Public Consultation Launched on Rent Controls; Closing date 30 June

Questions to consider

1. Having regard to the criteria used to determine whether an area can be designated a Rent Pressure Zone, as outlined on page 2, do you agree with these qualifying criteria? Would you like to see any changes or amendments to these criteria, and if so, what criteria should be used and why?

2. It is the case that, with Local Electoral Area boundaries cutting through some towns, it is possible that parts of a town may be designated as a Rent Pressure Zone while other parts are not. In the legislation, the ‘area’ that can be designated as a Rent Pressure Zone is defined as either the administrative area of a housing authority or a Local Electoral Area (within the meaning of section 2 of the Local Government Act 2001). There is no provision for any other type of area to be designated as a Rent Pressure Zone. The smaller the area, the more difficult it becomes to have a realistic calculation of an average rent for the area, because a small number of registrations can distort the overall picture.

While the use of LEAs is a significant step forward, it has taken significant effort by the RTB and the ESRI to develop a robust methodology for analysis at this level. While being mindful of the data requirements and the sample size needed to be able to designate, do you consider that the use of LEA-defined areas as appropriate or would you recommend another approach to delineating Rent Pressure Zones and, if so, what should that approach be?

3. It has been suggested that the RPZ measure penalises good landlords who have kept the rent below market rent levels. While a maximum rent increase of 4% is allowable after 24 months, there is provision for a 2% increase to be applied pro rata for the period since the last rent increase (i.e. a 6% increase would be permissible if the rent had not been increased for 3 years). Is there merit in considering an amendment that would allow for increases larger than this, where the rent for the property is considerably below market rent? What would you like to see as the qualifying criteria in such a situation?

4. Is the 4% limit on rent increases an appropriate level of permissible rent rises? Proposals to link the allowable increases to the Consumer Price Index (CPI) are frequently put forward. The Rent Predictability Measure limit is fixed and clear and gives certainty to landlords and tenants for a three-year period. The same certainly would not be possible with CPI – do you see any merits in linking rent increases instead with CPI?

5. The Rent Predictability Measure allows for exemptions to the rent increase limits for properties which are new to the rental market or which have been substantially refurbished. These exemptions, together with the short time-limited life-span of the measure (3 years), are intended to avoid negative impacts on the availability and supply of rental accommodation. Have these exemptions been effectively implemented? Do you consider that the measure has had a negative impact on the supply of rental accommodation?

6. Is the Rent Predictability Measure easily understood and transparently implemented? Like most legislation, the provisions and language set down in the Planning and Development (Housing) and Residential Tenancies Act 2016 are quite complex. Are there improvements to the implementation of the Rent Predictability Measure that could be made increase clarity and improve understanding of the measure?

7. Are the limits on rent increases being applied in practice across the boards in Rent Pressure Zones or are they being avoided or ignored? Enforcement of the measure is through tenants referring rent notices to the Residential Tenancies Board. Is this an effective approach to ensuring compliance with the legislation or is another approach required and, if so, what might this be?

8. Please provide any other comments and suggestions you would like to make in respect of Rent Pressure Zones and the wider rental sector.
 
How to get involved

The Department is inviting any interested parties to make written submissions to help inform the review of the Rent Predictability Measure and the system of Rent Pressure Zones. Those making submissions may use the consultation document provided at the link below. Additional information or documentation that you think may be useful, can also be submitted.


Submissions can be made in two ways;

  • by email to [email protected]
  • by post to:
    Rent Predictability Measure Review – Consultation Process
    Rental Market & AHB Regulation Section
    Department of Housing, Planning, Community and Local Government
    Newtown Road
    Wexford
    Y35 AP90
Submissions should be made by 30 June 2017.
 
Firstly, well done to Sarenco for bringing this to AAM.

However I will not be making any submission to this process. If they expanded the set of questions to include; Is the concept of rent controls a gross intrusion into privacy of contract between landlord and tenant; and, Is the PRZ a way to ameliorate the effects of poor government policy by shifting the burden onto landlords. I might consider it.

This reminds me of "Hard Times" a Dickens novel that I was subjected to at school. The industrialist was complaining that labour legislation was ruining his business, workers wanting safe conditions, limited hours etc. His response was that if this didn't stop he would take his business and "pitch it into the sea".

Of course landlords will not be pitching their properties into the sea. Dickens was wrong in imagining any dramatic response to encroaching legislation. Landlords will be quietly withdrawing properties from the rental market, selling them, putting them into Airbnb. If the government doesn't change its policy and try to support landlords they will walk away quietly and its prospective renters who will suffer.
 
cremeegg said:
However I will not be making any submission to this process. If they expanded the set of questions to include; Is the concept of rent controls a gross intrusion into privacy of contract between landlord and tenant; and, Is the PRZ a way to ameliorate the effects of poor government policy by shifting the burden onto landlords. I might consider it.
Click to expand...

Hi cremeegg

Make a submission anyway, with those points.

I would guess that the new Minister, Eoghan Murphy, would be a lot less interventionist than Coveney.

Brendan
 
For the avoidance of doubt, there is no requirement to answer all (or indeed any) of the questions for consideration when making a submission.

I think it's interesting that the first significant act of the new Housing Minister was to launch this consultation exercise. Does it imply that the Government are looking for political cover to reverse these daft measures?
 
Ok so I thought perhaps I will make a submission, after all there isn't much point complaining from the sidelines.

While I wont be responding to the questions as asked, I will try to focus on what I see as the relevant issues and avoid indulging myself in a whinge.

I will start by posting a draft submission here and would be glad of any suggestions for improvements.
 
The Strategy for the Rental Sector, published on 13 December 2016, recognises that high and rapidly rising rents is the most significant and immediate threat to the accommodation security of many households.

In order to reduce upward pressure on rental prices in the private sector the amount of property available on the market must increase. In the long term this requires increased construction, however there are several steps which can be taken to increase the supply of accommodation to the private rental sector from the existing housing stock. Indeed these steps may be necessary to facilitate supply to the private rental sector from future construction as well.

There is a belief among landlords, and perhaps more particularly among those people who are not currently landlords but own property that could be provided to the rental market, that the government is unsympathetic to the residential landlord.

If the government were to foster a culture whereby landlords were seen as supplying a vital public need and respected accordingly, the supply of properties to the market could be vastly increased. As a landlord I would love to be accorded the same popular affection and government support as the farmer, another small scale self employed supplier of a basic human need.

That the fair deal scheme should be revised to allow people resident in nursing homes rent out property without penalty is an obvious first step. Revising stamp duty so that those who might consider downsizing their homes are encouraged rather than discouraged is a second. Neither of these steps directly support the provision of rental accommodation but the fact that they have not been adopted despite being talked about for many years shows that the government lacks the will to take even simple practical steps to support the rental market.

The deductibility of interest should be allowed in full against rental income. While the concept of not giving any interest relief to facilitate capital accumulation may seem reasonable to an accountant, the 75% position has no obvious basis in reason. The picture given to the public is that land lording is somehow not a public good like other businesses and so should be penalised in the tax code.

There is a perception that the RTB is biased against landlords. This perception is perhaps unfair but the image is important and more should be done to demonstrate that it will support a landlord against a rogue tenant. In particular where a landlord secures a ruling from the RTB that a tenant must leave a property, there must be an enforcement mechanism. It does not have to be easy for a landlord to get an eviction order, but once they do secure one, they must be able to enforce it.

The situation at present is that a tenant can overhold against a valid evection notice, and even a determination from the RTB, without penalty. This must be changed if any timorous potential landlord is to have the courage to put their property into the private rental market. There is real concern that this loophole will be exploited not by bone fide tenants but by criminal elements who will be attracted by the opportunity.

The slow working of the RTB is another concern which is seen as detrimental to landlords. Usually the tenant continues to enjoy use of the property, perhaps paying rent perhaps not, while the RTB process winds on and on. Again government could be seen to support the market, both landlord and tenant would benefit from a more efficient RTB.

Finally perhaps legislation could coin a new word for a person who rents out a property in the residential letting market. I don't like to be described as "lord" in any form, nor do I see it as reflective of reality.
 
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The rent a room model should be extended to landlords in so far as any rent up to a given amount is tax free. Any amount above that amount and all income is taxable. The limit could be increased by the rent pressure zone % fig. The benefit of this is to ensure landlords income remains consistent with a reasonable return on their investment. This will help to put a ceiling on rental increases while at the same time allowing landlords increase rent in line with normal economic factors. There is no justification for rents to be held artificially low because a good tenant had a low rent as they built a good relationship with a landlord and then a new tenant is automatically entitled to this lower than market rent.

The constant interference in the rental market by the state will stifle investment. Investors by there nature accept that they need to deal with the uncertainties of the market and should deal with same accordingly. Changing the law does not allow landlords react in a business manner. With the rent caps there will be a race to the bottom. Why would a landlord invest in his property if he can't get any return on that investment.

Finally the role of the RTB needs a serious overhaul. Overholding tenants, bad landlords should both be dealt with within a max of three months. If all stakeholders want a professional relationship then same should be run professionally to ensure a fair deal for all concerned.
 
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