Varadkar defends rent controls: 'One person’s rent is another person’s income'

Opposition urges Government to back three-year rent freeze to combat rising prices

Tánaiste Leo Varadkar warned against putting a freeze on rent increases due to expected inflation in the economy warning that "one persons rent is another persons income". Video: Oireachtas

 

Opposition parties have called for a three-year freeze on private rent to combat prices continuing to rise in an already inflated market.

Sinn Féin’s housing spokesman Eoin Ó Broin claimed the average tenant is paying €4,000 a year more in rent because the last government failed to support such a rent freeze.

Rising rents and falling housing supply “is the Fine Gael way”, Mr Ó Broin claimed.

The Labour Party and the Social Democrats have also sought a rent freeze along with improved protections for tenants.

Tánaiste Leo Varadkar defended the Government’s record on rents, said there needed to be “a balance” between regulating rental costs and landlords’ income.

“One person’s rent is another person’s income - it might be their pension, it might be how they pay their mortgage.”

Mr Varadkar told the Dáil he was not a landlord but others relied on rental incomes, adding that 86 per cent of landlords have either one or two properties and the number of available rental properties was falling.

He added that linking rents to inflation was a rent freeze in real terms and said that when interest rates rose, freezing rents would mean some people could not afford to pay their mortgage.

The Tánaiste insisted that people would not see big rent increases anymore and the Government’s new policy was “a rent freeze in real terms” because rents could only rise in line with inflation.

Minister for Housing Darragh O’Brien in July announced that rent increases in rent pressure zones would be tied to inflation. Previously in the zones rents could increase by a maximum of 4 per cent a year.

Labour TD Ivana Bacik said she would be introducing a Tenants’ Rights Bill as a private members Bill in the Dáil this week. The Bill sets out to give tenants improved security of tenure against eviction, prevent rent hikes and include measures that will help tenants have a better quality of life.

Speaking at Leinster House Ms Bacik said this issue had been a dominant one during the Dublin Bay South byelection. Almost half the registered voters in the constituency are renting.

She said that feedback the party had received from those renting was that people continued to struggle, find the rent levels “soul-destroying and demoralising” and are under a constant fear of eviction.

“They have included very unfair terms, including having to pay a professional company to clean an apartment [in order to get their deposit returned].”

Ms Bacik said the Bill would provide for a three-year freeze.

Cost-rental homes

The Social Democrats spokesman on housing, Cian O’Callaghan, made a similar call at a separate media opportunity at Leinster House a little later.

He said his party want a ban on any increase in rent until such time as sufficient cost-rental homes had been built.

He also highlighted the situation where planning permission had been granted to convert student accommodation into temporary-stay accommodation for tourists.

Mr O’Callaghan instanced permission been given by Dublin City Council to convert 500 student rooms into short-let tourist accommodation for a period from now until next May.

“It’s completely unacceptable given the rental crisis and the crisis in student accommodation,” he said.

“It makes no sense at all in terms of the hotel room vacancy we have [in Dublin].

He said the argument used by the owners was the accommodation had been geared towards international students who pay high rents.

But, said Mr O’Callaghan, that was not the reason they the developers were given planning permission initially.

“They were given planning for student accommodation full stop.

“Those owners should be reducing their rents rather than pitching them at the tourist market,” he said.

Mr Ó Broin said the Government’s rent control measures were “too little, too late”. He said his party in 2015 had called on the then government to link rent increases to inflation and the following year rents “rose by an alarming 14 per cent across the State and in Dublin by 15 per cent”.

He added that they warned Mr O’Brien about this in July but “he ignored us, inflation is up running at 3 per cent, and economists are saying it will rise even further,” he said.

Insisting on a balance between rental increases and landlords’ income, Mr Varadkar said: “In a time of rising prices and in a time of rising interest rates - and that hasn’t come yet but it will come - if you freeze rents absolutely to zero, that could mean an income cut for another person, a pension cut for another person or another person unable to pay the mortgage on that property.”

He said this was exactly the problem Mr Ó Broin identified and it would result in more landlords leaving the market.

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