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Opinion: Rent controls ARE a viable option in calming Ireland's housing crisis

Some commentators who dismiss rent controls as being counter-productive are actually talking about rent freezes – an entirely different scheme.

Image: FuzzBones via Shutterstock

MOST PEOPLE TRY to hide away from the housing crisis. Who would want to let anyone know that they have moved back in with their parents as an adult or that they have had to move their children into emergency accommodation?

But log into Facebook any day of the week and the housing crisis is likely to start appearing. It might be in the Renters in Dublin groups, where people post looking for a room, their tone becoming increasingly desperate as it becomes obvious they are willing to take anywhere – no matter the conditions.

Or it could be in the indignant posts shared from Daft.ie of advertisements offering to share a bedroom with three strangers for the sweet deal of €350 per month, living under the stairs, or on a bed that has to be folded away to get to the kitchen.

The problems faced by tenants

According to Census 2011, 18.5% of households in Ireland are now tenants in the private rented sector. Recent research published by the Private Residential Tenancies Board (PRTB) in its report on The Future of the Private Rented Sector shows that 52% of tenants plan to stay in the sector. Even the current Government’s Housing Policy Statement 2011 recognises the role the private rented sector will continue to play.

All Mod Cons? is a photo exhibition brought together by We’re Not Leaving, illustrating some of the problems faced by tenants: illegal deposit retention; homes not meeting minimum standards; lack of security of tenure; and rent increases.

Understanding the problems of the private rented sector is a vital first step but it is also important to ask what can be done for the private rented sector. Our research set out to answer that question and we discovered that plenty can be done.

One possibility is the introduction of rent control.

‘Rent controls’ v ‘rent freezes’

Public debate on regulation has been somewhat lacking, with many media outlets seeming eager to reproduce uncritically the PRTB report conclusions that rent controls wouldn’t work in Ireland. Some commentators and journalists who dismiss rent controls as being counter-productive are actually talking about rent freezes, when rent is not allowed to increase at all. Rent freezes were made famous by their complicated effects on New York City. However, it is disingenuous to discuss rent freezes as rent controls when no one is suggesting a rent freeze.

The PRTB’s report, Rent Stability in the Private Rented Sector, concluded that rent controls would not work in Ireland. But when the report is interrogated even a small amount it becomes clear that the PRTB tested for rent controls in the worst possible scenario; they worked on the assumption of the introduction of rent control with nothing being done to increase supply yet even the most unconnected of governments would not do that. The PRTB also asserted that rent would increase once the market was deregulated again. An obvious solution to that is just not to deregulate.

Critics of rent control rightly point out that when rent is controlled within tenancies, rent is often ‘frontloaded’ and new tenants lose out to sitting tenants. This is why we suggest rent control between as well as within tenancies.

A more stable private rented market

We’re Not Leaving is suggesting something different to the situations the PRTB investigated. ‘Second Generation’ rent controls have been tried and tested around the world from Belgium to Ontario. Ireland could follow the successful model used in Germany, where rent is capped at 15% over three years. This country could also take into account models where the initial rent of a new lease is regulated. In the Netherlands, for example, initial rents are based on a points system, with points gained for square meters, area, local amenities, etc.

Rent control can lead to a more stable private rented market. It’s not just tenants that benefit. Advantages for landlords include the security of income that comes from having rent control, and lower transaction costs because tenants stay longer and have more security of tenure when not faced with economic evictions.

Rent control alone cannot solve the problem. It must be introduced alongside the long-promised deposit protection scheme, increased security of tenure, the enforcement of minimum standards, and a response to the issue of supply by the State. With the PRTB’s finding that 29% of landlords want to get out of the sector as soon as possible, it is obvious that we cannot continue to rely on private landlords to solve the lack of supply. The necessity of State intervention is made even more clear in the PRTB’s finding that 32% of households in the private rented sector are in receipt of rent supplement. The Government must look to all possible mechanisms, including social housing and housing associations.

We cannot continue to watch the private rental sector spiral out of control, and out of reach for far too many people, creating havoc in communities and the economy. It is time for a real, informed and un-prejudiced public debate on regulating the private rental sector.

Aideen Elliott received a Master in Anthropology of Development from SOAS, University of London in 2013. Áine Mannion read for a Master of Studies in Global and Imperial History in 2013. Both are organisers with the We’re Not Leaving campaign, which can be followed on Twitter using @WNLireland.

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About the author:

Aideen Elliott and Áine Mannion

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