Government to oppose rent-cap bill over fears of 'cherry-picking' tenants

Cork North Central TD Mick Barry, the Bill’s proposer, said that 'one renter in three is now spending half or more of their household income on rent'. Picture: Damien Storan

The Government will oppose a People Before Profit bill to cap rents over fears it could lead to "cherry-picking" of tenants.

The Rent Reduction Bill 2023 would direct that new accommodations charge rent at a maximum rate of 25% of monthly median household income, and that already existing accommodations charge the new rate within 12 months of enactment.

It would also set up a National Rent Authority to oversee the implementation of the measures.

Cork North Central TD Mick Barry, who is the Bill’s proposer, said that “one renter in three is now spending half or more of their household income on rent".

Rents here are 78% higher than the European average. Three years ago, Ireland went to the top of the world charts for percentage of household income spent on rent.

However, Housing Minister Darragh O'Brien received Cabinet approval on Tuesday to oppose the bill on Wednesday morning.

A Government spokesperson said it is the Government’s position that the Bill would likely face "significant risk of a legal challenge and is highly likely to have a detrimental effect on the supply of rental properties".

The proposed method of determining rent price ceilings linked to household size could incentivise landlords to cherry pick tenants. 

"Larger households could be favoured over smaller households, raising risks associated with overcrowding, while single households could likely be constrained in the market as couples would be in a position to pay a higher rent."

Also at Cabinet, Tánaiste and Minister for Foreign Affairs Micheál Martin said that last month's St Patrick's Day programme was the "most comprehensive ever" as public representatives carried out 77 programmes in more than 70 cities, across 41 countries. 

Cabinet was told that 91 individually tailored video messages for Irish missions, and the special St Patricks Day video featuring a performance of Danny Boy by singer Tolu Makay and other related digital content, have been seen over 10m times across the main digital platforms around the world.

Mr Martin also received Cabinet approval for Ireland to establish diplomatic relations with St Kitts & Nevis and Grenada, both on a non-resident basis, and to approve the establishment of a resident Diplomatic Mission in Ireland for the Government of Barbados. Barbados notified Ireland of its desire to open an embassy in Dublin in February.

Finance Minister Michael McGrath, meanwhile, asked Government to note the 2022 annual report of the Revenue Commissioners. Revenue’s net Exchequer receipts for 2022 were over €82.2bn, with the largest tax receipts from Income Tax (€30.7bn), VAT (€18.6bn), and Corporation Tax (€22.6bn).

The Government also agreed to nominate solicitor Shalom Binchy as an Ordinary Judge of the District Court. The District Court vacancy arose following the retirement of Judge Brian J Sheridan.