Coveney announces 'rent pressure zones' in Dublin and Cork

Coveney announces 'rent pressure zones' in Dublin and Cork.

Plans to limit how much landlords can increase rents in designated areas have been announced by the Minister for Housing.

Simon Coveney outlined his plans for rent pressure zones to Cabinet this morning.

Rent pressure zones are being introduced with immediate effect in the four Dublin Local Authority areas and in Cork city.

Rent increases in these areas will now be capped at 4% a year for the next three years.

The proposal comes amid debate that rent increases or reductions should be linked to the consumer price index while others oppose intervening in the market.

The last report from the Residential Tenancies Board showed that rents are still rising.

In the third quarter of 2016, monthly rents grew by 2.3%, although this is marginally slower than the previous three months.

A recent survey by the Simon Community also found that 80% of the rental properties available that it reviewed, were beyond the reach of people receiving State housing benefits.

Mr Coveney’s proposals on the rental sector examine key areas, including supply and rent security and include 'Build to Rent' developments, the accelerated roll-out of 'Repair and Leasing' as well as 'Buy and Renew' initiatives to bring unused capacity back to the market.

The Residential Tenancies Board will review the existing rent pressure zones and examine whether new ones should be introduced.

In terms of designating other areas as rent pressure zones, the board will look to see if areas are experiencing high rent increases over four of the last six quarters and make a recommendation to the minister.

In all areas that are not designated rent pressure zones, landlords will still only be able to raise rents every two years.

Housing charity Threshold, which launched its annual report earlier, said there has been a 26% rise in cases of rent increases nationwide.

It said hundreds of people contact it from around the country every day with stories of rapidly rising rents and difficulty finding affordable housing.

Launching its annual report for 2015, the charity said there was a 54% increase in the number of people calling its helpline.

Threshold says one in five households are in private rented accommodation in Ireland and disproportionate rent rises are pushing hundreds of families into homelessness at an accelerated rate.

The Residential Landlords Association says the measures would be very difficult to implement while Threshold is concerned about avoidance of the regulations.

Kelly says plans will not provide certainty

Former housing Alan Kelly said Mr Coveney's plans will not provide rent certainty.

Speaking on RTÉ's News at One, Mr Kelly said the scheme would allow a 4% yearly rent increase over three years in Dublin and Cork - well above inflation and the consumer price index.

Mr Kelly added that it will be difficult to administer the plans, describing it as a bureaucratic nightmare.

He said he does not believe Fine Gael want to deal with rent certainty, saying the plans amount to "a hotchpotch way of trying to do something."

He said there are huge rental issues across Ireland, adding that it does not make sense why Dublin and Cork are the only cities being looked at.

Source : RTE 13/12/2016