Enforcing Rent Pressure Zone legislation only way to stabilise rental market in absence of new builds
Tuesday, 14th November, 2017
Enforcing RPZ legislation only way to stabilise rental market in absence of new builds
National housing charity, Threshold has said that Rent Pressure Zone legislation needs to be properly enforced if it is to be effective in stabilising the rental market in Ireland while the country awaits large-scale new builds. Chief Executive John-Mark McCafferty was responding to today’s (14.11.17) Daft.ie Rental Price Report, which covers the third quarter of 2017. The report indicates an 11.2 per cent increase in rents nationally, once again pushing rents to an all-time high of €1,200. However, the report shows an easing in the annual rate of rental inflation, from 13.4 per cent at the start of 2017 to 11.2 per cent now.
Commenting, Mr McCafferty said: “While it is not good that rents continue to rise, it is reassuring to see that the rate of inflation is starting to drop. This is a remarkable achievement in a market of limited supply, which, we believe, is down to Rent Pressure Zones beginning to make an impact. This trend was also seen in the Residential Tenancies Board Rental Index Report in Q2 2017. Rent Pressure Zones have provided much needed relief to many tenants who were facing unsustainable rent increases and possible homelessness.
“Fear of homelessness is a real issue for many of Ireland’s renters – of the more than 5,500 people who contacted Threshold’s Tenancy Protection Service so far this year, 43 per cent were querying rental terminations, while 19 per cent were about rent reviews and rent increases.
He added: “According to The Daft.ie report, there were only 3,365 properties available to rent nationwide on 1stNovember. While the development of large-scale housing projects is the only long-term solution to the housing crisis, it will take time to increase the supply of affordable homes for low- to middle-income tenants. Until supply can be significantly ramped up, we believe the best way to stabilise rent inflation is by robustly policing and enforcing the RPZ legislation. This, in turn, will help to stabilise the rental market. There is no excuse for the construction industry not to immediately start to build, as new developments are not covered by RPZ guidelines.”
Under the RPZ law, a new tenant can only be charged four per cent more than a previous tenant and the landlord must explain in writing to a new tenant the calculations behind the rent, as it relates to the RPZ formula. This legislation gives sitting tenants and those searching for accommodation equal rights. However, it is being flouted by some landlords.
Threshold chair, Dr Aideen Hayden said: “For every household that benefits from the rent certainty measures, contacts from our clients are showing that some landlords are finding ways to circumvent the legislation. We once again call on the Government to introduce a publicly accessible rent register, along the lines of the Property Price Register. This would provide potential and sitting tenants with the details they need to make informed choices or to challenge illegal rent increases at the Residential Tenancies Board.”
She added: “In this competitive market with such limited supply, tenants are hesitant to challenge rent increases at the RTB for fear of a relationship breakdown with the landlord.”
Threshold is also calling on Housing Minister, Eoghan Murphy to put a timeline on the introduction of a legal definition for “substantial renovations”, which is being used by some landlords as a reason to terminate tenancies or to increase rents beyond the RPZ limit.
Dr Hayden said: “Minister Murphy committed in September to the development of a definition of what constitutes ‘substantial refurbishment’ of a dwelling. Looking at the recent attempt at mass eviction on the grounds of ‘substantial renovation’ at St Helen’s Court in Dun Laoghaire, we are calling on the Minister to urgently introduce this legal definition to provide clarity to both tenants and landlords.”