The Taoiseach has cautioned against further rent controls, saying they could increase the number of ‘black market’ landlords.
Leo Varadkar’s comments came as a Daft.ie report showed that national average rental costs rose by over 10% in the past year to more than €1,200 a month.
The Government yesterday came under intense criticism in the Dáil. Mr Varadkar was accused of being “out of touch” with families and individuals struggling to pay rents which have surpassed Celtic Tiger levels.
Opposition parties, as well as housing charities, said the figures show rent pressure zones are not working.
Simon Communities spokeswoman Niamh Randall said the rent pressure zones which were introduced in 2016 and which cover 21 areas, including all of Dublin, Cork City and several suburbs, need an urgent review.
“Rent pressure zones cannot work without proper monitoring and enforcement,” she said.
#Rents increased nationally by 10.4% last year, now 19.2% above their previous high. Increases around the country include Limerick city 14.8%,Louth 14.1%,Galway & Waterford cities just over 12%,Offaly 11.4%, Dublin 10.9%, Cork city 7.7% & Cork county 8.6% #DaftReport pic.twitter.com/itnPg3gr9c— Niamh Randall (@NiamhRandall) February 13, 2018
However, Mr Varadkar told the Dáil: “When it comes to any additional measures, we need to be careful.
“There is a risk that if you bring in rent controls that are too strict or too rigid, that that is counterproductive. That you actually create even more of a black market in rent.
“We see that happening in places where there are very strict rent controls and people end up paying cash amounts under the table or end up sub-letting to others.
“The rent pressure zones are there to ensure we limit rent increases for those who are renting already — more than half of the people who are renting are now covered by them — and are not seeing rent increases of double-digit levels.”
However, Fianna Fáil leader Micheál Martin questioned whether the Taoiseach “lives in the real world” as it was clear rents had “gone through the roof”.
He highlighted a report on taxation of rental accommodation published by Government in September 2017 and said it was extraordinary not one of the report’s 10 recommendations had been implemented.
Mr Martin criticised Mr Varadkar, who said he would have to “remind” himself of the report’s recommendations. The Taoiseach’s lack of knowledge of the report “sums it all up”, said Mr Martin.
“This was a substantive report undertaken by his Government five months ago,” said Mr Martin. “It was published in September and the Taoiseach knows nothing about it and it is put away because there is too much focus on spin all of the time.”
Sinn Féin’s Eoin Ó Broin told the Dáil that renting in Dublin now costs on average in excess of €20,000 yearly and, outside of Dublin, on average €10,000 per year.
“How are ordinary people meant to afford this level of rent?” he asked.
The Social Democrats called for the urgent passage of their Bill to give incoming tenants access to the amount of rent paid by their predecessors.
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