Are rent controls making things better or worse for renters?

Fol20 · 17-12-2018 5:50pm

Lux23 wrote: »

Everyone landlord in the country would be evicting their tenants if they did that.

Not quite. What do you think happened before the rpz was brought in. Most ll and tenants just got on with things. Before the rpz rules were brought in some ll didnt increase rent on existing tenants for several years. I have even seen some threads mentioning the fact the rent they previously charged has doubled since then. The problem that the current situation has caused is that many decent ll have now been made more aware of “market rate” that they could achieve and they now know they will be hit with problems unless they also start increasing rent which hadnt crossed several ll minds in the past.

In my own case i have some uncles that have had the same tenants in some places before the recession started. The rent was decreased during that time and didn't bother increasing it during the good times until this rpz malarky started. It never crossed their mind about market rate as in their head they were just thinking that they will set it at the going rate when the new tenants move in which was always the way in the past. The more the goverent tweak the system, the worse it gets for ll and tenants alike.

Wheres Me Jumper? · 18-12-2018 12:30pm

personally it's because of loony left (proposed) legislation like this that i never rent to families, and probably never will.
at least with single people you know they most likely will move on after a few years, whereas a family that puts down roots could be in your property for 10 or 15 years.
in most circumstances this might be ok, but if you need your property back then i think you're better off with single people.

The_Conductor · 18-12-2018 6:42pm

Wheres Me Jumper? wrote: »

personally it's because of loony left (proposed) legislation like this that i never rent to families, and probably never will.
at least with single people you know they most likely will move on after a few years, whereas a family that puts down roots could be in your property for 10 or 15 years.
in most circumstances this might be ok, but if you need your property back then i think you're better off with single people.

You'd just better be careful that you don't articulate this to prospective tenants! I can see where you're coming from- and your hypothesis does have merit. Whether I'd do similar in your case- I don't know- however, were I letting a unit- and thought that I might want it for myself down the road- I'd 100% definitely think twice about the family dynamics of the prospective renters.........

LotharIngum · 18-12-2018 7:40pm

The_Conductor wrote: »

You'd just better be careful that you don't articulate this to prospective tenants! I can see where you're coming from- and your hypothesis does have merit. Whether I'd do similar in your case- I don't know- however, were I letting a unit- and thought that I might want it for myself down the road- I'd 100% definitely think twice about the family dynamics of the prospective renters.........

Ive heard people say they wouldn't let to families with children, not because of the damage children could do but because there is a child involved the parents will use them to justify overholding both to themselves and others.

Imagine a family with a child end up on the front page of a newspaper and the ll is automatically the bad guy.

IdHidden · 19-12-2018 10:30am

I am a landlord. I got trapped with a low rent because I didn’t raise it before rent controls. The tenants completely ruined the place, and didn’t want to move out. I just sold the house. Not worth the hassle. Small landlords are leaving the market and large foreign owned property companies are coming in they pay less tax and have teams of people to deal with problems.

Clearly a rent index and prices based on similar properties in similar areas would have been better than the current rules.

Fol20 · 19-12-2018 10:46am

LotharIngum wrote: »

Ive heard people say they wouldn't let to families with children, not because of the damage children could do but because there is a child involved the parents will use them to justify overholding both to themselves and others.

Imagine a family with a child end up on the front page of a newspaper and the ll is automatically the bad guy.

Exactly. Even the farmer in roscommon who was forceably evicted has several people coming to his defence. It only gets to that stage if you dont pay your bills for a very long time and even then. He could have left amicably but he chose not to. People ignore the facts of a case and use people emotions when they are getting evicted and for this very reason people pay higher mortgages and potentially higher rent.

ongarboy · 19-12-2018 10:48am

IdHidden wrote: »

I am a landlord. I got trapped with a low rent because I didn’t raise it before rent controls. The tenants completely ruined the place, and didn’t want to move out. I just sold the house. Not worth the hassle. Small landlords are leaving the market and large foreign owned property companies are coming in they pay less tax and have teams of people to deal with problems.

Clearly a rent index and prices based on similar properties in similar areas would have been better than the current rules.

https://www.irishtimes.com/business/personal-finance/why-are-landlords-leaving-the-market-in-large-numbers-1.3360363

This article is from the start of 2018 but just as relevant now.

Wheres Me Jumper? · 19-12-2018 11:43am

IdHidden wrote: »

I am a landlord. I got trapped with a low rent because I didn’t raise it before rent controls. The tenants completely ruined the place, and didn’t want to move out. I just sold the house. Not worth the hassle. Small landlords are leaving the market and large foreign owned property companies are coming in they pay less tax and have teams of people to deal with problems.

Clearly a rent index and prices based on similar properties in similar areas would have been better than the current rules.

that depends. it would need to be an INDEPENDENT body.

can you imagine if billy boy barrett and his loony leftie friends got control of that?
as a LL i wouldn't even trust the PRTB to have control of it, as time & time again they have proven themselves to be anti-LL.

LotharIngum · 23-12-2018 5:57pm

Seems to be getting worse all the time. I reckon rent controls will finally drive out the private landlord this coming year.
I bet there will be very few houses to rent by the end of the year, end while it will be apartments only for rent from here on in the number of those will drop too.

I thing house shares and very expensive apartments is where all the rentals will be within a couple of years.

Wheres Me Jumper? · 23-12-2018 6:47pm

LotharIngum wrote: »

Seems to be getting worse all the time. I reckon rent controls will finally drive out the private landlord this coming year.
I bet there will be very few houses to rent by the end of the year, end while it will be apartments only for rent from here on in the number of those will drop too.

I thing house shares and very expensive apartments is where all the rentals will be within a couple of years.

as a LL i actually feel sorry for 95% of tenants.
they are stuck between a small percentage of greedy LLs, and a reactive, myopic Govt who seem intent on making a bad situation worse.

watch out for many more homeless people in 2019.

Fol20 · 23-12-2018 6:51pm

Wheres Me Jumper? wrote: »

as a LL i actually feel sorry for 95% of tenants.
they are stuck between a small percentage of greedy LLs, and a reactive, myopic Govt who seem intent on making a bad situation worse.

watch out for many more homeless people in 2019.

The ironic thing is that the digger the hole they make, the more homeless are created and in turn make it more and more difficult to give ll anything as the charity will be out in arms complaining

airportgirl83 · 24-12-2018 12:52am

My brother's lease was for 2 years (expired sometime in the Summer) and on a month by month basis since. Should he ask for a new lease now? He's actively looking to buy a house but it's difficult and might take few more months. I don't want him to find himself out on a street because he didn't renew the lease. At the same time, he's worried that if he asks for a new lease, his rent might go up. Property is rented through the estate agent, landlord lives abroad. Any suggestions?

murphaph · 24-12-2018 9:59am

He has full part IV protection. A lease is of no benefit to him.

Cuddlesworth · 25-12-2018 12:30pm

Fol20 wrote: »

Not quite. What do you think happened before the rpz was brought in. Most ll and tenants just got on with things. Before the rpz rules were brought in some ll didnt increase rent on existing tenants for several years. I have even seen some threads mentioning the fact the rent they previously charged has doubled since then. The problem that the current situation has caused is that many decent ll have now been made more aware of “market rate” that they could achieve and they now know they will be hit with problems unless they also start increasing rent which hadnt crossed several ll minds in the past.

In my own case i have some uncles that have had the same tenants in some places before the recession started. The rent was decreased during that time and didn't bother increasing it during the good times until this rpz malarky started. It never crossed their mind about market rate as in their head they were just thinking that they will set it at the going rate when the new tenants move in which was always the way in the past. The more the goverent tweak the system, the worse it gets for ll and tenants alike.

Its a good point, a lot of landlords were not really aware of how much they were charging compared to the "market rate" at the time. Once they were told they could no longer charge more, then they became very aware.

Which leads into, what exactly will happen to rents when the supposed temporary RPZ gets lifted. And I feel like the RPZ can never be lifted until the market goes into a severe depression. It would cause a significant number of those now aware and pissed off landlords to bump their rents up significantly on the day it lifts. Trying to ease it out with gradual relaxation on the current limits, will just see maximum increases per year and the bandaid comes off slowly instead.

Fol20 · 25-12-2018 1:30pm

Cuddlesworth wrote: »

Its a good point, a lot of landlords were not really aware of how much they were charging compared to the "market rate" at the time. Once they were told they could no longer charge more, then they became very aware.

Which leads into, what exactly will happen to rents when the supposed temporary RPZ gets lifted. And I feel like the RPZ can never be lifted until the market goes into a severe depression. It would cause a significant number of those now aware and pissed off landlords to bump their rents up significantly on the day it lifts. Trying to ease it out with gradual relaxation on the current limits, will just see maximum increases per year and the bandaid comes off slowly instead.

The peoblem however is that every singlevyearvwithout fail. The government arectinkering with legislation. Right now we need stability and they are not providingbit right now. This jan or feb. more laws are expected. Next yea, we should be seeing an end to rpz in major cities but i suspect again, they will tinker with it. I pray they will use the excuse that its against legislation when it was brought on as a temp move but we shall see

alias no.9 · 25-12-2018 8:13pm

Cuddlesworth wrote: »

Its a good point, a lot of landlords were not really aware of how much they were charging compared to the "market rate" at the time. Once they were told they could no longer charge more, then they became very aware.

Which leads into, what exactly will happen to rents when the supposed temporary RPZ gets lifted. And I feel like the RPZ can never be lifted until the market goes into a severe depression. It would cause a significant number of those now aware and pissed off landlords to bump their rents up significantly on the day it lifts. Trying to ease it out with gradual relaxation on the current limits, will just see maximum increases per year and the bandaid comes off slowly instead.

Unwinding the RPZ will be messy. You can't do it without a period where all new tenancies are marked to the same benchmark. There are two ways of doing this.

One is to allow unfettered marking to market rates for new tenancies which will show as a crazy hike in average rental stats with the expected chaos.

The other option is to mark everybody to a rental index for their area (€/sq.m) which would for the first time pull back the top end of the market, the landlords who led the charge to craziness, yet were rewarded by the RPZ rules relative to the rest of the market. This should have happened a very short time after the original RPZ rules came in. It would see landlords of comparable properties treated equally and tenants of comparable properties treated equally with some balance between landlords and tenants.

Fol20 · 25-12-2018 11:30pm

alias no.9 wrote: »

Unwinding the RPZ will be messy. You can't do it without a period where all new tenancies are marked to the same benchmark. There are two ways of doing this.

One is to allow unfettered marking to market rates for new tenancies which will show as a crazy hike in average rental stats with the expected chaos.

The other option is to mark everybody to a rental index for their area (€/sq.m) which would for the first time pull back the top end of the market, the landlords who led the charge to craziness, yet were rewarded by the RPZ rules relative to the rest of the market. This should have happened a very short time after the original RPZ rules came in. It would see landlords of comparable properties treated equally and tenants of comparable properties treated equally with some balance between landlords and tenants.

This actually sounds worse. Basically you want the ll that did increase to market rate to have decreased rent. And leave the current cheaper ll as is. So best of both for tenants so. Personally im hoping for a mass exodis of ll this year through the capital gains exceptions along with neg equity owners selling up. If there is a big jump in leaves. Then the government will have to do something for the existing ll

The_Conductor · 26-12-2018 8:21am

Unwinding the RPZ legislation- the legislation itself- is simple. It has a defined lifespan- and could simply be allowed to lapse.
The whole can of worms though- is the mess its made for both tenants and landlords- with spurious renovations of properties on the parts of landlords- and tenants holding onto patently unsuitable property- to the extent that they're loosing HAP payments given its unsuitability- because they can't find alternate accommodation.

The interventions in the sector have been such that there patently is not a functioning sector any longer.

If there was a defined roadmap for the unwinding of the legislation- with a massive social housing contruction scheme implemented in tandem with abolition of RPZ legislation- and better enforcement options for landlords and tenants who find themselves in untenable situations- it would be hard to suggest that keeping the legislation in any form- is defensible.

The aim of the RPZ legislation- has, contrary to what you might believe in the media- succeeded. Inflation in rents- has subsided. The metric that they roll out though- is the asking prices on DAFT (and similar venues)- aka- new rental prices- not what is happening with the 78% of the sector who are not moving accommodation in any given year.

The biggest single achievement of the RPZ legislation- is that it is normalised long term renting as a viable 'choice' in the Irish market- this is seen in the year-on-year increase in the lengths of tenancies reported by the RTB. Longer and longer tenancies- are becoming normal- because people are terrified to leave their 'rent-controlled' properties and throw themselves at the mercy of the market.

RPZ legislation- is defacto rent control legislation- in the manner in which it operates.

The 4% increase per annum- is satisfactory for the REITs and the bigger operators in the market (who I see now include two Irish and one German pension fund, among their numbers). It is not satisfactory- for the thousands of landlords- caught at abnormally low rent levels who were banned from normalising their rents. It is also not satisfactory- if/when a business relationship breaks down- and a landlord finds that it still takes between 2-3 years to get their property back- despite impeccable statistics from the RTB showing they give a first meeting to landlords who have overholding tenants within 7 weeks. The operative part of this is the phrase 'first meeting'. Its the first on a long long road........

Our rental sector has been irreparably broken. Is it time for us to acknowledge this- and move on- and accept that if you want to rent in future- you are automatically talking about an apartment from a REIT in a city centre, without exception? Two wrongs don't make a REIT- to excuse a pun, but the constant tinkering with the legislation and the regulatory environment- is bloody impossible for all but the largest operators to operate in- hell, even the estate agents are getting out of property management business- its too complicated to keep on top of.

Dinarius · 26-12-2018 11:26am

Two points on the above post.

Yes, RPZ stalled rents, but it has crucified availability.

Secondly, when you talk about yearly increases of 4%; isn’t it every two years?

Thanks.

D.

lcwill · 26-12-2018 12:52pm

Landlords could be given the option to base rent on a €/sq.m index, with adjustments for characteristics of the apartment, I.e. higher amount for apartment with elevator, car park, furnished, balcony, etc.

The contract can indicate if the rent as been set based on market rates or on the index and when you register your tenancy you indicate which it is. Landlords who set rent based on the index can pay a lower rate of tax.

This is how it works in Italy - if rent is set based on the index you pay 10% tax, otherwise you pay tax at your marginal rate.

The_Conductor · 26-12-2018 12:57pm

Dinarius wrote: »

Two points on the above post.

Yes, RPZ stalled rents, but it has crucified availability.

Secondly, when you talk about yearly increases of 4%; isn’t it every two years?

Thanks.

D.

Nope 4% per annum.

The first 4% increase is after 24 months- if the tenancy commenced prior to 24th December 2016- and every 12 months thereafter (with 90 days notice of the increase). Tenancies after 24th Dec 2016- its a straight 12 months, no initial 24 month period. Note- the 24 month period- was since the date of last rent review- so even for tenancies that commenced prior to 24th Dec 2016- there could be an immediate increase, as per the calculator on the RTB website- and then 12 month increases thereafter. For a cumulative increase in a tenancy that commenced prior to 24th Dec 2016- its 4% for first 24 months and 4% per 12 months thereafter- so say a tenant had an increase on the 23rd Dec 2011- and none since then- the landlord could increase 4% to bring them up to 24th Dec 2013- and 4% per annum thereafter- so cumulatively- they could increase the rent by 24% in one foul swoop..........

It all depends on when the tenancy commenced- and when the last review occurred.

Thespoofer · 26-12-2018 1:12pm

Have friends in Switzerland that signed a rental agreement for 20 years back in approximately 2004 for a house.

In this time they are raring their kids, have renovated the house to suit their needs so both parties are happy I guess. They themselves have taken out a mortgage to invest in a block of 4 apartments as future security.

My point being I suppose is maybe we need to look abroad to what type of system these countries use as there seems to alot more confidence on both sides when renting/renting out a property.

Fol20 · 26-12-2018 1:48pm

lcwill wrote: »

Landlords could be given the option to base rent on a €/sq.m index, with adjustments for characteristics of the apartment, I.e. higher amount for apartment with elevator, car park, furnished, balcony, etc.

The contract can indicate if the rent as been set based on market rates or on the index and when you register your tenancy you indicate which it is. Landlords who set rent based on the index can pay a lower rate of tax.

This is how it works in Italy - if rent is set based on the index you pay 10% tax, otherwise you pay tax at your marginal rate.

Anything out of Italy, id run a mile away. Their repuation for their economy and efficiency businesses proceeds them

.

Juat kidding. Interest proposition. Depending on figures. Some may take a deal like that especially if you own the property outright. I know this might sound like a bit much when your talking about ll. However that system might create a greator form of inequality between ll where the super rich will howrd properties since their cash rich while the mom and pop ll cant afford them anymore

The_Conductor · 26-12-2018 8:44pm

Fol20 wrote: »

Anything out of Italy, id run a mile away. Their repuation for their economy and efficiency businesses proceeds them .

Juat kidding. Interest proposition. Depending on figures. Some may take a deal like that especially if you own the property outright. I know this might sound like a bit much when your talking about ll. However that system might create a greator form of inequality between ll where the super rich will howrd properties since their cash rich while the mom and pop ll cant afford them anymore

The Mom and Pop can buy shares in a REIT (or any other investment category) towards their pension. Hell- pension companies are piling into REITs. The other big category for pension companies- are super tax efficient investments such as forestry- which also gives them oodles of good press. The future for Mom and Pop businesses- is to get the hell out of owning single units- in favour of MUD type managed shareholdings- where entire developments are let- with no owner occupiers. We've started to go down that road even here in Ireland- with some rather interesting developments that might never have sold- now being let as luxury developments (Cherry Orchard anyone?)

The strangest thing in all of this- is how it all managed to fly under the radar- this seismic shift that is going to effect Irish society for the next 100 years- happened without any discussion in the media- nada.

beauf · 28-12-2018 3:53am

alias no.9 wrote: »

....I'll now be watching this bill like a hawk as the part IV date looms in a few month. I won't be tied into an indefinite term with no provision for terminating a tenancy to sell the property in a scenario where banks won't offer a mortgage to prospective buyers without vacant possession. If the risk is hanging out there, I may just have to give them notice before part IV, something I wouldn't otherwise do. I'll keep it vacant until this is decided one way or the other, if it passes into law I'll be selling.

I wonder how many LL will think the same. Terminate Part IV as they expire, then sit on the property, until it becomes clear what the Govt will do.

If nothing else change tenants, which delays when the next part IV kicks in?

At that point the Govt will have put it cards on the table and LL will know if its worth staying in or selling.

overkill602 · 28-12-2018 9:13am

beauf wrote: »

I wonder how many LL will think the same. Terminate Part IV as they expire, then sit on the property, until it becomes clear what the Govt will do.

If nothing else change tenants, which delays when the next part IV kicks in?

At that point the Govt will have put it cards on the table and LL will know if its worth staying in or selling.

Stopped renewing Part4s early last year terminating before they expired following the process to the letter of the law replaced with short lets, know many who are sticking with abnb due to uncertainty I think we have a fair idea where it going in the short term.

So my plan is 50% exiting and leave vacant for family are my considered options uk market dropping may present some opportunities in a more stable rental environment

Dinarius · 16-05-2019 3:39pm

The_Conductor wrote: »

Nope 4% per annum.

The first 4% increase is after 24 months- if the tenancy commenced prior to 24th December 2016- and every 12 months thereafter (with 90 days notice of the increase). Tenancies after 24th Dec 2016- its a straight 12 months, no initial 24 month period. Note- the 24 month period- was since the date of last rent review- so even for tenancies that commenced prior to 24th Dec 2016- there could be an immediate increase, as per the calculator on the RTB website- and then 12 month increases thereafter. For a cumulative increase in a tenancy that commenced prior to 24th Dec 2016- its 4% for first 24 months and 4% per 12 months thereafter- so say a tenant had an increase on the 23rd Dec 2011- and none since then- the landlord could increase 4% to bring them up to 24th Dec 2013- and 4% per annum thereafter- so cumulatively- they could increase the rent by 24% in one foul swoop..........

It all depends on when the tenancy commenced- and when the last review occurred.

Belatedly, thanks for that explanation.

Their renewal date is October 1. So, I presume that I must inform them of a 4% increase by June 30.

This coming October will be their 5th year in the apartment.

D.

handlemaster · 16-05-2019 3:47pm

with all the restrictions that landlords have now, even if the landlord stays in the business she will be more likely to add the max 4 % per year because they are getting screwed ever time the government wants to please the voters

beauf · 17-05-2019 9:24am

The_Conductor wrote: »

...
The strangest thing in all of this- is how it all managed to fly under the radar- this seismic shift that is going to effect Irish society for the next 100 years- happened without any discussion in the media- nada...

Not really. Most people in these forums don't see the bigger picture. They are only interested in how things effect them in the short term. They are oblivious to the longer term issues they are heading blindly into.

Fol20 · 17-05-2019 9:43am

beauf wrote: »

Not really. Most people in these forums don't see the bigger picture. They are only interested in how things effect them in the short term. They are oblivious to the longer term issues they are heading blindly into.

Just out of interest, in your opinion what are the longer term issues you see?

Are rent controls making things better or worse for renters?

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