Rent reform needs to protect tenants without strangling construction incentives

Rent reform must include a measured evolution of the rent pressure zone system that works for tenants and landlords alike

What, then, might the future of rent regulation look like? The answer lies as much in political realities as in economic theory, writes Michael Byrne

For years, rent pressure zones (RPZs) have served as Ireland’s tool to rein in runaway rents. Data tells us that properties inside these zones enjoy controlled, predictable increases, while those outside face rapid escalation. 

However, this isn’t a picture of pure success. Rents for new tenancies even within the zoned areas are, on average, 15% higher than for existing tenancies. Meanwhile, research indicates that the regulations — especially after the 2% cap introduced in 2021 — have pushed more small-scale landlords out of the market, and they may also have played a role on the decline in apartment construction in 2024.