Gavan Reilly: Only one month in, and already out of ideas on housing

On his first jaunt back to Brussels on Monday, Micheál Martin found himself (metaphorically) walking backwards a bit. In two interviews over the weekend, with the Irish Examiner and RTE’s This Week programme, the re-new Taoiseach had suggested that the Government’s response to underwhelming housing delivery in 2024 might necessitate getting rid of ‘rent pressure zones’ (RPZs).

It wasn’t an easy comment to walk back. In both interviews, the Taoiseach had openly touted the idea of replacing RPZs with some other kind of rent control measure, like forcing landlords to link the new rent to the existing amounts paid by others in the locale.

RPZs are imperfect tools but they sort of work. All of Meath has been a rent pressure zone since March 2019 at least; that means that rent can only be increased by a maximum of 2% (pro rata) each year. Given the acute shortage of accommodation out there, it’s fairly probable that most landlords would have raised the rents by more if they could. If the existing tenants wouldn’t pay it, someone else would.

But scrapping RPZs – apparently in a bid to attract new capital, and new properties into the market – presumes there are empty homes out there that a landlord won’t offer because the rent’s not high enough. That in itself is a faulty argument: even under existing laws on RPZs. a property can have its rent increased by more than 2% of it’s been renovated or if it’s been out of the market for two years.

The idea of replacing them with a link to the local market rate doesn’t work either. We’ve already had that, in law, for most of this century. Spoiler alert, it didn’t achieve anything: the ‘market rate’ is, by definition, merely the amount that some individual renter is prepared to pay for property. What’s more, because RPZs have done a reasonable job from stopping rents spiralling out of control, the presumptive empty properties won’t be any more lucrative than they already are.

All of this is just a month after the coalition adopted a programme for government which committed to improving the effectiveness of RPZs in the first place, echoing language in the two parties’ manifestos. Yet, apparently spooked by housing delivery falling in 2024, it’s now back to the drawing board.

That’s the bit that ought to worry people. Most punters won’t have thought too favourably of Darragh O’Brien’s tenure but, if he had been reappointed as Minister for Housing (as he had publicly hoped to be!), he wouldn’t have had to learn the ropes. New ministers, especially those who have not served in individual departments before, have a horrendous time trying to get to speed with new systems.

Now we not only have a new minister, in James Browne, but apparently a blank slate when it comes to policy too – and no real sense of how we fix the problem.

And in truth: given how high Irish rents already are, and the scarcity of alternative options, Ireland is already a cash machine for an institutional property fund. Why on earth do we think they need more incentives?