Redesignating rent pressure zones?

Zab

The 2016 Act says

http://www.irishstatutebook.ie/eli/2016/act/17/enacted/en/print#sec36 wrote:

the Minister shall by order prescribe the area as a rent pressure zone for a specified period not exceeding 3 years

Does the current legislation allow these zones to be redesignated as pressure zones at the end of the three years, or would that require further legislation?

Fian

yes, no need for further legislation, they can be redesignated for a further period of three years and that can be repeated as long as the statutory test is met. So after three years (or far more likely before the expiry of three years) the RPZs will be renewed.

Zab

Thanks Fian.

The_Conductor

Fian wrote: »

yes, no need for further legislation, they can be redesignated for a further period of three years and that can be repeated as long as the statutory test is met. So after three years (or far more likely before the expiry of three years) the RPZs will be renewed.

They cannot be designated as such for a period exceeding 3 years in duration- and a formal report on the operation of the RPZ would have to be submitted by the Housing Authority after the elapse of the defined period to the Minister- before a new designation could be applied to any given area.

It was designed in this manner- as the legal opinion was that it was skating on thin ice regarding property rights- however, having it as a short term measure for a prescribed period of time- it was unlikely to be challenged. The advice to the Minister was he required proper legal advice before renewing any designation- regardless of the duration.

It is expected that a consolidated version of the RTA will be published in late 2018, containing a number of amendments and new measures- however, it is not at this time expected to change the wording as it pertains to RPZs from the 2016 regulation (so depending on the date an RPZ was applied- it potentially could lapse on the 24th December 2019, 3 years and 1 day after the commencement date of the Act.

If RPZs are to be extended- it will be under SIs other than the primary legislation.

murphaph

If they aren't successfully challenged by a REIT or other wealthy landlord before then. If there's any sign of them being extended indefinitely you'd imagine a challenge would be inevitable given the money involved.

Heisenberg.

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The_Conductor

Heisenberg. wrote: »

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The Minister is already on the record stating that landlords whose property 'is significantly below open market rates for a given RPZ will be allowed to increase it to market rates'. There is no indication (thus far) how the Minister intends to facilitate this happening- other than allowing the RPZs to lapse. If the RPZs do lapse- the refrain will be it was the action of a different government......... Come on, we've been there before, we'll be there again......... Its politically expedient to leave it this way..........

murphaph

The_Conductor wrote: »

The Minister is already on the record stating that landlords whose property 'is significantly below open market rates for a given RPZ will be allowed to increase it to market rates'. There is no indication (thus far) how the Minister intends to facilitate this happening- other than allowing the RPZs to lapse. If the RPZs do lapse- the refrain will be it was the action of a different government......... Come on, we've been there before, we'll be there again......... Its politically expedient to leave it this way..........

I don't suppose you have a link to that quote from the minister? (Coveney?). To me that's a blatant admission that the way they introduced it was grossly unfair.

The_Conductor

murphaph wrote: »

I don't suppose you have a link to that quote from the minister? (Coveney?). To me that's a blatant admission that the way they introduced it was grossly unfair.

Yes, it was Minister Coveney- I'll have a hunt around and see if I can attribute it properly.

jimmycrackcorm

murphaph wrote:

If they aren't successfully challenged by a REIT or other wealthy landlord before then. If there's any sign of them being extended indefinitely you'd imagine a challenge would be inevitable given the money involved.

Is expect to see a legal challenge after renewal on the basis that the government is issuing short term legislation to bypass property rights when the intention is exactly that by continually doing so without sufficienct regard to addressing the underlying issue.

There are no indicators that anything would be different after renewing for another three years.

Heisenberg.

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murphaph

Heisenberg. wrote: »

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You're just so wrong here. It is completely UNFAIR on those landlords who did not gouge their sitting tenants and who kept rents below market rates for them.

Don't you understand that?

There was NO MECHANISM to allow these landlords to adjust their rents to market rates before the RPZs were introduced. There was NO MECHANISM to even allow these landlords a one time adjustment to market rates when a sitting tenant left.

It's the most unfair piece of legislation I know of. I suspect this particular part of it (different landlords getting locked into wildly differing baselines for IDENTICAL properties next door to each other) is the part of the legislation most open to challenge.

Heisenberg.

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murphaph

Heisenberg. wrote: »

The way in which these laws were brought in is a separate argument.
My point was that RPZs can't be removed without some other measures to counter act them in the current rental environment. It's an absolute omnishambles in Dublin at the moment when it comes to renting.

Inflation is at 0.4% so a 10x annual increase on that is still more than fair.

Please stop saying there was anything fair about RPZs.

They way the legislation was brought it is most definitely not a separate argument.

thereality

Heisenberg. wrote: »

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A great measure would have been the state building vast quantities of housing. Instead the state has done jack and people like you think the solution for them is to do not much more other than pretend rent control is working

In fact rent control has made the housing crisis worse. People are refusing to give up cheap rent controlled housing that is too big and landlords are selling up as their properties are under the market rate

Heisenberg. wrote: »

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Im sorry but what does the price of eggs, bus tickets and iPhones got to do with cost of running a rental property? The CPI has nothing to do with the price of running a BTL property. Who cares if inflation is 0% tomorrow, if a landlord on a variable rate mortgage gets their rate hiked up to 8% by a vulture fund who bought their mortgage? The price of running a property could triple tomorrow and the landlord will only be allowed to adjust their prices to random unrelated goods

Do you understand what the term fair means? What exactly is fair about letting about letting nearly every business operate in this state without a price control and then force is on a single industry? In fact, discriminating against landlord by making them have price controls is a perfect example of unfair

Zab

Heisenberg. wrote: »

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It was specifically pointed out to you where the RPZ was clearly unfair, even if you agree with the general thrust of it. You can't simply just ignore this.

thereality wrote: »

A great measure would have been the state building vast quantities of housing. Instead the state has done jack and people like you think the solution for them is to do not much more other than pretend rent control is working

The state can just magic up vast quantities of housing?

Im sorry but what does the price of eggs, bus tickets and iPhones got to do with cost of running a rental property? The CPI has nothing to do with the price of running a BTL property. Who cares if inflation is 0% tomorrow, if a landlord on a variable rate mortgage gets their rate hiked up to 8% by a vulture fund who bought their mortgage? The price of running a property could triple tomorrow and the landlord will only be allowed to adjust their prices to random unrelated goods

Do you understand what the term fair means? What exactly is fair about letting about letting nearly every business operate in this state without a price control and then force is on a single industry? In fact, discriminating against landlord by making them have price controls is a perfect example of unfair

You can't pretend that inflation has no bearing on this. Also, the only thing "unfair" about this is that it came in after people had become landlords. It doesn't matter what other rules other markets run under, that's meaningless in this context. It would be like arguing that it's unfair that I can't sell air to air missiles because other people can sell milk.

The rental market should never, and most likely will never, be treated like other markets. This applies even if you think the current RPZ rules go too far.

The_Conductor

Heisenberg. wrote: »

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HICP (harmonised rate of inflation) was 0.5%, 0.8% in Jan and is trending upwards rapidly (on the back of large increases in energy costs kicking in).
The ESRI have already offered emergency advice with respect of inflation shooting up here.

The issue with housing- is supply- pure and simple.
The current tinkering with RPZs, social housing, homelessness to jump the queue, forever homes etc etc etc- is a complete smokescreen which detracts from the unfortunate reality- we are not building sufficient numbers of homes- and those that we are building- are increasing not where they should be built.

The RPZs were sold as a short term solution to address racing rental prices.
They haven't though- they have failed.
We don't need to redesign RPZs- we critically need to bring additional supply on stream.

The one element that the government implemented that has made a small difference- is hiking the rent-a-room level to 14k. I'd argue it should be further increased- and I'd also argue that there has to be some balance brought into legislation.

The Minister had suggested we had a wonderful quick solution to our housing problem- there were tens of thousands of vacant properties nationally (helped by CSO statistics of properties that didn't return their censuses). All this serves is to highlight that the CSO bolloxed up the census by not making a sufficient effort to ensure all properties returned their census papers.

Supply is the solution- not RPZs- supply...........