SECURITY OF TENURE IN THE
PRIVATE RENTED SECTOR IN
THE REPUBLIC OF IRELAND
Aideen Hayden & Bob Jordan, Threshold
European Network for Housing Research (ENHR) Conference
‘Private Renting after the Crisis’
London School of Economics, England
19-20 March 2015
Outline
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History & evolution of security of tenure in Ireland
Definitions & typologies
Phases of rent control
New initiatives
Emerging issues and concerns
Tenure in Republic of Ireland
Percentage Distribution of Housing Stock By
Tenure, 1961 - 2011
90
Owner Occupation 69.7%
80
70
60
50
40
30
Private Rented 18.5%
20
10
Social Rented 8.7%
0
1961
1971
1981
Source: CSO, Census of Population (various years)
1991
2002
2006
2011
Tenure in Ireland
Tenure
Owner Occupied
2006
%
2011
%
1,091,945
74.7
1,149,924
69.7
Social Housing
155,989
10.7
143,975
8.7
Private Rented
145,317
9.9
305,377
18.5
69,045
4.7
50,132
3.0
1,462,296
100
1,649,408
100
Other
Total
Definitions of security of tenure
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One of the ‘most critical issues’ affecting the landlord/tenant
relationship (Kemp, 2005)
‘Ensuring continued occupation of a dwelling once access has
been gained’ and ‘the security the occupant is afforded from
eviction’ (O’Brien and Dillon, 1982)
‘The extent to which an interest in, or title to, property is
certain or guaranteed’ (Australian National Housing Strategy,
1992)
‘Legal arrangements which offer tenants indefinite tenure of
their housing, subject to proven breaches of their lease
agreement that provide grounds for termination action by the
landlord’ (Fitzpatrick and Pawson, 2011)
Security of tenure and rent control
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Balancing of landlord and tenant interests (Kemp, 2004)
Security of tenure linked (and confused) with rent control
Security of tenure system is ‘to protect the tenant from
unjustified eviction’ while rent control system ‘prevents the
landlord from imposing exorbitant rent increases as a
condition of renewing or continuing the tenancy and so from
being able to effectively evict tenants’ ([Australian]
Residential Tenancies Project, 1975)
Types of rent control
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
Three phases since beginning of 20th century
(O’Sullivan and De Decker, 2007)
 1st generation – rent freezes (WWI and WWII)
 2nd generation – annual increases linked to costs
and profitability for landlords (1970s)
 3rd generation – regulation within tenancy rather
than between tenancies (1990s)
2nd and 3rd generation influenced by introduction of
rent allowances and housing benefits (Turner and
Elsinga, 2005)
Phase 1 – Tenant Favourable
Protections (1914-1982)
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Rent restricted to standard rent in 1914
Increases limited to % of rates increase or costs from
structural improvement
Landlord’s right to recover property limited
Extended continuously until 1960
1960 Act divided dwellings into controlled and
uncontrolled dwellings
Controlled and Uncontrolled
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Rent control over mainly unfurnished property
where tenants benefited from low rents and
protection from eviction
Most tenancies were uncontrolled, based on
periodic tenancies, and could be terminated without
reason or justification.
Actual or threatened eviction most common tenant
problem.
Rent control and decline of PRS
Size of PRS declined from 26% after WWII to
10% in 1979
 Rent control was a ‘significant, but not
overwhelming’ factor (O’Brien and Dillon, 1982)
 Other factors were slum clearance, homeownership
policies and rising incomes
 Rent control contributed to 75% decline in
controlled dwellings between 1946 and 1971.
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Phase 2 – Landlord Favourable
Protections (1982-2000)
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Rent control mechanism struck down by Supreme
Court in 1982
‘Unjust attack’ on landlords’ property rights in Blake
v Attorney General [1982]
Legislation introduced to phase out formerly
controlled sector by 2002
Rent Tribunal established to fix terms and rents
review every 4 years and 9 months
Formerly rent controlled sector now ended
Limited Regulatory Reforms
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Security of tenure was not revisited for a decade
Under 1992 Act, minimum notice period of 28 days,
rent book requirement, registration of landlord with
local authorities and some regulation of standards
Enforcement unrealistic in the absence of security of
tenure as many tenants feared retaliation (Galligan,
2005)
Growth of PRS
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Reasons for growth of PRS
1. Ireland’s ‘Celtic Tiger’ economy
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•
•
Dublin labour force grew by 150,000 in a decade
Population grew by 17% between 1996-2006
House price inflation and affordability
2. Increased State reliance on PRS
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•
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Sale of social housing in 1980s and 1990s
39,000 on rent supplement scheme by 1996
Security of tenure a concern for almost two-thirds of
RS recipients (Guerin, 1999)
Phase 3 – Balancing of landlord and
tenant protections (2000 - present)
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Commission on the Private Rented Residential Sector
(1999) involved broad range of stakeholders
Security of tenure of up to 4 years, with provisions after 6
months that landlord must give one of six valid reasons for
termination
Notice periods are based on duration of tenancy; written
lease is somewhat redundant
Rent certainty model rejected in favour of open market
rents that can only be reviewed annually
‘A compromise’ between landlord and tenant interests
(Commission report, 2000)
Minimum Notice Periods under RTA
Duration of Tenancy
Notice by
Notice by
Landlord
Tenant
Less than 6 months
28 days
28 days
6 months or more but less than 1 year
35 days
35 days
1 year or more but less than 2 years
42 days
42 days
2 years or more but less than 3 years
56 days
56 days
3 years or more but less than 4 years
84 days
56 days
4 or more years
112 days
56 days
Termination for breach of obligations
28 days
Termination for anti-social behaviour
7 days
Housing schemes based on RTA
1. Rental Accommodation Scheme (RAS)
 Long term RS recipients 18 months +
 Greater security than law, by written agreement
 Local authority pays landlord directly
 Differential rent paid by tenant to local authority
 Differs from RS scheme, where tenant must pass on
welfare payment and pay a contribution as well
 ‘Hybrid’ of social housing and private rented
 30,500 private transfers between 2005-2014
Housing schemes based on RTA
2. Social Housing Leasing Initiative (SHLI)
 Long term leasing for 10-20 years
 Discounted market rent and local authority or housing
association covers management and maintenance
 Similar to RAS, legal obligation to rehouse tenant
 Limited take-up of 4,600 units since 2009
 Longer agreement and rent levels at lowest level for
some time
 Upper limit to security of tenure?
Housing schemes based on RTA
3. Housing Assistance Payment (HAP)
 Like RAS, RS recipients of 18 months +
 Like RAS, local authority pays landlord directly
 Like RAS, tenant will have access to wider social
housing options
 Unlike RAS, tenant contribution deducted at source
 Addresses rent arrears issue that exists under RAS and
affects eligibility to other social housing options
 Currently being piloted in 7 local authority areas
Security of tenure after RTA
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Security of tenure not main problem faced by tenants
Deposit retention (tenants) and rent arrears
(landlords) are the main sources of dispute to PRTB,
representing about 70% of all disputes
But economic downturn has impacted
Rise in illegal evictions from 3-5% over 2007-2011 to
8-9% in 2012-2013
Rent arrears increasing from 19% in 2007 to 35% in 2012
Dispute Applications to PRTB 2007-2013
100%
90%
19%
19%
23%
80%
70%
60%
43%
5%
20%
35%
43%
32%
25%
23%
22%
4%
3%
30%
31%
35%
22%
4%
50%
40%
33%
32%
51%
39%
3%
43%
9%
37%
Rent Arrears
Other
25%
8%
Illegal Evictions
32%
10%
Deposit Retention
0%
2007
2008
2009
2010
2011
2012
2013
Rent levels and affordability
Three current difficulties that impact on security of tenure
 Overall reduction in supply
• Housing output has fallen by 90% since 2006
• Properties to rent in Dublin down by 40% since 2011
 Rent reviews and higher asking rents
• Annual rent inflation from 2.2% in 2012 to 9.7% in 2014
• Dublin rent inflation peaked at 16.7% in April 2014, now
spreading to commuter counties
• Reviews of rent more common after period of stability
 Reductions in welfare payments
• Reductions of up to one-third since 2009
• Displacement of tenants and rise in family homelessness
Shortage of properties to rent
Data and chart: daft.ie
‘Rent Stability in the Private Rented Sector’
Report (September 2014)
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Escalation of rents and rising family homelessness
Rents unaffordable, especially for single people on average
income in Dublin (41% of net income using PRTB/CSO data)
Report rules out rent regulation due to potential negative
impacts on supply (evidence?)
Report recommends other measures:
better market information, extending rent review period,
raising rent supplement limits, tax incentives for
landlords/supply, voluntary rent certainty leases (impact?)
Minister for the Environment initially opposed to ‘rent control’
but now committed to ‘rent certainty’.
Rent certainty
“I am not talking about rent controls. It’s a different model, this is
rent certainty… What we’re looking at is a process whereby
people can have some certainty as regards rent into the future
while [housing] supply is being dealt with.”
(Minister Alan Kelly, 28 February 2015)
“It’s understood the proposals would involve landlords not being
able to increase rent beyond the rise in the consumer price index
unless they can show that upgrades have been carried out on a
rental property that would justify an above inflation rent
increase.” (thejournal.ie, 28 February 2015)
Rent Control vs. Rent Certainty
Rent Control
Rent Certainty
[Blake v Attorney General]
Permanent freeze on rents at historic
levels.
Regulate rate of rent increases for
defined period (e.g. duration of
tenancy) only.
No effective mechanism for recovery
of possession or review of rent.
RTA mechanisms for recovery of
property and 12-month review period
unaffected.
Basis of scheme arbitrary, unfair,
irrational.
Model connected to pressing social
need and based on objective criteria
(e.g. CPI index).
Conclusions
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Distinct phases in evolution of security of tenure in
Ireland that mirror typologies of rent control
Balance of interests sought in 3rd phase framework
Underpinned new schemes to prolong and deepen
security of tenure
Security of tenure is inextricably linked with rents
Rising rents posing a new challenge to security after
of tenure a decade of 3rd generation rent controls
Rent regulation under consideration