Rent pressure zones in Navan and Limerick City East have come ‘too late’

Rent controls ‘devalue property when selling’, says Irish Property Owners Associations

Tenants in Limerick City East paid €266 more in rent in the fourth quarter of 2018 when compared to the same period in 2016, according to housing charity Threshold. File photograph: PA Wire

Tenants in Limerick City East paid €266 more in rent in the fourth quarter of 2018 when compared to the same period in 2016, according to housing charity Threshold. File photograph: PA Wire

 

The Threshold housing charity has welcomed the designation of Limerick City East and Navan as rent pressure zones but reiterated calls for a rent register to ensure the regulation of rent increases across the State.

The charity noted that last year’s seven per cent increase in average rent, coupled with the 10,264 people living in emergency accommodation, further highlighted the “affordability crisis” and “financial hardship” faced by many in the private rental sector.

Threshold chief executive John-Mark McCafferty said the classification of Limerick City East and Navan as rent pressure zones was welcome but came too late. Tenants in Limerick City East paid €266 more in rent in the fourth quarter of 2018 when compared to the same period in 2016, he said, while rents in Navan rose by 32 per cent. Rent increases in these areas will now be limited to a maximum increase of four per cent per year.

“We have been highlighting for some time the rising rents in places such as these and the need for rent pressure zones to be extended nationally,” said Mr McCafferty.

“The experience of tenants in Limerick City East and Navan needs to inform future policy to ensure that tenants elsewhere do not have to experience the same level of rent increases for prolonged periods in order to be afforded the protection of the RPZs.”

He warned that Dundalk south looked set to follow a similar trajectory and that measures were needed so new tenants could find out the previous rent paid on their home. “This reinforces our call for a dwelling specific rent register to give tenants this information in order to challenge rents above the permitted increases,” he said.

‘Belated admission’

Fianna Fáil TD Shane Cassells said the decision to make Navan a rent pressure zone was a “belated admission” by the Residential Tenancies Board of the huge rental increases in the area, adding that there was no accommodation available in the town.

“Walk past the window of any estate agent in Navan and there is a complete absence of affordable property to either rent or buy,” said Mr Cassells. “While any measure to help hard pressed tenants is welcome, what we really need is a proper housing solution for the expanding population in Navan.

“What I would prefer to hear coming from government is the announcement of an affordable housing development for Navan, which would provide families with homes not more false hope”, he said.

Former Minister of State for housing Jan O’Sullivan said the Rebuilding Ireland plan was no longer fit for purpose and called on the Government to admit that its housing policy was failing. The focus should be on ensuring people cannot be thrown out of their homes, Ms O’Sullivan told RTÉ’s Morning Ireland.

“There is plenty of public land social housing could be built on,” she said, indicating that funding could be made available through a rainy day fund or by borrowing from the European Investment bank. She added that a greater emphasis was needed to ensure people can stay in their rental accommodation and do not face evictions “for spurious reasons”.

Meanwhile, the Irish Property Owners Associations (IPOA) said rent pressure zones are creating a “two tier system” and that rent controls “devalue property when selling”. The property group argued that existing renters benefit more from lower rent levels than new entrants into the market and called on the Minister for Housing to change legislation so that properties could revert back to market rent after being sold.

“Rental properties in rent pressure zones with existing low rents will either be devalued for investment purposes or will leave the private rental market, reducing the supply of accommodation,” said IPOA chairman Stephen Faughnan. “Supply is the issue and current housing policy is reducing available rental accommodation.”