Judith Bellmunt reports on the Taoiseach’s proposal to reform the system of Rent Pressure Zones which have been in place since December 2016, and some of the resistance to such changes.
On Sunday 9 February, Taoiseach Micheál Martin said the Government would examine Rental Pressure Zones (RPZs), which expire in December. RPZs are designated areas where rent cannot be increased by more than 2%, or the general inflation, if lower, each year. The Residential Tenancies Board (RTB) announced that landlords who violated the cap could be fined up to €15,000. This follows reports that up to 16,000 landlords were not complying with limits established by the RPZs.
Mr. Martin wants to reconsider the reimplementation of RPZs to provide for both renters and investors in the housing market. The OECD claims that although RPZs have provided “some rent stabilisation effects”, because of rising inflation “the cap is likely below the cost of maintenance and upkeep of property and might have driven landlords to sell”. A suggested option instead of RPZs is the referential rent system, where rent increases to the rates charged for comparable properties in the same area.
Aside from revising whether to maintain RPZs or not, the Taoiseach spoke about getting more investment from the private sector, arguing there has already been “an extra billion allocated towards the end of the year to housing in light of expenditures” by the state. He has also spoken about using brownfield sites for housing; previously developed lands currently not in use anymore.
This has been met with significant opposition from tenants who are worried the abolition of RPZs will increase rent prices. Eoin Ó Broin, Sinn Féin’s housing spokesperson, says it has caused “real concern” amongst renters, and states he has been “inundated with emails and with phone calls”. He argues “the consequence of such a move would be even more dramatic increases in rents than we have seen in recent years.”
The Taoiseach replied that he is “not responsible for all the noise” that has emerged. “I never used the phrase ‘to end’ or ‘abolish’, or ‘scrap’, for that matter”, but rather that it was open to revision. He also said that if alternative systems were implemented he would “protect renters”, and ensure people have a good environment in which to invest. The OECD states that Ireland should allow rents to be re-set between tenancies and adjusted for inflation during a residency. Nevertheless, they argue that care should be taken so that it does not lead to unfair termination of contracts.
The target for new housing units for 2024 was 40,000, of which 30,330 homes were built. Currently, the target is 50,500 homes a year on average between 2025 and 2030. Housing minister James Brown says “we want to increase supply, that is the best way to get rents under control and even to get rents to start to come back down again.”