European-style controls could ease rent crisis

European-style rent controls are needed to limit soaring price increases for private rented accommodation, campaigners have warned.

The youth movement We're Not Leaving has published a policy document which states that rent increases could be limited to 10 per cent over a three-year period under new rules.

It is one of a series of proposals aimed at increasing affordability and security of tenure for the third of the population which now lives in rented accommodation.

Rental costs in the capital have jumped by 14 per cent over the past year, with average costs now standing at just over €1,370 a month, according to figures compiled by Daft.ie. Nationally, rental costs are up about 11 per cent.

Not fit for purpose

Aideen Elliot, of We’re Not Leaving, said legislation governing the private rented market was no longer fit for purpose and must be overhauled.

“Too many people are living in uncertainty and don’t know how long they can stay in their home,” she said.

Rent controls in Ireland were abolished in the mid-1980s following a legal challenge by a former Fianna Fáil councillor which found them to be unconstitutional.

But the We're Not Leaving group says modern rent controls in Europe were different from the blunt instruments of old – which froze rental costs – and provided flexible limits which seek to balance the interests of tenants and landlords.

Rental index

Germany

– which has more renters than anywhere else in Europe – has a rental index that is updated annually and takes into account factors such as the age of a building, the quality of facilities and demand for a neighbourhood.

Tenants may take legal action if landlords request rents significantly in excess of the index.

Similarly, countries such as the Netherlands, Switzerland and Sweden have rent controls based on factors such as the consumer price index and local indicators.

However, a recent report from the Private Residential Tenancies Board said that rent control could end up making the market worse by making fewer properties available for rent.

Minister for the Environment Alan Kelly has also signalled he is not in favour of rent controls and instead is focused on increasing housing supply. This, he says, will bring down rental costs.

At the launch of the group’s policy document last night, Fr Peter McVerry called on the Government to implement controls to help tackle what he described as a “tsunami” of homelessness.

He also said increases in rent supplement caps were urgently needed if the Government was serious about helping vulnerable people remain in their rented homes.

We’re Not Leaving has also called on policymakers to implement a long-promised deposit protection scheme for tenants and to increase security of tenure for renters.

Another step it supports is the introduction of a “certificate of minimum standards” for rental accommodation similar to the NCT for a car.

Increasingly worried

Sara Stephens, a member of the campaign group, said many young people were increasingly worried about being able to keep a roof over their heads due to stagnant incomes and uncertain working hours.

She estimates that simply sharing a house or a room would require more than 40 per cent of her after-tax income.

“A part-time job where one week I could have lots of hours and the next I could have none means no landlord will have me,” she says.

“I am part of this new normal, twentysomethings still living with their parents.”

We’re Not Leaving is a campaign aiming to unite young people, students, precarious workers and the unemployed to stand together against the causes of youth emigration.