Latest news with #rentcaps
Irish Times
a day ago
- Business
- Irish Times
Tough decisions to tackle housing crisis are under way – but will they work?
The expected move to ease rent caps is part of a Government response to the worsening housing crisis which will see further policy changes announced in the coming weeks, before a revised plan for housing is finalised in July. Government insiders hope that the departures will show them finally getting to grips with the housing crisis. But it would be an exaggeration to say there is confidence that all this will work quickly to increase housing supply. Meanwhile, opposition to the rent cap changes is growing and will be heard both in the Dáil tomorrow and on the streets next week when Raise the Roof, an umbrella group co-ordinated by the trade unions and including NGOs and Opposition parties, holds a major protest outside Leinster House. The housing measures include some already announced and some yet to come. There will be changes in planning regulations to allow small residences in back gardens, extensions and attic conversion s without planning permission; potentially also changes in regulations on apartment construction; the role of the Land Development Agency will be expanded to include mixed-use developments with private sector partners; the appointment of a 'housing tsar' ( just don't call it that ) is also coming; commencing the changes in last year's mammoth planning Act will make it harder to block planning permissions; and money will be provided for new planners in local authorities and An Bord Pleanála to speed up the planning process. READ MORE [ Explainer: Garden rooms and attics – What are the proposed changes to regulations? Opens in new window ] Divisions remain in Government over the possibility of tax incentives for builders and developers of certain types of housing, and they are unlikely to be settled until the budget. But at the top level of Government, there is a growing sense that urgent action is needed on housing, with one insider insisting that the series of decisions now under way will place housing at the very centre of the Government's priorities from now until the summer recess in mid-July. However, there is also an awareness that some measures to increase supply will leave the Coalition open to political attack and public unpopularity. [ Proposed changes to rent rules will incentivise evictions, housing charity warns Opens in new window ] And the problem for the Government is that the unpopularity and the political attacks will be immediate – but any potential payback from the measures in the shape of increased supply is at best years away, and may not even be felt until after the next general election. Even without the planning delays and legal actions that they have to factor into their considerations, builders and developers say it can still take three to four years to deliver a block of apartments. There is no doubt the measures will be welcomed by developers and landlords. But that is not necessarily the same thing as prompting them to move quickly to increase supply. Many will want to see if tax incentives are introduced in the budget; others will want to see if the Government has the political will to resist the pressure already building on the rent pressure zone changes. 'Look, the reality is there is no silver bullet,' says one senior Government source. But, the source says, we need apartments, and the people who build apartments are not building them right now because of the rent caps. [ Rules for renters: What are the planned reforms and will they work? Opens in new window ] All very well, but the simple and logical outcome of changing the rent cap rules is that rents will go up – that's why the landlords and the developers are in favour of it. The Government says that its package will protect renters – but among groups working at the coalface of homelessness, there is little confidence in that. An uptick in evictions and rising rents – both predicted by Opposition parties – would pile enormous pressure on the Government. Within Government, there is an undoubted willingness to take difficult decisions, and an awareness that the time to take them is in the first year of its term of office. But that is not matched by any great confidence that the measures will work. [ Ireland's housing crisis: Why is there such a shortage of homes to buy and rent here? Opens in new window ]
BreakingNews.ie
2 days ago
- Business
- BreakingNews.ie
Rent pressure zones: What are they and why are there calls for reform?
The Government is examining whether to abolish Ireland's current system of rent caps. Rent pressure zones (RPZ) were introduced in 2016 to help control spiralling costs for tenants. Advertisement The regulations, which apply to certain areas of high demand for housing, are due to expire on December 31st. Here is everything you need to know about RPZs, and what the Government might do next. What are rent pressure zones? The RPZ system was introduced in 2016 to cap rent increases in areas where there is high demand for housing and rental homes. An area designated as an RPZ has annual rent increases capped at 2 per cent or at the rate of inflation, whichever is lower, even if there is a change of tenant. Advertisement However, not all rented properties in RPZs are subject to rent caps. Landlords can be exempt from the rent caps if the property has not been rented for a period of two years or if it has undergone a "substantial change in the nature of the accommodation". Where are rent pressure zones? RPZs now cover most of the country – 111 of the State's 166 local electoral areas are under the rent cap system. Many of the major towns and cities in the Republic are RPZs, along with touristic areas such as Killarney, Westport and Connemara. Castlebar in Co Mayo and Tullow in Co Carlow are the latest areas to become RPZs. Advertisement Why would the Government want to scrap rent pressure zones? There is concern within the Government that RPZs have negatively impacted the level of private investment in housing developments, amid increasing pressure to meet new-build targets. Fianna Fáil and Fine Gael are under increasing pressure to tackle the State's housing crisis after it emerged that 30,330 homes were built last year, far short of the projected 40,000 new builds put forward by the parties. The debate over RPZs also stems from a report by the Housing Commission that recommended a new form of rent control. The report published in May last year said landlords had been constrained by the RPZ regime and reported a lack of policy certainty and diminished net rental returns. Advertisement It also highlighted that tenants were still experiencing affordability challenges due to historically high rents, while those seeking to find rental accommodation were met with low availability. The commission said the evidence for the effectiveness of the RPZ system was "mixed", and suggested that rent regulation needs to be made fit for purpose for the longer term. The report said the Government should regulate market rents fairly and effectively by reforming current regulations and establishing 'reference rents'. This would replace RPZs with a system that pegs rent to local dwellings of a similar quality. Advertisement In the proposed new system, the reference rent rate would be reviewed at regular intervals and rent would not rise more than a certain percentage above this reference rent over a specific period. This rent regulation would continue to transfer between tenancies, so that if a tenancy ends the same regulations apply to the subsequent tenancy, discouraging the termination of tenancies purely to increase rental income. This new form of rent control would apply across the country, not just in specific zones. What proposals are the Government considering? The Government is now considering tying certain rents to the rate of inflation. Under the proposals, the current RPZ annual caps would not apply to new buildings constructed after a certain date and rents in the newbuilds would instead be linked to inflation. The proposal to get rid of the RPZ cap for newbuilds and tie the rent level to inflation is aimed at increasing private sector investment to deliver more housing. The current 2 per cent rent increase cap would remain in place for existing tenancies, though landlords would be able to change the rents between tenancies, which is currently not permitted. The changes to the RPZ system would be accompanied by enhanced protection for renters in relation to security of tenure amounting to a minimum of six years. There would be a restriction on no-fault evictions during this six-year period – a measure that will require legislation. The landlord would be allowed to reset the rent every six years to the market rate. When will the Government make its decision? Asked on Wednesday when a decision on the future of RPZs would be made, Taoiseach Micheál Martin told reporters: 'I would expect sometime in the next week.' The Taoiseach said the decision will be part of a number of steps towards increasing housing supply, including attracting institutional investors to the sector. 'There'll be further measures taken next week in relation to housing,' he said. 'It's not any one measure that is a silver bullet. It's the cumulative impact of all of them that will lead to an increase and an acceleration of timelines around getting housing units complete.' Coalition leaders are expected to consider the proposals for reforming the RPZ system when they meet on Monday in advance of a final decision on the plans due to be brought to Cabinet by Minister for Housing James Browne on Tuesday. What is the reaction from politicians, experts and industry? Opposition parties have widely criticised any proposals to phase out RPZs. Sinn Féin's housing spokesman Eoin Ó Broin said said any move by the Government "to allow landlords to increase the rent burden on tenants – a rent burden that is already far too high – will be strongly resisted." He said the proposed changes Sinn Féin would create a 'four-tier rental market', with different rent-setting and eviction rules for four types of tenants depending on whether or not they live in RPZs, when their tenancies begin, and when their homes were built. Social Democrats TD Rory Hearne said the housing crisis had deepened into a 'social catastrophe' and disaster'. He said his party would be 'actively and vociferously' opposing any attempt to remove rent caps. Lorcan Sirr, a housing lecturer at Technological University Dublin, criticised the suggested change to rental controls, telling The Irish Times that if stability was what the market needed, this in itself was 'policy flip-flopping'. Meanwhile, Eddie Byrne, chief executive of Irish Residential Properties REIT (IRES), which owns about 4,000 homes in Dublin and Cork, welcomed the Government's efforts for reforms that could boost the supply of rental properties while also protecting renters. Michelle Norris, director of the Geary Institute for Public Policy at UCD and member of the Housing Commission, said the majority of members in the commission agreed Government should regulate rents but that the RPZ system needed to be reformed so that there was stability in regulation and a move away from constant change. Ireland Rent pressure zones decision due within a week, sa... Read More The enforcement of any regulation was a key concern of the commission, Prof Norris told The Irish Times, as well as a move away from a 'flat' rate regulation of rent. 'Other European countries have rent regulations that are linked to a reference rent being charged for similar properties in that location that are of a similar quality and size.' John Mark McCafferty of housing charity Threshold said that without RPZs tenants would likely face substantial rent increases, pushing them into financial distress and 'even possible homelessness'. Irish Property Owners' Association chairwoman Mary Conway expressed concern at the potential for a 'two-tier market' with 'old rents versus new rents coming in'.
BreakingNews.ie
26-05-2025
- Politics
- BreakingNews.ie
Resistance to rent cap change would be like water charge campaign, Ó Broin says
Resistance to an easing of rent caps has been likened to opposition against water charges by Sinn Féin's housing spokesman. Eoin Ó Broin said the 'do-nothing Government is letting people down' as he called for emergency action on housing. Advertisement It comes after the four political parties involved in the 'Raise the Roof' housing campaign – Sinn Féin, Social Democrats, Labour and People Before Profit-Solidarity – announced a protest outside Leinster House next month. Raise the Roof, which is a trade union and civil society campaign, has been involved in several demonstrations since 2018. The next protest is scheduled from 6pm on June 17th and will coincide with a private member's motion on the housing crisis. At a joint media opportunity on Monday, Mr Ó Broin said: 'There is a growing anger and growing frustration at a Government that has completely abandoned communities, abandoned people in housing need, abandoned people in need of affordable childcare, abandoned people in need of vital supports for children with special needs or people accessing education or healthcare. Advertisement 'And at the centre of that is an ever-deepening housing crisis.' Asked how opposition parties would counter any move by the Government to reduce protections for tenants under Rent Pressure Zones, Mr O Broin said: 'Any move by Government to allow landlords to increase the rent burden on tenants – a rent burden that is already far too high – will be strongly resisted not just by our political parties here and the Raise the Roof movement, but I think by thousands and thousands of people. 'Industry is looking for the caps to be raised, they're looking for the caps to be waived in between tenancies, and they're also looking for the caps not to apply, not just to new rental stock but new rental stock over a period of time. 'The consequence of that will be – at a time when average rent is already over 2,000 euro a month – for rents to spiral ever upwards.' Advertisement He said that would be 'unacceptable' and added: 'Just as we've done in the past with the likes of Right to Water, we will put pressure inside the Oireachtas and without to force the Government to stand by renters and not heap extra pressure on them – and that will be one of the key actions on the 17th. Attempts to introduce metered water charges as part of the bailout programme were abandoned in 2017 after numerous mass protests. Social Democrats TD Rory Hearne said the housing crisis has deepened into a 'social catastrophe' and disaster'. He said his party would be 'actively and vociferously' opposing any attempt to remove rent caps. Advertisement Mr Hearne said: 'We need a change of direction and emergency action on building social and affordable housing on a huge scale.' Labour TD Marie Sherlock said there was a need for 'radical change' in housing delivery, adding: 'The level of despair out there is absolutely incredible; a degree of fatalism that housing will not be fixed in this country – and it has to be.' People Before Profit-Solidarity TD Paul Murphy said: 'In 2016, when we had the general election, you had just over 5,000 people in emergency accommodation. 'By the time of (the) 2020 general election, we were up to just over 10,000 people and by the time of the general election just gone, we were at about 15,000 people in emergency accommodation. Advertisement 'Over the course of that time, rents have doubled and house prices are at an all time high. (left to right) Paul Murphy of People Before Profit-Solidarity, Sinn Fein's Eoin O Broin, Social Democrats TD Rory Hearne and Labour TD Marie Sherlock. Photo: Niall Carson/PA. 'If we continue in the way we are going, by the time of the next general election we will have well over 20,000 people in emergency accommodation in this country, rents will have risen by another 40% or so – and house prices will be just so out of reach for ordinary people.' He added: 'We simply cannot wait until the next general election, we know what direction that this Government is pointing in: It is a government for landlords, by landlords – and for developers.' Mr Murphy, who was involved in the protests against water charges, called for the declaration of a housing emergency and added: 'We need to act. That means pivoting away from reliance on the private sector, reliance on the market to deliver housing and instead for a much, much greater role of the State.' Asked for details of what would be included in the motion, the representatives said that would be announced at a later date.
Irish Times
22-05-2025
- Business
- Irish Times
Hitting target of 41,000 homes to be built this year will be ‘challenging', Minister for Housing admits
James Browne has conceded it will be 'challenging' to reach the housing output targets of 41,000 this year. Speaking in Dublin on Thursday, the Minister for Housing confirmed he intended to bring a plan to reform rent caps to Coalition leaders next Monday in advance of a likely Cabinet decision on the issue next week. Asked about housing completions, which are low in the first three months of the year, he said the target for this year of 41,000 'was always going to be very challenging there is no question about that'. 'What we have is a situation where we have to accelerate supply. Whether it's 41,000 or the target of 60,000 that we have to get to [over the lifetime of the Housing for All plan], we have to do some radical steps to make sure we get this very significant acceleration of housing supply.' READ MORE He said there had to be greater investment from the private sector and international finance to get to the required level. Mr Browne, who was speaking at the sod-turning ceremony for a social housing project in Cabra, said he had a report from the housing agency on the future of the Rent Pressure Zones (RPZs). 'What I want to do is ensure fairness in any decision that is made,' he said. The Opposition has accused the Government of wanting to strip away protections offered to tenants by the rules, which limit rent increases in areas of rapid inflation to 2 per cent annually. The rules are due to expire at the end of the year. Mr Browne has received a report which outlined how the rules could be extended in duration, scrapped entirely or varied – perhaps with a higher level of annual increase allowed to landlords. 'Renters are feeling somewhat frustrated and I want to allay those frustrations as quickly as possible,' he said. The target under the Government's housing for all plan for 2025 is 41,000. He also said he was 'very disappointed' to see that a row of houses owned by the Construction Industry Federation (CIF), which represents builders, had collapsed in Ranelagh, Dublin, last week. He said it was 'completely unacceptable' to see dereliction and he said there was a need for greater leadership from the CIF.
