Rent pressure zones 'significantly inhibiting' delivery of apartments in Dublin

Housing minister James Browne said rent pressure zones are only 'one part' of the overall picture on apartment delivery, and that renters should not be asked to fix the delivery of new apartments. Picture: Gareth Chaney

The current system of rent pressure zones (RPZs) is “significantly inhibiting” the delivery of apartments in Dublin, housing minister James Browne has said as he confirmed changes to rent controls are coming.

He said that while the Government will soon be changing RPZs, he still aims to protect renters.

“There has to be change. There’s no question about that. The current system is significantly inhibiting the delivery of apartments in Dublin,” Mr Browne said.

“I think all of the research is pointing to that direction and it’s just obvious from the fact that apartments are not being delivered.”

In an interview with the Irish Examiner, he outlined his approach to dealing with the housing crisis, including getting smaller builders back constructing and improving wastewater development.

He added that RPZs are only “one part” of the overall picture on apartment delivery, and that renters should not be asked to fix the delivery of new apartments.

“It’s more finding out what element of that is causing developers and international finance to not even look at Ireland, as opposed to loading on to renters,” said Mr Browne.

The housing minister said in any decision he makes there will be “significant protections” for renters, which will include examining reforms to renters’ rights. 

The Housing Agency has provided Mr Browne with an options paper on reform, which includes the outright abolition of RPZs, retention, or changing by how much landlords can increase rents each year.

Asked about the prospect of reference rents, as set out by the Housing Commission, Mr Browne said the challenge is that the system itself is “very complicated” and would take years to establish.

Mr Browne said he is not against a reference rents system and it could be something to look at in future but that significant amounts of information would be needed to ensure its success. 

Such a system would peg rent increases to a ‘reference rent’ for properties of a similar size and quality in a locale.

On developers, Mr Browne said it is a “real frustration” for him that small to medium-sized builders are struggling to deliver homes across the country due to several key blockages.

“We have small and medium-sized builders who can build 10 to maybe 100 houses a year. There’s multiple of them in every county. They delivered huge amounts of houses and homes previously,” he said.

“They find that they cannot do that now and, if you have 10 of them in every county delivering 50 houses every year, you can actually start delivering substantial amounts of houses.”

He said the requirement for builders to have 30% equity before a bank will provide them with finance is “very challenging”, adding he has met the pillar banks on several occasions.

On Uisce Éireann, Mr Browne said any funding provided by the Government to the agency would be “ringfenced” to deliver more serviced sites for builders.

“Uisce Éireann has mostly been operating as the environmental conservation utility rather than a home delivery utility. We need it working as a home delivery utility,” Mr Browne said.

'Uisce Éireann has mostly been operating as the environmental conservation utility rather than a home delivery utility.'

To improve delivery of wastewater projects, Mr Browne said he is examining the possibility of allowing local developers to deliver water infrastructure in what he calls a “plug and play” model.

Mr Browne said he has had a number of meetings with Uisce Éireann on the matter, with a hope that standards for delivery of wastewater projects could be unveiled in the coming months.

He added that current standards for Uisce Éireann around wastewater are “very onerous”, requiring each water treatment plant to be bespoke.

“I’m going through each and every regulation, finding where the blocks are, getting them changed because we’ve tied ourselves up in regulatory knots and that’s what’s putting so much investment off,” Mr Browne said.

He admitted there was previously a requirement for stronger regulation but the State had “way over-corrected” itself.

Mr Browne confirmed that he would not consider the reintroduction of co-living as a means to deal with the crisis, saying such developments are “not acceptable” for people to live in.