Overhaul of Rent Pressure Zone rules ‘will only lead to more homelessness and evictions,' say critics

Irish Independent

4 hours ago

The Government's latest move to ease the housing crisis looks set to face strong resistance, with opposition parties and some homelessness groups already voicing concerns.
Ministers will meet tomorrow to ­consider a raft of changes to RPZs, but already they are facing a backlash.
Under the proposals, landlords will be able to significantly hike rents beyond current caps to market rates in between tenancies of at least six years under new proposals intended to bring increased institutional investment in the private rental sector.
It is expected that Rent Pressure Zone (RPZ) limits on annual rent increases of 2pc or the rate of inflation will remain but will not apply to newly built apartments, while 'no fault' evictions may be restricted for the first six years of a tenancy.
Landlords will be able to 'reset' rents after six years to market rates under plans that have been described as 'disastrous' and 'outrageous' by the opposition.
However, Sinn Féin housing spokesperson Eoin Ó Broin said the Government had failed to spot a 'loophole' in the new measures that could put tens of thousands of existing renters at risk of eviction.
A landlord can evict a tenant in a Part 4 tenancy, which lasts up to six years, only on the grounds of sale, use by the landlord or family member, substantial refurbishment or a breach of contract during that period.
A landlord could have evicted a tenant for any reason at the end of these six years until former housing minister Darragh O'Brien changed the legislation in mid-2022. But that clause remains in place for tenancies that predate the change.
Mr Ó Broin claims the new measures could become 'a completely legal incentive' for landlords to evict tenants in order to charge full market rent.
'If you allow landlords to reset rent and existing rental properties at the new market rent, the Government will be creating a huge incentive for landlords of pre-June 2022 tenancy agreements to utilise that provision at the end of the six years in order to get the tenant out and a new tenant in at full market value,' Mr Ó Broin said.
'Each year from now until 2028, a whole chunk of Part 4 tenancies from before 2022 will arrive at their six-year end point,' he added.
'What the Government is essentially doing without realising it, in my view, is basically giving a landlord whose ­tenancy agreement with their tenant comes to the end of the six years a completely ­legal method to evict that tenant for no reason whatsoever to avail then of full market rent for the new tenant.
'I think that's going to put tens of thousands of renters in that situation at very serious risk. Not all landlords will do it. But given that for many landlords, the gap between what they're charging and what they could get will be very great, that's a very, very significant incentive.'
The TD said the proposals will also lead to 'huge increase for renters as they move from rental property to another'.
'This is far worse than I was expecting from government, and I think the big losers here are renters across a range of categories, who are going to face ­greater levels of rent at a time when rents are already too high, but also greater levels of eviction, particularly those in existing tenancies that were created before 2022.'
While the plans may aim to bring new institutional investment into the private rental sector, Mr Ó Broin said it was more likely that the measures would be 'punishing renters for very little return in terms of additional stock and the additional stock they get will be exceptionally expensive'.
Evicted tenants may also be at increased risk of homelessness as a result, with Mr Ó Broin describing the new plans as 'badly designed' and a 'disastrous move' for renters.
Social Democrats TD Rory Hearne said lifting the rent cap between tenancies and on new-build rentals would be an 'outrageous' and 'cruel decision' that would be 'throwing young generations to the vulture-fund landlords – making them pay for government housing failures'.
'Lifting rent caps will lead to increased evictions and homelessness as landlords evict tenants to get a new tenancy and bring the rent up to market rents,' Mr Hearne added.
Threshold CEO John Mark McCafferty has warned that any dilution of rental protections could 'push more renters into financial distress and, arguably, homelessness'.
My concern is around the country, where there's nothing going to be built
He told RTÉ's This Week that RPZs should be continued until a 'comprehensive stepdown plan is put in place'.
Irish Property Owners Association (IPOA) chair Mary Conway said that while it was positive to see an incentive to build new rental apartments, small landlords outside Dublin, 'who have been on very low rents and barely surviving' would have hoped for measures that would allow them 'to bring the rent up a little bit over a period of time, or be able to reset the rent when tenants left'.
'We would hope that would happen, that they would still agree that if a long-term tenant left, or a property was going to be sent to market, that a new rent could be set,' she said.
'My concern is around the country, where there's nothing going to be built and you have small landlords in Leitrim, Sligo, Roscommon or wherever, if they leave the market now, there's no landlords down there now to replace them.'
Ms Conway said the claims put forward by the Opposition that the proposed changes would increase homelessness is 'a knee-jerk reaction'.
She expects legislation would be put in place that would protect renters and stop landlords evicting a tenant to bring in another at a higher market rent.
In response to queries, a ­spokesperson from the Department of Housing said: 'The Housing Agency was commissioned to undertake a review of the current system of rent controls using Rent Pressure Zones. The department received this report on April 28, and [Housing] Minister [James] Browne will be bringing proposals to Government shortly.' Fionnán Sheahan: 'Trust us, we're the Government' stopped working after 2024's great housing bluff - Page 21