Jim Power: Fiddling around with the rental market is a waste of time
Last week Housing Minister James Browne announced changes to the rent control system including the rollout of rent pressure zones across the country.
Last week, the housing minister announced another significant policy change.
In the programme for government a commitment had been given to review the rent pressure zones (RPZs), and I guess what happened last week is consistent with that.
There had been suggestions in recent weeks that the Government might scrub RPZs, but, instead, they are now, in effect, being extended to the whole country.
However, people who are ideologically disposed towards rent controls are not happy, because landlords have been given more flexibility in setting rents.
Landlords will be able to reset rents when tenancies end of the renter’s own volition, instead of being tied to 2% increases.
Reading the press release from the minister is not enlightening or clear, but that is typical of many of the measures introduced by the various governments since 2011.
There have been so many changes in policy, and so many interventions, that one can be justifiably confused.
RPZs were introduced in 2016. CSO data shows that between May 2016 and May 2025, private rents increased nationally by 63.2%.
The minister stated that the main reason for the changes is to increase the supply of apartments and that there is a need to build 50,000 homes per year.
That is a conservative estimate, given the mess that is the housing market.
I may be proven wrong, but I cannot see this week’s changes bringing forth the sort of supply that is required.
There is a lack of serviced land; the water and energy infrastructure is not up to the task of supporting the level of new housing supply that is required; the planning system is not fit for purpose; Nimbyism is a national plague, which cowardly politicians are not prepared to address; the financing model for development is not fit for purpose; and there are question marks over the capacity of the construction sector to deliver what is required.
This last point is the one that I would have least concern about, given that in the not-too-distant past we delivered close to 90,000 residential units. Different times, but it should still be possible.
On the question of a financing model for development, surely the sort of market failure that currently characterises housing warrants significant state intervention.
At the end of April, €164bn of household deposits were sitting in the uncompetitive banking system, delivering little if any return to depositors, and in fact negative real returns.
I wonder if these deposits could be redirected in a safe and secure manner to address the financing of housing.
We need to explore the possibility of issuing bonds to the public to fund housing development, with state guarantees, offering rates of return much more than that being paid by the uncompetitive banking system.
Fiddling around with the rental market is a waste of time, particularly given that close to 90% of renters aged between 25 and 49 want to be homeowners.
Addressing supply in all segments of the residential market needs to be given crisis-time priority, because it truly is a national crisis.
Many of our younger generation are disillusioned and angry about housing.
Successive governments and ministers have sat by and presided over this policy failure and they should be forced to do something radical or pay the price that their failure deserves.
