https://www.propertywire.com/news/new-study-finds-rentcontrols-fail-tenants-landlords-and-homeowners/
Topic: Has the rent control policy been a success in Ireland?
Introduction:
The government program of Rent control places a limit on the amount that each
landlord demands to lease a home or even renewing a lease. Rent control has laws
that are usually enacted by municipalities, and all details vary widely, most are
intended to keep and live in a cost affordable and friendly for lower income residents.
Since the 16th of July 2021, Harmonized Index of Consumer Prices (HICP) values
are being used to set and make reviews rent in the Reduced Pressure Zone (RPZ)
Which lets you know the valve is functioning as intended. RPZ has backflow
preventor, but which also have an intermediate relief valve that opens to the
atmosphere if both check valves should fail, this will not increase by more than a
general inflation.
From the 11th of December 2021, the rules have been amended around the setting
of the rent for a tenancy in the RPZ
The most recent study of the Irish property market has found that the introduction of
rent control fails tenants, landlord, and homeowners. DJ Alexander Ltd, part of the
Lomond group which is the largest lettings and estate agency in Scotland, has
looked at the newest research by economist Kim Power and has commissioned in
the Republic of Ireland by the insatiate of the professional auctioneers and valuers
and the Irish Property owners’ Association.
The research, which covers many of the changes which had occurred and the
proposed for the private rented sector in Scotland and the rest of the UK have found
that constantly changing regulation and more punitive tax regimes have led to more
individual landlords and that rents, rather than reducing, have increases because of
the new policies.
Body:
The report has found that there was evidence that the creation of Rent pressure zones
created a two-tier rental market, that helps reduce the amount of quality accommodations
whilst also impacting on the value of all private properties in an area. Rent control areas
were found to reduce property values for all owners not just landlords and had limited
impact on the levels of rent charged.
It concluded that there was no evidence of a net increase in the number of properties on
the market and that the legislative and financial changes led to individual and small-scale
landlords leaving the market and being replaced by institutional landlords who charge
higher rents than were previously in place. Rents as a result are at least as high as they were
prior to the implementation of regulations, if not greater.
While rent control seems to benefit current residents in the short term, it diminishes
affordability in the long run, promotes gentrification, and has detrimental effects on the
neighborhood it surrounds, according to findings from earlier study by the Washingtonbased Brookings Institution.
Rent control, according to the basic theory of supply and demand, causes housing
shortages, reducing the number of low-income people who can live in a city. Worse, rent
control tends to increase demand for housing and thus rents — in other areas.
It was abolished for most residential properties by the Housing Act 1988. However, it
remains for some people who live in council houses.
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