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TÁNAISTE SIMON HARRIS clashed with opposition TDs over the impact incoming changes to tenancy rules will have on landlords and renters today, accusing other parties of “scaremongering” on the issue.
Harris, in turn, was accused of attempting to justify changes to the way rents are governed that may cause increases for some renters.
The row comes after it emerged yesterday that the country’s largest residential landlord, Ires Reit, had told investors that incoming changes to tenancy rules could see a major increase in its rental income.
As first reported by The Journal yesterday morning, the landlord firm told investors that under the new rules, set to kick in this Sunday, they expect an increase in income from their tenancies as they will be able to reset rents to market value between tenants.
Previously, the annual increase of rent for a property was capped at 2% or the rate of inflation, whichever was lower. From this weekend, rents can be set between tenancies or after a six-year period at “market rate”.
Sinn Féin leader Mary Lou McDonald said in the Dáil yesterday that Ires Reit had told investors “that they will be able to increase new rents by a staggering 25%”.
She said: “They’re predicting a 25% potential rental income uplift with minimal added costs. That’s a direct quote.”
Harris said the 25% figure “is not a fair representation at all”, citing an interview with Pat Farrell, Chief executive of Irish Institutional Property on Newstalk this morning, where he described McDonald’s comments in the Dáil as “not correct”.
Speaking on The Claire Byrne Show on Newstalk, Farrell said: “That is a projected figure, it’s over a period of ten years. That is absolutely a complete mischaracterisation of the issue.”
As reported by The Journal yesterday morning, the firm projected that there was potential for the gradual realisation of a 25% “potential rental income uplift with additional minimal costs” as a result of the changes to the rules.
Harris insisted that Sinn Féin had “left out” in yesterday’s Dáil comments that 25% was a projected figure over a period of ten years.
“Let’s not scaremonger people. People’s rents are not increasing by 25%,” he said.
Responding on behalf of Sinn Féin, Finance spokesperson Pearse Doherty said that Harris’ only defence was that “not every renter is going to be hit on day one” with increases.
“The fund made it clear, in black and white to its investors in its conference call, 25% increases. Yes it said it will take a while for that to flow through, but do you not know that every single new renter from Monday on is going to be hit with these increases, and you stand there and justify it,” he said.
“What you need to do now is you need to reverse it or defend why you think it’s appropriate that rents would go up that high.”
Social Democrats TD Cian O’Callaghan also said Harris’s “only defence” of potential rental increases was that “not every renter is going to be affected immediately”.
“It’s not the opposition that made the claim that the rental income of Ires Reit is going to go up by 25% as a result of the changes that your government has made. It is Ires Reit that made that claim,” he said.
“How do you think people are going to be able to pay this increase? Do you not understand that they’re already struggling to make ends meet and to pay their bills?
O’Callaghan said that rather than just adding to housing supply, corporate landlord firms will “snap up more and more homes”.
“Tánaiste, are you so blinded by your craven ideology of giving these corporate landlords whatever they want to ask for that you cannot see the damage that you’re doing?
“Renters in Ireland are already paying some of the highest rents in Europe and are now going to be fleeced even more.”
In response, Harris said that government investment in housing supply “will not be enough to fix the housing emergency” and private investment is also required to stimulate supply.
“We are investing more than ever in housing. We’re investing more than most European countries,” he added.
He said the new rental rules will make it possible for new tendencies to have rents set to market rate, but said they will also provide increased renter protections by securing their tenancy for six years.
There were several interruptions throughout the discussions. Leas-Ceann Comhairle John McGuinness, who repeatedly called for order, described the behaviour as “shameful”.
He invited students watching the Dáil session to write to the Ceann Comhairle and tell her what they made of the politicians’ behaviour.
“My 12-year-old grandchild tells me that when her class behaves the way some behave in this house, they get sent to the principal’s office,” he said.
“Now I don’t know what the equivalent of that would be in the Dáil, but certainly I could pick out a few from this morning and most Thursday mornings that I would love to
send to the principal.”
- With additional reporting from Eimer McAuley.
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