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Threshold cautiously welcomes Minister’s comments on replacing Rent Pressure Zones

11 January 2021

But charity stresses that rents will only become affordable by increased building by the State

National housing charity Threshold has today welcomed comments from the Minister for Housing, Darragh O’Brien on a proposed review of the Rent Pressure Zone legislation. Threshold acknowledges the Minister’s commitment to consider a system which would link rent increases to the Consumer Price Index (CPI), but believes that this should be implemented in tandem with a commitment to increase State housebuilding.

CEO of Threshold, John-Mark McCafferty said: “We welcome the prospect of rent increases being linked to the Consumer Price Index, which is a proposal that has the support of academics, housing charities and political parties of various hues. Our belief is that, if increases in rents are to be linked to the CPI, any increases should be subject to an overall percentage limit and this should be applicable to every village, town and city the length and breadth of the country, rather than concentrating new rent control measures in areas with a high level of demand and a low level of supply. As with any such regulations, enforcement is key.

“While we are open to a form of rent control that links rent increases to the CPI, it is Threshold’s stance that the most viable and long-lasting mechanism to stabilising Ireland’s housing sector is through the increased role of, and investment by, the State in building housing, as committed to in the Programme for Government. This means increasing the stock of housing owned by the Local Authorities and Approved Housing Bodies which, according to Threshold’s analysis, should equal 25% of total housing stock by 2040. This will exert downward pressure on private rents. While the Programme for Government commits to building 50,000 homes over the next five years, Threshold is asking the Government to set the more ambitious target of 75,000 homes over five years, to work towards a more substantial share of housing stock by 2040.

“In the immediate term we would urge the Minister to consider a moratorium on upward rent reviews, similar to what was done in 2015, to give tenants some breathing space, particularly at this time of uncertainty and upheaval for those whose jobs and futures remain uncertain.”

Chairperson of Threshold, Aideen Hayden said: “The Minister’s comments accord with our long-standing position that rent increases should be linked to the CPI or a similar index. Threshold advocated for such a measure over twenty years ago, at a time when rents increased by 14.6%, which was more than five times the increase in the CPI. Rent Pressure Zones are a crude index. While they have been of some value, we have always maintained – and as the Minister has pointed out – regular renters do not get salary increases of 4% per annum. The Minister’s commitment to stronger protections is to be welcomed, though we acknowledge that his proposals are at an early stage.

“The Minister has also hit the nail on the head around single people and homelessness. We continue to build far more 3-4-bed homes, proportionately, to the number of single households on the housing list, which means they always get the less-secure option of the private rented sector, if they get an option at all. His commitment to Housing First is also welcomed – we strongly fought for its inclusion in the Programme for Government in 2011 and have always championed the approach that the answer to homelessness is a home as a first response, with supports tailored to the individual’s needs within the community, not homelessness services delivered in congregated settings with a home at the end, almost as a reward for good behaviour.

“Of course the answer for all is a secure home, which won’t be met without a robust housing construction programme and indeed, the retrofitting of some of the extremely poor-quality housing that is out there now. We would be delighted to meet with the Minister to discuss our views.”

Threshold’s helpline remains available Monday to Friday, 9am to 9pm at 1800 454 454, and via its website at https://www.threshold.ie/advice/help for any renter in need of advice or support.