Under new proposals going before Cabinet next week, rents for newly constructed homes will no longer be limited to a 2% annual increase but will instead be linked to inflation rates, reports RTE.
Housing Minister James Browne is set to present changes to the Rent Pressure Zones (RPZs) to the Government on Tuesday.
The proposed shift is intended to offer more financial certainty to investors, who may currently face losses when inflation exceeds the 2% cap, reports RTE.
Additional measures to address the “yield” gap and improve “viability” are expected from the Government in the coming weeks and months.
For tenants who remain in their current rental homes, there will be no changes to their rent terms.
However, if a tenant moves, landlords will be allowed to set the rent at market rates for the new occupant, reports RTE.
After that, annual rent increases would again be capped at 2% under existing rules.
Upcoming legislation will also include safeguards for new renters.
This will ensure a minimum six-year period of tenancy security, reports RTE.
This is being described within Government circles as a major breakthrough, marking the first time no-fault evictions are effectively ended in Ireland.
At the end of each six-year tenancy term, landlords can reset rent to market rates, reports RTE.
From then, annual rent increases will be limited to 2% under the RPZ framework.
Taoiseach Micheál Martin noted that the Housing Commission had recommended a revamp of the current system.
He described the proposals as well-balanced and said they are just one part of a broader strategy to achieve the level of housing development the country needs, reports RTE.
Mr Martin said these plans will provide stronger tenant protections and greater certainty for investors.
He added that the overall package will offer the stability and assurance necessary for people to invest in housing, reports RTE.
Minister of State for Migration Colm Brophy said he expects the Government’s housing plan will be unveiled before the Dáil’s summer recess in July.
Appearing on RTÉ’s The Week in Politics, he said the announcement is due “very shortly” and has involved “a substantial amount of work”, reports RTE.
“Government wants to see this rolled out so that we can reach our targets. Government will roll it out very, very soon,” he said.
The minister added that the “ultimate protection” for tenants is to increase housing supply and build more homes, reports RTE.
People Before Profit-Solidarity TD Paul Murphy criticised the plans, saying rents in Ireland have doubled over the past decade and are now “completely unaffordable”.
He advocated for direct public investment and the creation of a State-run construction company, reports RTE.
“For every home that’s build by private corporations in this country, they’re taking about €70,000 out in profit. The State needs to do this directly,” he said, reports RTE.
Mr Murphy said the new measures will worsen the situation for renters and will promote further rent increases.
“This is what they’ve already been doing, they’re effectively doubling down on a failed strategy and the only people it will work for is the corporate landlords and private developers who are currently already making a killing and want to make even more,” reports RTE.
Sinn Féin TD Louise O’Reilly accused the Government of failing to seriously protect renters or ensure access to affordable housing.
“They are very serious about incentivising developers and big business but that is not going to help people who are stuck in their parents’ back bedroom,” she said, reports RTE.
Ms O’Reilly added that people are being pushed into homelessness because of unaffordable private rents.
“Evictions are going up. The only protection that renters had was an eviction ban, the Government lifted that,” reports RTE.
“They promised protections for renters that didn’t happen.
“The only other scheme that in any way prevents homelessness is the tenant in situ scheme and they have effectively closed that by cutting the funding to it,” reports RTE.
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