All rent prices in Cork and Dublin will be effectively frozen for the next three years as part of drastic new ‘rent pressure zone’ emergency measures aimed at tackling the surging rental market.
Housing Minister Simon Coveney is set to announce the move targeting Ireland’s two largest cities today as part of long-awaited attempts to address the rental crisis in the urban heartlands.
Under plans due to be signed-off on by Cabinet this morning and to become law before Christmas, the Government will state that Cork and Dublin’s rental price rises are not sustainable and must be addressed due to the country’s growing homelessness crisis.
As a temporary measure, the cities will be designated ‘rent pressure zones’ once legislation is passed through the Dáil and Seanad before the Christmas break, severely limiting any future rent rises.
The ‘pressure zone’ system will include a specific rule that existing rental properties’ prices cannot increase by more than one low single figure percentage rise — believed to be far less than 5% — between now and the end of 2019 in a bid to bring the market under control.
And while new builds and currently vacant properties will be excluded to encourage developers and local councils to make more homes available, the emergency measures will by the end of this month encompass all of Cork City and Dublin City.
The pressure zones will be overseen by the independent Residential Tenancies Board body, which will conduct examinations of local areas by the middle of next year to clarify if there is a need to continue the de facto price freezes in specific locations.
While the move is likely to lead to frustration from people struggling to meet rising rent demands in other parts of the country, it is understood the decision to focus specifically on Cork and Dublin was taken because of growing concerns over the housing situation in these areas.
The Government rental plan is also expected to include fresh incentives for developers to build new, realistically priced rental property on State-owned land banks and to encourage local councils to fast-track thousands of currently vacant homes back into use.
Extra dispute resolution powers are also planned for the Residential Tenancies Board, while rental properties will have to meet new fire safety, heating, and other rules before being allowed onto the market.
While the plan will not become law until next week at the earliest, Government figures last night said the ‘pressure zone’ legislation will be enacted by Christmas meaning landlords — whose representatives previously said they will pull properties from the market if faced with fresh restrictions — will not have time to increase rents.
Last year,the then environment minister, Labour’s Alan Kelly, introduced rules meaning landlords could only impose one unspecified rent increase every two years, and would have to provide evidence of three local properties of similar quality also raising prices before this could take place, while other opposition parties have consistently called for rent to be linked to the consumer price index.
More than four family homes are being repossessed every day, figures from the Central Bank have shown.
Debt experts and opposition politicians have called on the Government and the Central Bank for action as the latest mortgage arrears figures show a huge number of households still face
distress, amid fears ordinary homeowners will increasingly be left at the mercy of vulture funds.
Figures for the three months to the end of September showed 421 homeowners either volunteered or were forced to hand over the keys to the properties.
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