To ask the Minister for Housing; Planning and Local Government his plans to review and expand the rent pressure zone system; and if he will make a statement on the matter.
For an area to be designated a Rent Pressure Zone, it must satisfy the following criteria set out in section 24A(4) of the Residential Tenancies Act 2004 (as inserted by section 36 of the Planning and Development (Housing) and Residential Tenancies Act 2016):
(i) The annual rate of rent inflation in the area must have been 7% or more in four of the last six quarters; and
(ii) The average rent for tenancies registered in the area with the RTB in the last quarter must be above the average national rent (the National Standardised Rent in the RTB’s Rent Index Report) in the last quarter (€1,054 per month in Q4 2017).
My Department has conducted a review of the Rent Predictability Measure on the basis of the Residential Tenancies Board (RTB) rent data and a public consultation on the operation of the Rent Pressure Zones. In September 2017, arising from the review findings, I announced a number of measures to further strengthen the effectiveness of the rent setting and rent review laws, including the implementation of a change plan to develop and strengthen the role of the RTB, particularly with regard to enforcement.
These measures include the intention to make it an offence to increase rents in contravention of the legislation and to provide the RTB with the necessary powers and resources to protect tenants from illegal rent increases. These changes will strengthen the impact of the Rent Predictability Measure and should contribute to a further slowing in the growth in rents, in tandem with increasing supply.
The Government has given priority to the drafting and early publication of a Residential Tenancies (Amendment) Bill to address these and other urgent reforms in the residential rental sector.
The Residential Tenancies Board’s latest quarterly Rent Index Report for Q4 2017, which was published in March, shows reductions in the rate of rental inflation across both national and Dublin rents. The slowdown in the quarterly growth rate in Dublin rents to 1.1% in Q4 2017 is particularly noteworthy, bringing the annualised growth rate over 2017 to 5.2%, a drop from 8% in the year to Q3 2017. Significantly, this 5.2% increase for Dublin is the lowest annual growth rate since 2013. This latest quarterly index provides evidence that the introduction of the RPZs, in December 2016, is having a positive effect on rent inflation, particularly in Dublin.
The RTB Rent Index Report also includes a summary of the data used as the criteria for designating Rent Pressure Zones in relation to all Local Electoral Areas in the country. This allows everyone to see exactly where their area stands in relation to average rent levels and increases and possible designation.
The Housing Agency continues to monitor the rental market and may recommend further areas for designation. Where, following the procedures set out in the Act, it is found at a future date that additional areas meet the criteria, they will be designated as Rent Pressure Zones. However, at present, I have no plans to expand these measures further.
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