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Housing Policy

Dáil Éireann Debate, Tuesday - 25 January 2022

Tuesday, 25 January 2022

Questions (88, 91)

Mick Barry

Question:

88. Deputy Mick Barry asked the Minister for Housing, Local Government and Heritage if his Department will assess the impact of buy-to-rent developments on the price of housing and rent levels; and if he will make a statement on the matter. [3334/22]

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Mick Barry

Question:

91. Deputy Mick Barry asked the Minister for Housing, Local Government and Heritage if he will consider introducing regulations to limit the development of buy-to-rent developments given their impact on the affordability of housing; and if he will make a statement on the matter. [3333/22]

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Written answers (Question to Housing)

I propose to take Questions Nos. 88 and 91 together.

The regulation of institutional investment is a matter for the Minister for Finance.

First and foremost the solution to alleviating pressures in the rental and housing markets is boosting supply across the board. Housing for All is the Government’s plan to increase the supply of housing to an average of 33,000 per year over the next decade. Over 300,000 new homes will be built by the end of 2030, including a projected 90,000 social homes, 36,000 affordable purchase homes and 18,000 cost rental homes.

The Plan is backed by historic levels of investment with in excess of €20bn through the Exchequer, the Land Development Agency and the Housing Finance Agency over the next 5 years. This will provide the sector with the stability and certainty it needs

Housing for All recognises that external sources of finance will be needed to bridge the gap between the overall funding requirement to build an average of 33,000 homes each year, and that provided via direct Exchequer funding, State borrowing, Home Building Finance Ireland and the domestic banking sector. Private finance and institutional investment has a role to play in supporting new supply, particularly in high density apartments that would otherwise not be built and it is important to recognise the positive effects that institutional investment can have in terms of increasing the supply of housing; bringing diversity of supply with experienced large scale management practices; and increased choice for tenants, which is important for the market and for renters.

It is essential that we achieve the balance between addressing the issue of multiple purchases by institutional investors, whilst at the same time ensuring that the supply of financing to the market is not undermined, particularly for the construction of new developments.

In this regard, the Government absolutely recognises the need for protections to prevent investment moving into other areas where viability and demand are not issues and that is why as a Government we moved quickly in May 2021 to introduce the stamp duty increase and to provide guidance to planning authorities.

Furthermore, in December 2021, legislation was enacted as part of the Planning and Development (Amendment) (Large-scale Residential Development) Act 2021 that sets out the requirement for a housing strategy to take into account the existing need and the likely future need for housing, in particular houses and duplexes, for purchase by intending owner occupiers.

To address the rent affordability challenges, building on foot of the unexpectedly fast rising inflation rate, as recorded by HICP (CSO data for December 2021 shows HICP inflation of 5.7% p.a.) the Residential Tenancies (Amendment) Act 2021 provides, from 11 December 2021, a cap of 2% per annum pro rata on rent increases in RPZs, where the inflation rate is higher. In effect, this will mean that rents in RPZs may only increase by a maximum of 2% per annum pro rata during times of higher inflation.

In all cases, section 19(1) of the Residential Tenancies Acts 2004-2021 prohibits the setting of a rent that exceeds market rent.

The RTB Rent Index is published quarterly and reveals the actual rents being paid for rented properties, as distinct from the asking rents which feature in other rent reports. It is compiled in conjunction with the Economic and Social Research Institute (ESRI). It is based on actual rents paid on private tenancies registered with the RTB in the quarter, which is made up of homes new to the rental sector, new tenancies in existing housing stock and renewals of existing tenancies. Rent Index publications from 2007 to Q3 2021 can be found on www.rtb.ie/data-hub/rent-index

In the Housing for All plan, both the State and the private market have an integral role to play in increasing the delivery of new homes. The measures brought in last year and the actions laid out in Housing for All will increase the supply of homes available for purchase and rent across the country.

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