Should Rent Pressure Zones be abolished?

DubCount

Rental inflation does not appear to be a problem at the moment. It doesn't look like an issue for at least the short term.

So are Rent Pressure Zones still needed? Are they now hindering rent decreases or are they still protecting a wave of rents which are below market value?

Victor

For someone on an 'old' rent, there may still be a substantial difference between that and a market rent, even if market rents are down.

In the coming months, it is quite possible that market rents will return to what they were in January.

Bigmac1euro

They need to keep some kind of a cap.
Whilst it’s not a great solution it’s something to help people that are renting.
They should divide the country into districts and Dublin into districts imo and you can only charge maximum per square meter unless done to extremely high standard
They should also cut the tax landlords get charged in half.

This will all never happen though.

Manion

Bigmac1euro wrote: »

They need to keep some kind of a cap.
Whilst it’s not a great solution it’s something to help people that are renting.
They should divide the country into districts and Dublin into districts imo and you can only charge maximum per square meter unless done to extremely high standard
They should also cut the tax landlords get charged in half.

This will all never happen though.

These seems like really bad policy idea. What would the knock on affects be of giving such a large tax incentive to landlords? A maxium per square meter charge would quickly become the default charge are remove incentives to improve housing stock. Set that figure too high and you'd price out the bottom of the market, too low and you'll fail to meet the needs of certain parts of the market.

The latest daft.ie report suggests RPZ are discouraging landlords from reducing rents during this period, which makes sense given the policy is designed to create back pressure against rent changes. As predicted at the time there are winners and losers to this policy.

Bigmac1euro

Manion wrote: »

These seems like really bad policy idea. What would the knock on affects be of giving such a large tax incentive to landlords? A maxium per square meter charge would quickly become the default charge are remove incentives to improve housing stock. Set that figure too high and you'd price out the bottom of the market, too low and you'll fail to meet the needs of certain parts of the market.

The latest daft.ie report suggests RPZ are discouraging landlords from reducing rents during this period, which makes sense given the policy is designed to create back pressure against rent changes. As predicted at the time there are winners and losers to this policy.

Remove the caps then.
Let the market decide.
Seems to have worked before.

Manion

As a landlord I would rather keep the RPZ in place as it reduces competition.

Manion

Manion wrote: »

As a landlord I would rather keep the RPZ in place as it reduces competition.

Ironically, the RPZ legislation seems to have greater success on keeping rents high when they should be lower, than keeping rents lower when they should be high. Go figure.

Smouse156

Dav010 wrote: »

Ironically, the RPZ legislation seems to have greater success on keeping rents high when they should be lower, than keeping rents lower when they should be high. Go figure.

I think a double solution is required.

1) Landlords who reduce rents should be able to increase them at a rate of 10% until they regain the previous high (signed on a long term lease 1 year minimum). Therefore landlords wouldn’t be reluctant to drop rents and it would screw REITs who love empty apartments as their competition would have more flexibility. A REIT asking €3500 for an apartment that has never rented can’t increase rent at 10% as it never realised those prices.

2) A vacant home tax similar to Toronto (1.25% of the home value of the property is empty for 6 months per year) which would force landlords to rent their units for the market rates and again screw REITS who are happy to sit on hundreds of empty overpriced apartments trying to manipulate the market.

Manion

Dav010 wrote: »

Ironically, the RPZ legislation seems to have greater success on keeping rents high when they should be lower, than keeping rents lower when they should be high. Go figure.

Yeah, it's almost like housing is this complex issues requiring well thought out policies that work together in multiple scenarios with care given to avoid unintended consequences.

Rent Freeze and Rent Caps may well be the next policy proposal, as there aren't countless examples of such being really regressive.

Manion

Smouse156 wrote: »

I think a double solution is required.

2) A vacant home tax similar to Toronto (1.25% of the home value of the property is empty for 6 months per year) which would force landlords to rent their units for the market rates and again screw REITS who are happy to sit on hundreds of empty overpriced apartments trying to manipulate the market.

Excellent. What about elderly people in care homes? Should they be taxed if their PPR is empty? Who pays for getting the property up to a standard suitable to rent? Apologies if you meant some vacant homes and not others vacant homes, what criteria would you apply?

Smouse156

Manion wrote: »

Excellent. What about elderly people in care homes? Should they be taxed if their PPR is empty? Who pays for getting the property up to a standard suitable to rent? Apologies if you meant some vacant homes and not others vacant homes, what criteria would you apply?

Considering many elderly in care homes are discentivised from renting their homes due to the Fair Deal scheme, naturally we need a few criteria.

However, given that Toronto had an even worse rental crisis than Dublin, taking some solutions from there wouldn’t be the stupidest thing to do!

I’m basically saying homes like those looking for delusional rents (Capital Dock, Quayside Quarter, Opus etc) and landlords that can’t seem to grasp that the market goes down as well as up should be the “targets”.

Clearly the elderly who never put their homes up for rent are not the people I’m talking about, however, some incentives for those people to consider renting out their homes would be a good idea as well.

Manion

OK, so some combination of incentives and punitive action. Still not sure who pays for getting houses up to standard but we're making progress.

How would you determine a property is vacant? ESB Connections maybe? Seems easy to work around that one.

Since you mentioned Toronto, I did a quick search and it seems the dynamics of their housing sector are very different when compared to Ireland. Might be counter productive to cherry pick policies out of an egosystem.

Graham

Smouse156 wrote: »

landlords that can’t seem to grasp that the market goes down as well as up

Daft isn't it. It's as if there's some sort of government intervention that penalises landlords who drop rents.

Smouse156

Manion wrote: »

OK, so some combination of incentives and punitive action. Still not sure who pays for getting houses up to standard but we're making progress.

How would you determine a property is vacant? ESB Connections maybe? Seems easy to work around that one.

Since you mentioned Toronto, I did a quick search and it seems the dynamics of their housing sector are very different when compared to Ireland. Might be counter productive to cherry pick policies out of an egosystem.

Would you like to elaborate on those dynamics? Even as the most basic level, targeting properties listed on Daft for rental which are not moving due to being overpriced is surely a good idea?

Or maybe we should do nothing? Leave the Landlord party (Fine Gael) in power forever? Keep useless land prices sky high for vested interests so nothing can be built that’s affordable and then wonder why all the young people emigrate???

I suppose that’s been the way things have gone since 1840 so why change? Personally I have a son and I would like to see him and his generation afford a home down the road (even if it means my home won’t be ridiculously overpriced) rather than emigrate as me and all my siblings did and most of my friends when faced with the choice of rent slavery Dublin.

Das Reich

Why not abolish rent tax, that on the end of the day is not the landlord that is paying but the tenant.

DubCount

Das Reich wrote: »

Why not abolish rent tax, that on the end of the day is not the landlord that is paying but the tenant.

There are some elements of the tax system that are unfair on LLs, but in general I believe tax should be for everyone - including LLs, and including REITs for that matter.

RPZs though are now doing more to keep rents high than keep them low. I think renters would benefit from them being abolished at this stage.

Manion

Smouse156 wrote: »

Would you like to elaborate on those dynamics? Even as the most basic level, targeting properties listed on Daft for rental which are not moving due to being overpriced is surely a good idea?

Or maybe we should do nothing? Leave the Landlord party (Fine Gael) in power forever? Keep useless land prices sky high for vested interests so nothing can be built that’s affordable and then wonder why all the young people emigrate???

I suppose that’s been the way things have gone since 1840 so why change? Personally I have a son and I would like to see him and his generation afford a home down the road (even if it means my home won’t be ridiculously overpriced) rather than emigrate as me and all my siblings did and most of my friends when faced with the choice of rent slavery Dublin.

I'm not convinced you're genuine since all I had to search for was a Toronto house policy to get a link to their housing plans.

https://www.toronto.ca/city-government/planning-development/official-plan-guidelines/housing/

https://www.cbc.ca/news/canada/toronto/toronto-city-council-housingto-2020-2030-action-plan-1.5400343


There are no easy answers and it might be comforting to blame Fine Gael or the British but housing is a touch issue throughout the world. Toronto doesn't have it cracked. I'm not sure why the choice is between doing nothing and doing something half baked? It feels like every time there is a well intention intervention in the house market by the government it has major unintended consequences. The policies your propose would only further restrict supply and increase rental costs.

Pkiernan

Smouse156 wrote: »

2) A vacant home tax similar to Toronto (1.25% of the home value of the property is empty for 6 months per year) which would force landlords to rent their units for the market rates and again screw REITS who are happy to sit on hundreds of empty overpriced apartments trying to manipulate the market.

Also a vacant bedroom tax on people who choose not to rent out spare rooms.
After all theresca homeless crisis.

tenet

if the unit is vacant it needs 2008 standards to be let if not how do you force lls or reits to make good.
There is already a property tax liable to LLs with no tax allowance even though revenue recognize this should be allowable.
Rental is is taxed high for small LLs and not for reits crazy.
So if FG are the LL party what is SF the no LL party especially since they own more houses (22) than all the other parties together.
start by getting rid of the 70 homeless charities in dublin and setup a state housing body with 1 offer or bottom of the list tackle under used council properties

Melanchthon

Manion wrote: »

Excellent. What about elderly people in care homes? Should they be taxed if their PPR is empty? Who pays for getting the property up to a standard suitable to rent? Apologies if you meant some vacant homes and not others vacant homes, what criteria would you apply?

I think it wouldn't be impossible if one went in with the mindset to make it work rather than a mindset of delibrately proposing something that would be unpopular.
For example allow both a primary residence and a secondary residence to be vacant per individual.
Work with the tenancies board and ESB to work out vacancies, examine company accounts when they go through a revenue audit-actually simply make it a requirement for a landlord/riet etc to declare all units that are available to rent, in the case of big holders examine how many properties they list in portfolios and how many were on their planning declarations, if properties were listed as short term rentals that would be on planning/ zoning declarations anyway I think.
When it comes in have a revenue team do a bunch of sectoral audits , something they do occasionally for anyway.

The goal isn't to punish Jimmy the plumber who has a house in Crumlin he isn't renting at the minute or Mary that owns a holiday home or one small flat her kid might use for college in a year or two, the goal would be to force the large scale investors and land bankers to actually have their properties at closer to capacity.

Manion

That sounds like a really expensive and complex legal and civil service bureaucracy. Is there any evidence to support the idea that mass vacant properties are a major contributor to the housing shortage?