Dáil Éireann Debate, Thursday - 19 February 2015
204. Deputy Terence Flanagan asked the Minister for the Environment, Community and Local Government his plans for a rent cap in view of rent prices soaring; and if he will make a statement on the matter. [7630/15]
Amharc ar fhreagraIn the third quarter of 2014, rents were 5.6% higher nationally than in the same quarter of 2013, according to the most recent rent index from the Private Residential Tenancies Board (PRTB). Rents for houses were 4.3% higher while apartment rents were 7.3% higher than in the same quarter of 2013. In Dublin, which is seeing the highest rates of increase nationally, overall rents were higher by 9.5% although the rate of annual increase was down slightly.
A report by DKM Economic Consultants, Rent Stability in the Private Rented Sector commissioned by the PRTB and published last autumn considered a number of options in relation to rent control, including a rent cap. A review of the literature for the report found that in every jurisdiction where it was introduced, a rent cap led to a reduction in the supply of rental units due to an increase in demand for the 'lower' priced units. As the main reason behind increasing rents is a shortfall in housing supply, caution must be exercised in relation to measures which, prima facie, would seem to offer a solution.
Fundamentally, the main cause of rising rents is a lack of supply in the market. The implementation of the range of actions under the Government's Construction 2020 Strategy will support increased supply in the wider housing market. New house completions in 2014 amounted to 11,016 units nationally, up 33% on the 2013 figure. Similarly, in the third quarter of 2014 planning permissions were granted for 2,144 dwelling units, compared with 1,409 units for the same period in 2013 - an increase of 52%.
In addition the recently published Social Housing Strategy 2020 sets out clear, measurably actions and targets to increase the supply of social housing, reform delivery arrangements and meet the housing needs of all households on the housing list. In 2015 we will provide over 7,000 new social housing units and a further 8,400 units will be secured under the HAP scheme.
The Government is monitoring the rental market closely and is considering policy options in relation to achieving greater rent certainty. The options put forward in the DKM report form part of these considerations.
