Rent freeze?

garhjw · 10-12-2019 7:24am #1

Fine election stunt by SF. If it got through how would it be mechanised?

https://www.irishexaminer.com/breakingnews/ireland/government-expected-to-oppose-nationwide-rent-freeze-and-tax-relief-proposals-969430.html

handlemaster · 10-12-2019 7:26am

garhjw wrote: »

Fine election stunt by SF. If it got through how would it be mechanised?

https://www.irishexaminer.com/breakingnews/ireland/government-expected-to-oppose-nationwide-rent-freeze-and-tax-relief-proposals-969430.html

Anything for a vote

overkill602 · 10-12-2019 7:35am

This is the worst option in a housing supply crisis but it’s a SF populist stunt
https://www.bloomberg.com/news/articles/2019-12-09/berlin-builders-hit-the-streets-in-backlash-over-rent-freeze
Anti investment in private residential accommodation
property prices to slide on market uncertainty
jobs in construction to go
less supply will effect tenants
more homeless
more derelict buildings and lower standards
less tax revenue

The Student · 10-12-2019 9:04am

garhjw wrote: »

Fine election stunt by SF. If it got through how would it be mechanised?

https://www.irishexaminer.com/breakingnews/ireland/government-expected-to-oppose-nationwide-rent-freeze-and-tax-relief-proposals-969430.html

Shows the short sightedness of politicians, another policy that will discourage increased supply of much needed rental properties.

If this is the way politicians think no wonder we are were we are.

We need more supply so lets introduce a policy that encourages existing suppliers in the market to leave and discourages new entrants.

Seriously you could not make this stuff up. Is it the 1st of April?

silver2020 · 10-12-2019 9:11am

garhjw wrote: »

Fine election stunt by SF. If it got through how would it be mechanised?

https://www.irishexaminer.com/breakingnews/ireland/government-expected-to-oppose-nationwide-rent-freeze-and-tax-relief-proposals-969430.html

That's the party of Aonghus OSnodaigh who is leading the opposition to an apartment complex on the site of the Royal Liver retail park (next to a Luas and excellent other public transport links)

Pot Kettle Black

aristotle25 · 10-12-2019 9:17am

I wouldnt have a big issue with a rent freeze for 2-3 years if I could increase the rent on my property up to market rates.

Currently I am restricted from doing so and its probably 40% less than market rate.

tabby aspreme · 10-12-2019 9:48am

Eoin O Broin debating this a while ago on morning Ireland, with Joe Doyle, Doyle punched holes through this stupidity, a true blue Dub talking sense and a Champagne Marxist talking crap

Mad_maxx · 10-12-2019 10:22am

This is designed to drive more people towards state dependency, the likes of SF can continue to blame the " private market" when this fails and as the media are onside with demonising that private market, there are only gains here for the hard left

is_that_so · 10-12-2019 10:28am

It seems to have full Opposition support, FF yet to decide on it. Not sure about this at all but doesn't bode well for the next Dail unless voters come away from the people "powah" of the left, otherwise more populist meddling could ensue. The tax relief is utterly dubious. Ironically it looks like the kind of thing that could push out even more small landlords and boost the numbers of the even more hated cuckoo funds.

overkill602 · 10-12-2019 10:49am

if this goes through politics and idiots who represent it are less irrelevant they are lost in there own world of idiocy just look at the gombeems in kerry.
The recent last bi-electon 25-30% turnout
Our"" don't want to pay", welfare culture and over paid PS ( no votes items) is dragging us into another bailout.
Clever ones have moved at least some there wealth to safe havens.

Fol20 · 10-12-2019 11:18am

You keep hearing figures of 24k average rent on the morning show. Not sure if this is accurate or not but Doyle should have rebutted this with a working example. Let’s say the ll get 24k. We have mortgage payments of 17k incl principle pay down. Then maintenance coupled with a tax could leave you at a break even point in terms of cash flow.

Gael23 · 10-12-2019 12:49pm

Should this pass, it will bring down the government so is very unlikely to make it into law.
If it does, it will cause a mass exodus of landlords form the letting market, a huge spike in homelesness and a nosedive in house prices as landlords sell up.

Samuel T. Cogley · 10-12-2019 3:27pm

How do you freeze rents on new tenancies as is being proposed (along with existing).

garhjw · 10-12-2019 5:06pm

Samuel T. Cogley wrote: »

How do you freeze rents on new tenancies as is being proposed (along with existing).

I doubt SF have put any thought into it. It’s a piece of populist sh*t.

mrslancaster · 10-12-2019 5:27pm

Samuel T. Cogley wrote: »

How do you freeze rents on new tenancies as is being proposed (along with existing).

just reading the bill and existing tenancies will be frozen at the rate being paid on the date the legislation is enacted, and new tenancies will be set according to the RTB rent index for equivalent properties within the local electoral area for 3 years. the bill wants the minister to look at the cost of giving tenants a tax refund of 8% of the annual rent
https://data.oireachtas.ie/ie/oireachtas/bill/2019/99/eng/initiated/b9919d.pdf

when is this happening?

ELM327 · 10-12-2019 5:31pm

SF will never be in government here so they can pull stunts like this without ever having to worry about following through.

Fian · 10-12-2019 6:13pm

https://www.independent.ie/irish-news/politics/fianna-fil-to-back-legislation-that-would-implement-statewide-rent-freeze-38771077.html

Long way between second stage and enactment though.

Old diesel · 10-12-2019 6:23pm

Fol20 wrote: »

You keep hearing figures of 24k average rent on the morning show. Not sure if this is accurate or not but Doyle should have rebutted this with a working example. Let’s say the ll get 24k. We have mortgage payments of 17k incl principle pay down. Then maintenance coupled with a tax could leave you at a break even point in terms of cash flow.

There are number of factors to be considered imo.....

How much do landlords need over the long term to keep it attractive to stay in. In terms of rent per month.

Ability to pay - it's all very well to say let the market sort it but if lots of people can't afford the market rent what then?????.

What rental model should we go for.

Is the cost of keeping landlords happy actually worth it - we need to look at the hard cost of doing what it takes to make landlords happy and what we get in return in terms of product.

At 24 k a year that's 240 k over 10 years if no increase - and because a freeze is not fair that cost goes up. We know it goes up because the reason a freeze is problematical is that the 24 k isnt enough.

So a smaller figure if more supply won't be enough either

Remember if supply ever catches up - that 24 k ends up being a smaller figure.

garhjw · 10-12-2019 6:31pm

mrslancaster wrote: »

just reading the bill and existing tenancies will be frozen at the rate being paid on the date the legislation is enacted, and new tenancies will be set according to the RTB rent index for equivalent properties within the local electoral area for 3 years. the bill wants the minister to look at the cost of giving tenants a tax refund of 8% of the annual rent
https://data.oireachtas.ie/ie/oireachtas/bill/2019/99/eng/initiated/b9919d.pdf

when is this happening?

So does that mean some landlords could significantly increase rent if their unit is well below the RTB index for that area?

L1011 · 10-12-2019 6:43pm

ELM327 wrote: »

SF will never be in government here so they can pull stunts like this without ever having to worry about following through.

Opposition bills have passed already in this Dail

This one won't have time however

mrslancaster · 10-12-2019 6:50pm

garhjw wrote: »

So does that mean some landlords could significantly increase rent if their unit is well below the RTB index for that area?

it just looks like another bit added on to the rent review rules. would it affect any landlord who is upgrading or adding on an extension or doing work under the new rules that came in a few months ago? so many changes

is_that_so · 10-12-2019 6:56pm

L1011 wrote: »

Opposition bills have passed already in this Dail

This one won't have time however

The tax rebate side of it wouldn't get through.

Old diesel · 10-12-2019 7:07pm

garhjw wrote: »

So does that mean some landlords could significantly increase rent if their unit is well below the RTB index for that area?

RTB index related proposal seems to relate what price new rentals would enter the market at.

Mind you it would be a good idea to allow existing below market rent properties be eligible for an RTB index linked increase to market rent.

mikemac2 · 10-12-2019 7:12pm

Fol20 wrote: »

You keep hearing figures of 24k average rent on the morning show. Not sure if this is accurate or not but Doyle should have rebutted this with a working example. Let’s say the ll get 24k. We have mortgage payments of 17k incl principle pay down. Then maintenance coupled with a tax could leave you at a break even point in terms of cash flow.

For that example one more year paid off your asset and since its break even you don't put your hand in your pocket and yet you paint it as all negative ?

Why do landlords exclude this point? Unless the house is shoddy timber and will fall down in 20 years it's very relevant

accensi0n · 10-12-2019 7:16pm

My landlord hasn't increased rent in over 3 years. This may trigger him to do it and go for the maximum. Thanks SF.

garhjw · 10-12-2019 7:22pm

mikemac2 wrote: »

For that example one more year paid off your asset and since its break even you don't put your hand in your pocket and yet you paint it as all negative ?

Why do landlords exclude this point? Unless the house is shoddy timber and will fall down in 20 years it's very relevant

How is it break even? If there is a rent freeze but inflation continues to rise that isn’t break even. Cost of painter, carpenter, electrician, depreciation / repair / renewal of furniture and fittings, increases in property tax, increased RTB registration fees... but rent received remains unchanged

garhjw · 10-12-2019 7:57pm

mikemac2 wrote: »

Inflation in the future how are ya, none of us are economists.

I quoted an post on annual cashflow and replied on one year basis and now you have drifted into the future

That makes no sense. It’s a 3 year rent freeze that is proposed so it is future oriented.

godtabh · 10-12-2019 8:10pm

accensi0n wrote: »

My landlord hasn't increased rent in over 3 years. This may trigger him to do it and go for the maximum. Thanks SF.

I haven’t but will be now regardless. Need to protect my assets at the cost of the tenant.

FF now supporting the bill.

I wonder how quick it would be to reverse rent freezes in the event of a down turn?

ReverseGiraffe · 10-12-2019 8:28pm

If the bill passed how soon would it take effect?

Bigmac1euro · 10-12-2019 9:47pm

I hope the tax credit can be back dated. That would be amazing!

Assetbacked · 10-12-2019 11:03pm

Gael23 wrote: »

Should this pass, it will bring down the government so is very unlikely to make it into law.
If it does, it will cause a mass exodus of landlords form the letting market, a huge spike in homelesness and a nosedive in house prices as landlords sell up.

A nose dive in prices is a good thing.

Steadily increasing the rent 4% each year seems to be accepted practice which is ridiculous. The rental credit is also a good thing. Desperate times etc. until supply picks up.

godtabh · 10-12-2019 11:50pm

Assetbacked wrote: »

A nose dive in prices is a good.

Is it? If there is a crash in prices who will build homes for demand?

No new homes rents will keep going up

smurgen · 11-12-2019 12:06am

godtabh wrote: »

Is it? If there is a crash in prices who will build homes for demand?

No new homes rents will keep going up

They won't be allowed to thank God.

CPTM · 11-12-2019 12:06am

Am I the only one who sees a black market increasing if this were to happen? There's a housing crisis happening. If a landlord had to freeze their rent at 1000 euro, they'll be inundated with backhanders of people offering an extra 500 cash per month on top of it. Simple really.. that's what I'd do if I were a desperate house hunter anyways. This is impossible to police.

smurgen · 11-12-2019 12:07am

overkill602 wrote: »

This is the worst option in a housing supply crisis but it’s a SF populist stunt
https://www.bloomberg.com/news/articles/2019-12-09/berlin-builders-hit-the-streets-in-backlash-over-rent-freeze
Anti investment in private residential accommodation
property prices to slide on market uncertainty
jobs in construction to go
less supply will effect tenants
more homeless
more derelict buildings and lower standards
less tax revenue

Loads of dereliction already and poor standards. We're in an extremely dysfunctional housing market as is with prices held artificially high.

Fol20 · 11-12-2019 12:09am

Old diesel wrote: »

There are number of factors to be considered imo.....

How much do landlords need over the long term to keep it attractive to stay in. In terms of rent per month.

Ability to pay - it's all very well to say let the market sort it but if lots of people can't afford the market rent what then?????.

What rental model should we go for.

Is the cost of keeping landlords happy actually worth it - we need to look at the hard cost of doing what it takes to make landlords happy and what we get in return in terms of product.

At 24 k a year that's 240 k over 10 years if no increase - and because a freeze is not fair that cost goes up. We know it goes up because the reason a freeze is problematical is that the 24 k isnt enough.

So a smaller figure if more supply won't be enough either

Remember if supply ever catches up - that 24 k ends up being a smaller figure.

I’m personally for free market and increase supply which would naturally decrease market rate. Due to government interference, this will never happen.

Well if you don’t have landlords that are happy. What does that mean for tenants. I would think this means, there is less rentals which would cause more homelessness etc so not so happy tenants.

Del2005 · 11-12-2019 12:10am

ReverseGiraffe wrote: »

If the bill passed how soon would it take effect?

Most likely never. Plenty of legislation has been passed but the government has blocked them by not authorising the money aspect.

For all the people saying that this is a good thing can you provide evidence of a place where rent freezes did any good? There's been plenty of rent freezes.

smurgen · 11-12-2019 12:13am

Fol20 wrote: »

I’m personally for free market and increase supply which would naturally decrease market rate. Due to government interference, this will never happen.

Well if you don’t have landlords that are happy. What does that mean for tenants. I would think this means, there is less rentals which would cause more homelessness etc so not so happy tenants.

Leave the unhappy landlords sell up at a reduced rate on their now less expensive property. Then change zoning laws on a massive scale making land cheap and building affordable.

Fol20 · 11-12-2019 12:14am

mikemac2 wrote: »

For that example one more year paid off your asset and since its break even you don't put your hand in your pocket and yet you paint it as all negative ?

Why do landlords exclude this point? Unless the house is shoddy timber and will fall down in 20 years it's very relevant

Yes most don’t account for it but I do.Principle pay down is important but cannot be realized until you sell.
There is a lot of risk when a lot of your money is on one asset class. They are at their highest rents now and it’s more than likely good or break even.
What about when times are not so good. You need to account for these and have a contingency fund in place to protect yourself.
Managing rentals are not passive. You need to know the legislation, maintain the property among other things so it’s not like you sit back and wait for the money roll in.

smurgen · 11-12-2019 12:20am

Fol20 wrote: »

Yes most don’t account for it but I do.Principle pay down is important but cannot be realized until you sell.
There is a lot of risk when a lot of your money is on one asset class. They are at their highest rents now and it’s more than likely good or break even.
What about when times are not so good. You need to account for these and have a contingency fund in place to protect yourself.
Managing rentals are not passive. You need to know the legislation, maintain the property among other things so it’s not like you sit back and wait for the money roll in.

It's not of societies concern what financial risks you take. Our government should not be propping up private landlords.

Fol20 · 11-12-2019 12:24am

smurgen wrote: »

Leave the unhappy landlords sell up at a reduced rate on their now less expensive property. Then change zoning laws on a massive scale making land cheap and building affordable.

Emotive tones with no substance behind it.

Investments can go up and down and everyone needs to accept this. You seem to be happy that ll would loose money not because of a capitalist market(which would be fair) but because of a stupid law that can be changed on a whim. If the tides had turned and let’s say in your job. The government said “nope you shouldn’t get paid that extra 10k a year even though you can get it” how would you take it. What you are saying doesn’t make sense

Change zoning laws - please explain. We can barely build an apartment block without complaints and objections going in and you want to dramatically change zoning laws.

Making building affordable - please explain. Shall we just tell builders,contractors similar to my a Analogy for your 10k salary that nope. We’re not willing to pay you market rate so please accept a drop in your wages so everyone else can be happy. What areas would you sacrifice to make it more affordable as I currently don’t see many given current rates.

Fol20 · 11-12-2019 12:25am

smurgen wrote: »

It's not of societies concern what financial risks you take. Our government should not be propping up private landlords.

How is our government propping up ll. all I see is that they are trying to limit them as best as possible to make it appear like they are doing something for the cohort of renters when in fact it is stifling growth thus hurting them

Gumbo · 11-12-2019 12:30am

smurgen wrote: »

Leave the unhappy landlords sell up at a reduced rate on their now less expensive property. Then change zoning laws on a massive scale making land cheap and building affordable.

Ok, back to the real world now guys.

smurgen · 11-12-2019 12:35am

Fol20 wrote: »

Emotive tones with no substance behind it.

Investments can go up and down and everyone needs to accept this. You seem to be happy that ll would loose money not because of a capitalist market(which would be fair) but because of a stupid law that can be changed on a whim. If the tides had turned and let’s say in your job. The government said “nope you shouldn’t get paid that extra 10k a year even though you can get it” how would you take it. What you are saying doesn’t make sense

Change zoning laws - please explain. We can barely build an apartment block without complaints and objections going in and you want to dramatically change zoning laws.

Making building affordable - please explain. Shall we just tell builders,contractors similar to my a Analogy for your 10k salary that nope. We’re not willing to pay you market rate so please accept a drop in your wages so everyone else can be happy. What areas would you sacrifice to make it more affordable as I currently don’t see many given current rates.

Yours is an emotive reply also. Change is laws happen in all industries. It leads to some operators dying off while others adapt.
The zoning laws are a change of law. Can easily be done and so can other items to fast track development and make costs lower for developers. We can for one increase housing density in urban areas by getting rid of height restrictions. NIMBYism needs to be tackled head on for the greater good. And planning objection process needs to be scrapped and rebuilt. We live in a democratic system where the greater good of the majority needs to be taken into account not to pander to those with vested interests or those that are stuck in the past .

smurgen · 11-12-2019 12:42am

kceire wrote: »

Ok, back to the real world now guys.

So and you saying my suggestion is impossible/unlikely or am I to suppose you just don't like it? Poor reply from a Moderator tbh.

Assetbacked · 11-12-2019 12:46am

Fol20 wrote: »

How is our government propping up ll. all I see is that they are trying to limit them as best as possible to make it appear like they are doing something for the cohort of renters when in fact it is stifling growth thus hurting them

Institutional landlords receive many tax breaks on rental income and are heavily involved in the shadow banking industry as part of the funding drive to purchase large apartment blocks, all legal but not subject to tax. If a rental credit was given to renters, it is likely this will result in rent increases but if rents are frozen with it, it gives short term, much overdue relief to tenants. It is not a silver bullet solution as the crisis is not solveable in that manner but it is at least providing some respite to tenants which the government have not done for years as we are in a devastating housing crisis.

Fol20 · 11-12-2019 12:48am

smurgen wrote: »

Yours is an emotive reply also. Change is laws happen in all industries. It leads to some operators dying off while others adapt.
The zoning laws are a change of law. Can easily be done and so can other items to fast track development and make costs lower for developers. We can for one increase housing density in urban areas by getting rid of height restrictions. NIMBYism needs to be tackled head on for the greater good. And planning objection process needs to be scrapped and rebuilt. We live in a democratic system where the greater good of the majority needs to be taken into account not to pander to those with vested interests or those that are stuck in the past .

Too se

I agree with most your comments and in a perfect world could be done. I just think in the REAL world. I don’t see it as a possibility sadly. It is populist though and to hinder growth by using rent controls etc and the same could be said for renters that are “stuck in the past and need to adapt to new renting life” - I will say that I want people to afford their own property but it’s expectations that need to be reset. Another time to note is building sizes. I know in Eu countries they also have 10m sq apartments which would make it much more affordable for renters to at least get on the the property ladder. They would also be better than the communal buildings that they are currently proposing.

Fol20 · 11-12-2019 12:52am

Assetbacked wrote: »

Institutional landlords receive many tax breaks on rental income and are heavily involved in the shadow banking industry as part of the funding drive to purchase large apartment blocks, all legal but not subject to tax. If a rental credit was given to renters, it is likely this will result in rent increases but if rents are frozen with it, it gives short term, much overdue relief to tenants. It is not a silver bullet solution as the crisis is not solveable in that manner but it is at least providing some respite to tenants which the government have not done for years as we are in a devastating housing crisis.

Genuinely forgot that the renters credit could act like oxygen to fire and cause rents to go up.

I actually was only commenting on private ll when I said the government don’t prop up ll. For REITS they for sure allows certain aspect I don’t approve of. I do think REITS should be treated like any other corp though and be taxed accordingly.

Once you bring in a rent freeze as we are seeing with rpz. It’s politically very hard to back track away from it and allow rents to increase again without political suicide.

smurgen · 11-12-2019 12:56am

Fol20 wrote: »

How is our government propping up ll. all I see is that they are trying to limit them as best as possible to make it appear like they are doing something for the cohort of renters when in fact it is stifling growth thus hurting them

By not encouraging house building quickly is one way. This is restricting supply. Then you had a council last week in dublin sign a 25 year lease on multiple luxury private apartments to be used for social housing from a German investment fund. At a cost at more than it would to build these apartments themselves.Such a move means that the market for private renters not seeking social housing gets a little tighter. But I don't see private landlords in here kicking up with government intervention that works in their favour.

Graham · 11-12-2019 12:58am

smurgen wrote: »

But I don't see private landlords in here kicking up with government intervention that works in their favour.

What intervention would that be?

Old diesel · 11-12-2019 1:06am

Fol20 wrote: »

I’m personally for free market and increase supply which would naturally decrease market rate. Due to government interference, this will never happen.

Well if you don’t have landlords that are happy. What does that mean for tenants. I would think this means, there is less rentals which would cause more homelessness etc so not so happy tenants.

The market at the moment seems to be signalling that it requires more rent even with some insane rents.

There has to be a point where you say ENOUGH and that there just isn't the money there to make people happy.

Personally I think the market needs a player to come in with the specific intention of delivering cost effective housing. The reason air travel to London is relatively cheap is because Michael O Leary made a deliberate decision to step up and reduce air travel costs. Cheaper fares.

This might even mean a state solution like opening up social housing eligibility to higher incomes.

That means higher incomes coming into a version of HAP.

Housing to my mind as it stands is a money pit.

Rent freeze?

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