Tuesday, 9 April 2019

Questions (637)

Willie O'Dea

Question:

637. Deputy Willie O'Dea asked the Minister for Housing, Planning and Local Government the reason the rent pressure zone in the eastern part of Limerick city has not been extended to other parts of Limerick; if the matter is being given consideration; and if he will make a statement on the matter. [16624/19]

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Written answers (Question to Housing)

The Strategy for the Rental Sector, published in December 2016, introduced the Rent Predictability Measure to moderate rent increases in those parts of the country where rents are highest and rising, resulting in great difficulty for households finding affordable accommodation.  In Rent Pressure Zones (RPZs), rents can only increase by a maximum of 4% annually. The measure applies to new and existing tenancies, when rents are set at the start of a tenancy and when rents are set in a rent review during an ongoing tenancy or new tenancy, unless otherwise exempted.

 Section 24A of the Residential Tenancies Act 2004, as amended, provides that the Housing Agency, in consultation with housing authorities, may make a proposal to the Minister that an area should be considered for designation as a Rent Pressure Zone.  Following receipt of such a proposal, the Minister requests the Director of the Residential Tenancies Board (RTB) to conduct an assessment of the area to establish whether or not it meets the criteria for designation and to report to the Minister on whether the area should be designated as a Rent Pressure Zone. For the purpose of the Act, ‘area’ is defined as either the administrative area of a housing authority or a local electoral area within the meaning of section 2 of the Local Government Act 2001.

For an area to be designated a Rent Pressure Zone, it must satisfy the following criteria set out in section 24A(4) of the Residential Tenancies Act 2004 (as inserted by section 36 of the Planning and Development (Housing) and Residential Tenancies Act 2016):

(i) the annual rate of rent inflation in the area must have been 7% or more in four of the last six quarters; and

(ii) the average rent for tenancies registered in the area with the RTB in the last quarter must be above the average national rent (the National Standardised Rent in the RTB’s Rent Index Report) in the last quarter (€1,134 per month in Q4 2018).

The RTB Rent Index Report includes a summary in Table 9 of the data used to establish whether each Local Electoral Area fulfils the criteria for designation as a Rent Pressure Zone. This ensures transparency in relation to the position of individual areas in terms of average rent levels and increases.

Further information on Rent Pressure Zones and designations is available on my Department's website at https://www.housing.gov.ie/PUBLICATIONS, by searching 'rent pressure zones - information'.

The most recent average national rent available for this purpose is taken from the Q4 2018 RTB Rent Index Report which records an average national rent of €1,134. 

Five of the six Local Electoral Areas (LEA’s) in Limerick do not currently fulfil the RPZ designation criteria under the legislation as the average rent in each is below the National Standardised Rent of €1,134. Limerick City East does satisfy the criteria and, accordingly, on 27 March 2019, I announced the designation of that area as a Rent Pressure Zone with effect from 28 March 2019.

The data from the Q4 2018 Rent Index Report relating to the six LEA’s located in Limerick is set out in the following table.

 

Local   Electoral   Area  

Quarters > 7%

Average 2018 Q4 (€)

Newcastle West

4

546.25

Adare – Rathkeale

*

*

Cappamore – Killmallock

3

723.50

Limerick City West

4

1054.14

Limerick City North

4

961.11

Limerick City East

6

1134.45

Notes: * indicates that rents in areas with less than 30 observations are not published for statistical reasons.

The Housing Agency continues to monitor the market with a view to making recommendations for further areas to be considered for designation as rent pressure zones, as required. Following the recent designation of Limerick City East and Navan, over 55% of tenancies nationally are now located in rent pressure zones.