Dáil Éireann Debate, Thursday - 11 November 2021
50. Deputy Pearse Doherty asked the Minister for Housing, Local Government and Heritage if he will consider immediate measures to support renters in the private rental market including a ban on rent increases; and if he will make a statement on the matter. [54426/21]
Amharc ar fhreagra63. Deputy Richard Boyd Barrett asked the Minister for Housing, Local Government and Heritage if he will consider proper rent controls that would see rent pegged to average incomes and set by a rent authority considering the constant increase of rents despite RPZ legislation and amendments to same; and if he will make a statement on the matter. [55037/21]
Amharc ar fhreagraI propose to take Questions Nos. 50 and 63 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. A rent increase limit of 4% per annum initially applied in Rent Pressure Zones (RPZs) . The introduction of the rent increase restriction in 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.
Section 24A of the Residential Tenancies Acts 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 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 (RPZ).
The criteria to be satisfied by an area under section 24A(4) of the Residential Tenancies Act for designation as an RPZ are as follows:
- the information relating to the area, as determined by reference to the information used to compile each RTB Rent Index quarterly report, shows that the annual rate of increase in the average amount of rent for that area is more than 7% in each of at least 4 of the 6 quarters preceding the period immediately prior to the date of the Housing Agency's proposal, and
- the average rent for the area in the last quarter, as determined by reference to the information used to compile each RTB Rent Index quarterly report, is –
- in the case of counties Kildare, Meath and Wicklow or an LEA in any one of those counties, above the average rent in the State, excluding rents in the 4 Dublin Local Authority areas, or
- in the case of any LEA outside of the Greater Dublin Area (i.e. Dublin, Kildare, Meath and Wicklow), above the average rent in the State, excluding rents in the Greater Dublin Area.
Each RTB quarterly 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.
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 ban on rent increases is considered legally questionable and highly vulnerable to legal challenge. The Housing Agency and the RTB will continue to monitor national rents and if any LEA meets the designation criteria it will be designated as a RPZ.
The Residential Tenancies (No. 2) Act 2021 introduced measures in July 2021 to better protect tenants with affordability challenges by extending the operation of Rent Pressure Zones (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).
When introducing these measures, I was very clear on the need to carefully monitor inflation. 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. I needed to revise the RPZ rent control relatively quickly in July, on a basis that could be independently verified.
To address the rent affordability challenges building on foot of the unexpectedly fast rising inflation rate, as recorded by HICP (CSO preliminary data for October 2021 shows HICP inflation of 5.1% p.a.), I have secured Government approval on 4 November to introduce a cap on rent increases in RPZs of no more than 2% per annum pro rata. In effect, this will mean that rents may only increase by HICP inflation or 2%, whichever is the lower. The Residential Tenancies (Amendment) Bill 2021 will be published shortly and is intended for priority enactment as soon as possible in December.
Since 1 July 2019, the RTB is empowered under Part 7A – Complaints, Investigations and Sanctions – of the Residential Tenancies Acts to investigate improper conduct by landlords and to impose sanctions, where appropriate. The breaches of rental law that the Investigations & Sanctions (I&S) unit of the RTB can investigate include a contravention of the rent increase restriction and related procedures in Rent Pressure Zones (RPZs). The RTB has the power to impose sanctions if improper conduct by a landlord is found to have occurred, ranging from a formal written caution and/or a fine of up to €15,000 and/or costs up to €15,000.
The Government is fully committed to ensuring that the full protections for tenants provided for in the Residential Tenancies Acts are applied. As of Quarter 2 2021, the RTB has commenced over 400 investigations into improper conducts and to date, almost €260,000 has been refunded to current and former tenants as a direct result of breach of rent setting rules.
I have formally requested the RTB to escalate its response to non-compliance with the RPZ rent increase restriction, given its extensive investigation and sanction capabilities. An increase of €2M in Current Exchequer Funding was made available to the RTB in 2020, bringing the total amount of funding available to the RTB for operational costs to €9M for 2020.
An additional €2M in Current Exchequer funding for RTB operational costs was secured in Budget 2021 bringing the total amount available to €11M in 2021.
