Taoiseach says decision on whether to scrap rent caps expected in next week
A DECISION ON whether the Government will scrap or retain Rent Pressure Zones (RPZs) is expected in the next week, Taoiseach Micheál Martin has said.
The Taoiseach
caused panic earlier this year
when he said the Government was considering getting rid of the intervention which limits how much landlords can increase rent for properties in certain areas.
The Government has been assessing whether an alternative system, which protects renters but, as the Taoiseach has said, 'also enables people to have a clear, stable environment in which to invest', can be established.
It is understood that the new plan will form part of the Government's new housing plan, which is set to be published by July.
Senior sources have told
The Journal
that it is likely that there will be no cliff edge or sudden rent increases for tenants currently in tenancies.
However, landlords may be given the right to reset rents between tenancies.
RPZs are in parts of the country where rents are highest and rising, and where households have the greatest difficulty finding affordable accommodation.
Rents in an RPZ cannot be increased by more than the general rate of inflation or 2% per year, whichever is lower.
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They were first introduced in Dublin and Cork in 2016 for a period of three years, but RPZs have since been expanded across the country.
They were to remain in place until 31 December 2024 but last May,
the Government agreed to extend them until 31 December 2025
.
Replacing the use of RPZs was a recommendation of a
landmark report by the Housing Commission last year.
This was because it said the available evidence about the effectiveness of RPZ is 'mixed'.
The Housing Commission recommended that a system of 'reference rents' be established in its place.
The system of 'reference rents' would peg rent increases to a reference rent for local dwellings of similar quality.
The Housing Commission said such a reference should be reviewed at regular intervals.
'Rent would not rise more than a certain percentage above this reference rent over a specific period,' noted the Housing Commission.
It added that unsubsidised market rental dwellings should solely inform reference rents and that the percentage rent increase allowed should take account of relevant factors such as 'management and maintenance costs, interest rates, household incomes and affordability'.
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