It’s time we felt at home with the idea of rent control
Opinion: There is widespread agreement now that Ireland is facing a housing crisis
More people in Ireland are renting their homes today than at any other time since the 1950s. Successive governments have viewed the rented sector as an essential part of the overall housing system, accommodating those who need flexibility in their housing arrangements or who are unable or unwilling to enter into home ownership.
Increasingly, the private rented sector provides homes for those whose rents are paid for by the State through the rent supplement system, and it also accommodates those moving out of homelessness.
At present, however, the private rented sector is in crisis. Rising rents – particularly in large urban centres – are leading to “economic evictions”, whereby families are being forced to leave their homes because they can no longer afford the rent. Threshold’s experience is that some tenants in the capital are being asked for rent increases of more than 20 per cent. The reality is that such increases – coupled with a growing shortage of affordable accommodation – are driving people into homelessness.
Over the past year, Threshold has seen a doubling of the number of people contacting our service because they were homeless or at risk of becoming so. In Dublin alone, we had 800 referrals concerning people who found themselves in this situation.
There is widespread agreement now that Ireland is facing a housing crisis, and that something needs to be done. The idea of reintroducing rent control has emerged as one potential solution.
Minister Jan O’Sullivan has suggested she is open to examining this idea. Threshold – whose clients tend to be at the lowest-income end of Irish society – is also very much in favour.
In proposing a system of rent control, Threshold is not suggesting landlords should not get a reasonable return on their investment; rather, what we are proposing is a system of rent control within tenancies. Landlords would still get the going market rate whenever they put their property up for rent; however, once it was rented, tenants would have some level of rent certainty.
In contemporary Ireland, it is perhaps more realistic and more palatable to talk about “rent certainty” rather than “rent control”: what we need is a system of reasonable and predictable rent increases to provide stability for both landlords and tenants. For the thousands of families who have made their permanent homes in rented housing, such a system would assure them that their children would be in the same school next autumn; that they would be playing in the same GAA club; and that they could invest in their community without worrying that an arbitrary and unpredictable rent increase might drive them out of their homes.
There has been a suggestion that reintroducing rent control or rent certainty would be unconstitutional. In fact, it is a misperception that rent control – per se – was found to be unconstitutional in Ireland in the past. What was found to be unconstitutional was freezing rents permanently, where there was no reasonable return at all to landlords.
Ireland actually has a measure of rent control already, under the 2004 Residential Tenancies Act. This legislation allows for rents to be reviewed annually and only to market levels. This has not been challenged in the courts for good reason, I believe.
Rent control also came under consideration in 2000, when it was examined by the Commission on the Private Rented Residential Sector. The commission found that the Constitution – with its protection on property rights – does not, in principle, prevent the operation of rent control in Irish law in circumstances where a reasonable balance between competing interests has been struck.
Many other European countries have legislation regulating rents. For example, Germany has a regulatory system that protects sitting tenants from excessive increases in market rents. The Netherlands, France, Switzerland and Spain also have rules protecting sitting tenants.
Markets are not forces of nature; they are, and should be, subjected to regulation. People who suggest that we should not interfere with the housing market would have no difficulty in supporting the Common Agricultural Policy, which gives some certainty to farmers about their incomes. We have regulation in every walk of life to protect our citizens.
The bottom line is that a system that limits rent increases to some independent indicators, such as the Consumer Price Index, will – in Threshold’s view – reduce the likelihood of families having to leave their homes.
Rent certainty isn’t the only solution to Ireland’s current housing crisis – but it is an important first step.
Dr Aideen Hayden is chairwoman of Threshold, the national housing charity, and Labour Party spokes woman on housing in Seanad Éireann.