Dáil Éireann Debate, Tuesday - 28 September 2021
133. Deputy Richard Boyd Barrett asked the Minister for Housing, Local Government and Heritage if he will consider effective rent controls that will both reduce rents and maintain them at an affordable level in view of the failure of the rent pressure zones to make rents affordable; and if he will make a statement on the matter. [46414/21]
View answer171. Deputy Ged Nash asked the Minister for Housing, Local Government and Heritage his views on the need to make the entire State a rent pressure zone and introduce a three year rent freeze in view of a recent rise of inflation; and if he will make a statement on the matter. [46465/21]
View answerI propose to take Questions Nos. 133 and 171 together.
The Planning and Development (Housing) and Residential Tenancies Act 2016 introduced the Rent Predictability Measure to moderate rent increases in those parts of the country where rents are highest and rising fastest. The introduction of the rent increase restriction of 4% in Rent Pressure Zones (RPZs) had regard to the constitutionally protected property rights of landlords and takes account of local rental market factors, providing certainty to tenants and landlords with regard to medium-term rent levels.
The Residential Tenancies (No. 2) Act 2021 introduced measures in July 2021 to better protect tenants with affordability challenges by extending the operation of RPZs until the end of 2024 and prohibiting any necessary rent increase in a RPZ from exceeding general inflation, as recorded by the Harmonised Index of Consumer Prices (HICP). This measure significantly reduces the level of permissible rent increases for the estimated 74% of all tenancies which are in RPZs. The linkage with HICP aims to safeguard continued investment in the sector by existing and new landlords to deliver the much needed supply of high-quality rental accommodation while protecting against a significant increase in rental inflation in the coming years.
When bringing forward this legislation, the need to carefully monitor inflation was recognised. At that time, HICP inflation averaged 0.73% p.a. over the previous 3 years but had risen to 1.6% p.a. in the year ending June 2021. Given the continuing rise in HICP inflation, up to 3% p.a. in August, I intend to bring forward the Housing and Residential Tenancies Bill 2021 to undergo pre legislative scrutiny by the end of this Dáil term, which will re-examine the operation of RPZs to ensure that effective rent controls are in place while new supply of rental accommodation comes on stream.
The Residential Tenancies (No. 2) Act 2021 also provides that rent reviews outside of RPZs can, until 2025, occur no more frequently than bi-annually. It remains the position that rent reviews in RPZs can occur no more frequently than annually. The most vulnerable tenants, impacted by Covid-19, also continue to be legally protected from rent increases and eviction under the Planning and Development, and Residential Tenancies, Act 2020.
Having regard to the constitutionally protected property rights of landlords, a blanket extension of the RPZ rent predictability measure to rental properties across the entire country or a three year rent freeze, is considered legally questionable and highly vulnerable to legal challenge. The Housing Agency continually monitors the rental market and may recommend further areas with the highest and fastest growing rent to be designated as RPZs.
