The Irish government is reviewing its rent control policies, with a possible shift away from Rent Pressure Zones (RPZs). The aim is to attract more private investment in the rental market.
Taoiseach Micheál Martin has argued that a more stable policy environment is needed to encourage private investment in the rental market. Dermot O’Leary of Goodbody Stockbrokers says in order to increase the supply of housing by the amount required under new targets, Ireland “needs to be able to attract foreign capital”.
“At the moment, one of the constraints to that investment coming into Ireland is the strictness of the rent control regime in Ireland relative to other jurisdictions,” he adds. The Housing Commission report, published last year, said RPZs were always envisaged as a temporary measure and are no longer fit for purpose seven years later. It found that noncompliance with RPZ regulations is an issue, and that sanctions to tackle this are not being used to the full effect. The report also found landlords may not continue to invest in a property if they feel the rental return is not sufficient. It also suggested that the RPZ system created a two-tier rental market where existing tenants enjoy lower rents while those seeking a new tenancy are faced with significantly higher rents. One of the options being considered is the reference rent system. It would apply nationwide rather than just in certain zones, and the rate set as the reference rent would be informed by Residential Tenancies Board data on the size and type of local homes. This form of rent control would apply between tenancies, so a landlord could not increase the rent by more than the controlled amount when a new tenancy begins. It does seem possible that in some areas the reference rent rate could be higher than the current rent charged for certain tenancies. Lorcan Sirr, housing lecturer at Technological University Dublin, says he “cannot see rents for the majority of tenants coming down” under any new system. If the purpose of changing the regulations is to attract more private investment, the logic would follow that rents would increase to allow for this. However, one option for the Government would be to maintain tighter controls of those currently in tenancies so there is no sudden change to what they are paying
RENTCONTROL HOUSINGMARKET PRIVATEINVESTMENT IRELAND RENTPRESSUREZONES REFERENCE RENT TENANCY
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