The housing crisis: Fixing the damaged rental market

Irish society will have to accept that rental is no longer a short-term option

Rental opportunities in Ireland are limited. Photo: Getty

Rental opportunities in Ireland are limited. Photo: Getty

 

The State is rushing to adopt a European-style rental accommodation strategy, but without the legislative or policy frameworks that would provide reassurance for both tenants and landlords. Quality control, in terms of the size of apartments and their attendant facilities is also under pressure because of the reluctance by some builders to produce high-density developments. These are not new concerns. They have been repeatedly raised by Rosalind Carroll, director of the Residential Tenancies Board, but were lost in the clamour generated by the housing crisis.

The role of the RTB is not to favour landlords or tenants but to implement legislation. In earlier years, it adopted the role of honest broker in a sector where the law was unambiguously on the site of the landlord. Recent legislation strengthened its role as arbitrator, but security of tenure remains a serious problem for tenants. Its annual report reflects this situation and it expressed concern that the Government cap on rent increases is being breached. More than half of all tenancies are now covered by this regulation. But rents continue to be raised and anecdotal evidence suggests that tenants are reluctant to object for fear they may lose their homes.

While emphasising the need for the sector to be attractive to landlords and tenants alike, the RTB reminds tenants that if they make a complaint, no action can be taken against them - in terms of a rent increase or eviction - until the case has been heard. Tenants may also appeal against unlawful rent increases for up to six years and receive compensation of up to €20,000. In three-quarters of recent cases involving rent increases, the board found in favour of tenants.

Traditionally, the private rental sector was viewed as a kind of property limbo: a stepping-stone for some people to eventual home ownership and for others to a council tenancy. Largely unregistered and in the black economy, successive governments tolerated damp, sub-standard conditions and tenants had little security of tenure. Following the sale of local authority housing to tenants in the 1990’s, the private sector was expected to meet demand. The Private Residential Tenancies Board was established in 2004 and received additional powers in 2015.

The rental market is damaged and fragmented. Most of the State’s 175,000 registered landlords own just one property and some tens of thousands are in negative equity. A number of large companies and institutional investors have recently become involved. Society will have to accept that rental is no longer a short-term option. That demands a change in Government policy involving the preferred housing mix. It will require further regulation of the sector; affordable homes for older people as their disposable income falls and the creation of competition between profit and not-for-profit accommodation.

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