Micheál Martin: Government to consider abolishing rent pressure zones

Taoisech Micheál Martin TD at Government Buildings, Dublin. Picture: Gareth Chaney

The Government will look at everything again when it comes to housing, including abolishing rent pressure zones (RPZs), the Taoiseach has promised.

Signalling a major departure from current housing policy, Mr Martin said changes to entice more private market input as well as a full review of the rental market are now required.

He added that "a mistake" was made in relation to vilifying vulture funds in recent years and said pension funds have a role to play in housing.

"I'm prepared to look fundamentally at everything again, because we need higher volumes," Mr Martin said, adding that "nothing should be off the table".

In the Dáil both the Taoiseach and Tánaiste were this week accused of misleading the public over claims that 40,000 new homes would be built last year to “win votes” in the general election.

Instead, a total of 30,330 homes were built, a decrease of 6.7% on 2023, according to figures from the Central Statistics Office (CSO). Mr Martin believes the private market now needs to become more involved and controversial vulture funds should be encouraged to invest in property.

"We've got to look at the private market again, like the State is intervening everywhere, huge subsidies from the State, €6bn this year.

"So we simply have to get the private sector involved in apartment building, in greater rental supply. That means we have to look at everything to enable us to do that. Nothing should be off the table."

The Taoiseach said this has been identified as "our key weakness" during a series of internal meetings held with officials since he entered office.

"There's been a tendency in the debate in Ireland to attack funds, for example, pension funds. 

Pension funds, have a role in terms of financing construction in this country, I think a mistake was made in last four years where they became the subject matter of total negativity. 

"That has to change, and we have to create a stable environment that people, if they wish to invest in building and construction in rental, that they know this is the way it's going to be for the next five to six years."

Mr Martin added that the Government will be "going back to the Housing Commission chapter on rental" to examine changes that can be made.

The landmark Housing Commission report recommended that RPZs should be should be replaced with a 'rent reference' system that ties rates to local buildings of a similar quality. Mr Martin confirmed that the coalition is seriously considering this proposal.

While he said it is "very challenging" and would need "significant teasing through" because rents are high, it is a measure that the Government will be "examining".

"We have time to do this, we have until the end of this year to do it, In the sense when I say we have time, the RPZs are due to expire in 2025, you either extend them or you look at what the Housing Commission has proposed, which the Opposition were all in favour of or said they were.

"I know myself from experience, there's a lot more to do on terms of the detail working out of such an idea, and what would it mean for renters and so on. But I think what is essential is that there is a stable environment that people know what market they're investing into, that it's not going to change suddenly in 12 months time," Mr Martin said.

Mr Martin said an average annual target of 50,000 homes in the coming years was pledged by almost every party during the general election, but questioned how opposition parties would meet this target.

"The weakness in the election debate was, how do we get to 50,000 how do we get to 60,000 in 2025. Being honest, I saw nothing in the opposition programmes that suggested anything, I actually thought some of it would delay."