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Housing Crisis

'I hope it works': Two-year rent freeze to tackle housing crisis

The government has announced a new package of measures it hopes will tackle the long-running housing crisis.

Updated 3.55pm 

LANDLORDS WILL BE barred from increasing residential rents for two years under new plans to tackle the housing crisis announced by the government today.

Property owners will also be required to give longer notice to tenants of rental increases or eviction as part of long-awaited proposals announced by ministers Alan Kelly and Micheal Noonan.

“I hope it works,” Finance Minister Noonan said today as the government ended weeks of speculation and infighting over measures to tackle soaring rents and lack of housing supply.

The increase in the rent review period will mean that anybody whose rent has been increased this year will not face another hike until 2017. This 24-month review period will be in place for four years before it reverts back to 12 months.

“Legislation will require 24 months between all rent reviews, in what is among the most signifiant overhaul of tenants’ rights in the state,” the government said today.

0100 Tenancy sustainment protocol copy Ministers Kelly and Noonan meeting Phibsboro resident Owen Wellan today Sasko Lazarov Sasko Lazarov

It’s also been confirmed that the amount of notice a landlord must give a tenant of a rent increase will be extended from 28 days to 90 days.

The Private Residential Tenancies Board (PRTB) will be given new powers to ensure landlords inform tenants of their rights.

Evidence of a landlord’s justification for any rent increase, such as the market rent for similar dwellings in their area, must be provided to the tenant.

Other initiatives being rolled out include:

  • Landlords will have to give a ‘statutory declaration’ of their intent to sell or use the home for a family member if evicting a resident. 
  • They will face fines for breaching these declarations. 
  • Landlords who house social tenants will get 100% mortgage interest relief under measures being introduced in the Finance Bill. 
  • Development levies for homes sold for less than €300,000 will be abolished in some areas, such as Dublin and Cork. 
  • The abolition will only apply for three years before vacant sites are subject to a charge to encourage builders to build on vacant sites. 
  • Housing assistance payments (HAPs) are being increased in Cork, Galway, Kildare and Meath where there will be flexibility for a 20% increase on top of rent supplement limits.
  • In Dublin, families in emergency accommodation will be allowed a HAP increase of up to 50% above rent supplement limits.

In a blow to Environment Minister Kelly, his initial plan to link rent increases with the level of inflation for a three-year period – known as rent certainty – was vetoed by Noonan in recent weeks.

0044 Tenancy sustainment protocol copy Sasko Lazarov Sasko Lazarov

However, Kelly said today these measures amount to rent certainty for landlords and tenants, insisting it is a “comprehensive package” that he is happy with. Noonan said it would provide “security of tenure for tenants”.

There have been calls by a number of housing and construction industry groups for the government to get ahead of the crisis, with little being offered in last month’s Budget, other than the announcement of the construction of modular homes in parts of Dublin.

Ahead of today’s annoucement, Ibec group Property Industry Ireland, called for government to create a cabinet minister for housing.

“Creating a senior ministerial housing portfolio would create some much-needed leadership in this policy area. It would also help demonstrate a commitment from government to the speedy resolution of the crisis in the Irish housing system,” said PII director Dr Peter Stafford.

He said at least 25,000 new homes need to be built each year to meet demands. At present, just half of that are being built, he said.

- with reporting from Christina Finn 

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