The Government should replace long-established rent pressure zones (RPZ) with a new system of regulation while making all rents being charged publicly available, the Housing Commission has recommended.
The leaking of parts of the report has put the Government on the back foot over housing in advance of a vital election period, with charges that the housing crisis in Ireland has been driven by “ineffective decision making and reactive policy making”.
The report’s verdict that the housing crisis in Ireland has been driven by “ineffective decision making and reactive policy-making” led to strident criticism of Government policy from the Opposition. It finds that although Ireland spends among the most in Europe on housing, it has some of the worst outcomes.
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A full copy of the report obtained by The Irish Times argues that the current RPZ system, which limits rent increases to inflation – or a maximum of 2 per cent, whichever is lower – should be replaced.
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Instead, a new system that pegs rent increases to nearby homes of a similar quality should be introduced, according to the report. Rent would not rise more than a set percentage above this level over a specified period, taking into account costs such as management and maintenance, interest rates and household incomes and affordability.
It also argues that the State should “establish a publicly available register of rents being charged”.
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RPZs, it says, were introduced as a temporary measure eight years ago and now the “system of regulation needs to be made fit for purpose for the longer term”. The Cabinet this week agreed to extend the rules to the end of 2025. The report says that studies have suggested non-compliance with the rules is an issue in Ireland, and cites research that argues RPZs contribute to a “two tier” rental market with existing tenants enjoying lower rents and those seeking a home face “significantly higher” charges.
It finds the methodology employed when extending the system to cover new areas is “not fit for purpose” and that the current approach leads to “inconsistencies and inequities”.
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Moving to reform the RPZs, which have become a core feature of the rental market in Ireland since their introduction and expansion over many areas, would likely spark significant debate over a replacement – just as the Government gears up for a series of elections where housing costs will be a key issue.
The report also indicates that the recommendation split the commission, with three members – Ronan Lyons, Michael O’Flynn and Dermot O’Leary – arguing that there was a consensus in international research “in terms of the negative impact, in aggregate, of rent controls, especially quasi-permanent rent controls of the type proposed here”.
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They argued that rent controls within tenancies would be more effective and that aspects of the recommendation of the report would “adversely impact supply and it is therefore inconsistent with the conclusion of the commission elsewhere in the report”, adding that direct controls on rent should only apply as a temporary measure in specific locations “rather than a permanent system of rent determination as recommended here”.
The report also recommends that the State should “amalgamate regulatory agencies involved in regulating rental accommodation” under a single authority “and strengthen the enforcement powers”.
Taoiseach Simon Harris defended the Government’s progress on housing in the Dáil, pointing to record figures on housing commencements and social housing completions last year, denying that the Government was attempting to delay publication of the report until after next month’s local and European elections.
The report found that there is an underlying housing deficit of 256,000 homes in Ireland and recommended that 20 per cent of the housing stock should be composed of social and affordable homes, as well as the establishment of a new Housing Deliver Oversight Executive and of high-yielding Housing Delivery Zones.
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