take in just over €10m in rent in 2025, but his proposals would increase that figure to just under €11.7m. Back in June, councillors heard annual rental income was €4.4m per year since 2019, but that the current housing maintenance bill is €13.4m.
Cleary calculates that if the €5 discounts are retained, as requested by councillors, this would reduce rent hike gains by an estimated €964,000.
Another suggestion was to stagger the 3 per cent raise over two years. In response this week, Cleary suggests such a phasing would deprive the council of over €800,000 income per year.
Social housing tenants are not charged Local Property Tax (LPT ) and this income is ring fenced to fund almost 1,000 council services.
“[It]would not be reasonable to re-allocate Commercial Rates collected from local businesses towards housing repairs and services,” Cleary asserts in his email.
“As I continue to reflect on the proposed new Differential Rent Scheme for Social Housing Tenancies, I need to work towards a decision as to whether or not it is acceptable to reduce housing repairs and housing services by the amounts proposed in the suggested amendments. A key factor is the negative impact on households/families of such a reduced housing service,” he wrote.
After a six-year period of no rent increases, and conscious of any “risk of hardship” Cleary told email recipients he will decide on rents “shortly”.
