Any strategy attempting to satisfy competing and even conflicting interests is never going to please everybody. The question is can this Rental Strategy, as it attempts to meet the needs of landlords and tenants in an increasingly dysfunctional market, work?
Minister for Housing Simon Coveney said he was uncomfortable with the idea of intervening in the private rental market at all, describing the move as "counter intuitive". He promised the plan would "take account of viability for landlords as well as viability for tenants".
He conceded, however, non-intervention was not an option. The Government, he said, could not leave the crisis to a market which – in the absence of significant new housing supply over the past eight years – has brought sky-rocketing rents , and the worst homelessness crisis in decades.
The centre-piece of the strategy is immediate intervention to halt massive rent increases in Dublin and Cork city. Existing tenancies in these 'rent-pressure zones' will be subject to maximum increases of 4 per cent a year for the next three years.
Welcome as these will be to an estimated 150,000 households in Dublin (131,5151) and Cork city (17,985) they still represent significant increases.Average rents in Dublin under the strategy will increase by €171.68 to €1546.68 per month – or by €2,060 per year.
In addition, new properties will not be subject to the 4 per cent cap, in an effort, said Mr Coveney to incentivise new landlords.
Acknowledging the call by many that rent increases should be pegged to the consumer price index, the Minister said this would amount to a “rent cap”, something that could lead to a mass exodus from the sector by private landlords, and “a significant disincentive for people who want to enter the landlord market”.
Private sector tenants in Dublin and Cork will see some relief in this strategy. However, the more than 1,000 homeless families in hotels are not about to access affordable homes in the sector, under this strategy. Simply put, there are too many households looking for homes in the private rented sector.
That pressure will only be relieved when there are more options for families. As the children’s charity Barnardos pointed out on Tuesday, ultimately only “greater availability of social and affordable housing” will deliver this.
