Council paid rent hikes to 64 landlords over 4% cap
Dublin landlords secured increases averaging 10% before limit was introduced
Vulture funds are, on average, considering more arrangements for those in arrears when compared to banks and retail credit firms. Photograph: Rui Vieira/PA Wire
Dublin City Council paid rent increases to 64 private landlords for social housing in 2017 that were above the 4 per cent cap for so-called rent pressure zones.
Rents paid by the local authority to landlords rose by an average of 10 per cent last year under the rental accommodation scheme (RAS), one of the State-subsidised housing schemes used to provide accommodation to people who have been on social housing waiting lists for at least 18 months.
The monthly rent paid to private landlords by the council for RAS tenancies increased from €1,353 a month in 2016 to €1,494 a month in 2017, a rise of 10.4 per cent.
Under the scheme, local authorities arrange with landlords to provide housing for people on social housing waiting lists and the council pays the rent directly to the landlords on behalf of the tenants.
In a bid to protect tenants from soaring rents as the housing crisis worsened, the Government introduced a 4 per cent cap for three years on rent increases in designated rent pressure zones.
Dublin city was categorised as a rent pressure zone and the caps were put in place from December 24th, 2016 under the Planning and Development (Housing) and Residential Tenancies Act 2016.
The council explained that it had to contact 29 landlords to renew rental contracts, and a further 38 landlords were contacted for rent reviews at least three months prior to their renewal or review dates.
These contacts were made before the rent pressure zone cap came into effect, the council said, and this meant it had to honour rent increases to 64 landlords that were above the 4 per cent.
Landlords can raise rents in excess of the 4 per cent limit if they carry out substantial works to the properties. The council said such work was carried out on three properties, exempting the landlords from the cap.
People Before Profit TD Richard Boyd Barrett said that it was “quite shocking” but not surprising given the housing shortages that local authorities were increasing rents for landlords beyond the limit.
“It is another symptom of the whip hand that the landlords have over the Government because of the chronic shortage of public housing,” he said.
“At one level I can kind of understand the council’s dilemma because they understand landlords can pull out of accommodation that people need in emergency situations, but it is still unacceptable.”
Sinn Féin TD Eoin Ó Broin, the party’s housing spokesman, said that if the rent reviews were received prior to the enactment of the legislation, then the increases were in line with the law.
“If Dublin City Council acted in a way to prevent people losing their tenancies, then, notwithstanding the increase, they have done the right thing,” he said.
The decline in public housing construction over successive decades has left the Government relying heavily on private landlords to meet the vast majority of social housing needs through the Housing Assistance Payment (HAP), RAS and long-term leasing schemes.
Average rents paid to private landlords by Dublin City Council under long-term leasing arrangements rose 20 per cent in 2017, data released under the Freedom of Information Act shows.
The council said that the under long-term leasing arrangements, involving 10- to 20-year tenancies, landlords are exempt from the rent increase limits introduced in rent pressure zones.