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Rent rises - what can the Gov do about it?

24

Comments

  • Registered Users, Registered Users 2 Posts: 35,186 ✭✭✭✭Hotblack Desiato


    I don't know what time period you are referring to above, but selling social housing to council tenants cheaply has been a thing since at least the early 1970s.

    © 1982 Sinclair Research Ltd



  • Registered Users, Registered Users 2 Posts: 19,970 ✭✭✭✭Donald Trump



    It's a vicious cycle. Public bodies won't/can't build. So they pump money into the market from their "bottomless" purses. Which leaves the market in a state which makes it even more difficult to do things the way they should do them.



  • Registered Users, Registered Users 2 Posts: 1,786 ✭✭✭DownByTheGarden


    Very well put. The only thing I would point out is that identical properties dont have identical fitouts or service from the owners, so the rental value of one could be higher than the other easily depending on those things.

    People and politicians looking for more restrictions on landlords are the very definition of Turkeys voting for Christmas.

    Post edited by DownByTheGarden on


  • Registered Users, Registered Users 2 Posts: 22,077 ✭✭✭✭ELM327


    I just don't get why we waste so much money on HAP. Let's build social houses. En masse. But - and here's the crux of it - don't give them away or have rights to purchase for cents on the dollar. You have a social house as long as, and only that long, as you need it. It is not inheritable.



  • Moderators, Science, Health & Environment Moderators Posts: 19,799 Mod ✭✭✭✭Sam Russell


    Quote @ancapailldorcha

    [ By the way, Sam, could you explain this please?

    FF were in thrall to the construction industry. The only building they favoured was the building of a tent at the Galway Races - which gives a good indication as to what drove them.

    I live in the UK and would have thought a government in thrall to the construction sector would be building left, right and centre.]

    The benefit for the construction industry is not the Gov building houses - it is by the Gov providing the climate that favours a particular part of the economy. The Gov have not done significant programmes of building homes since the 1970s.

    It is be giving out planning permission and rezoning land so houses can be built in unsuitable locations like flood plains, or where there is no infrastructure like sewers, electricity supply, schools, shops, etc. It is by giving first-time house purchasers a grant that is immediately pocketed by builders of houses who simply add the grant to the asking price. It is by allowing developers to form limited liability companies to build a scheme and then those companies going bust - with no comeback. It is by preventing improvements in building regulations that require decent levels of insulation, minimum accommodation standards. It is by not putting in place a Building Standards Enforcement regime such that standards are adhered to, and certified by qualified practitioners.

    There is plenty of evidence that such tactics were employed that benefited developers, while being paid for by ever rising house prices, and costly refits. The mica problem in Donegal and the fire risk in apartment blocks is evidence of poor standards enforcement.



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  • Registered Users, Registered Users 2 Posts: 6,328 ✭✭✭alias no.9


    Not sure about the fit out TBH, it's too subjective and open to abuse as a price control benchmark. If you look at countries with functioning rental markets, they typically rent unfurnished with white walls. Tenants are free to furnish and decorate as they wish but must return it in the same condition.

    As for the levels of service from the owners, every tenant deserves a timely response to any reasonable request but in reality, what they should have is autonomy, like with the freedom to decorate. Taking an extreme example, our minimum rental standards require the provision of a microwave, an appliance that can cost as little as €75 or less than 0.5% of the average annual rent for new tenancies. If the microwave fails, and the tenant is waiting a week for a new one, that's poor service but in reality, our regulations are focused on the wrong thing, something like a microwave should be the tenants responsibility, they should be free to choose whatever microwave they want, or none, without having to to figure out where to store whatever POS the landlord provided, same for bed, sofa, and other furnishings. Larger appliances like fridge freezer, cooker, washing machine are probably better on the LL side but the regs should call out what a timely response to any issues should be.



  • Registered Users, Registered Users 2 Posts: 1,786 ✭✭✭DownByTheGarden


    Thats never going to happen in Ireland though.

    As you have pointed out you cant go unfurnished here because it is illegal. So you are left furnishing with different quality goods depending on what quality a landlord is willing to pay for, given that normal wear and tear seems to be anything up to cooking on a campfire on top of the coffee table in the living room. Never mind that people in Ireland dont want unfurnished (some do, but not many, especially when they realize they will have to pay for the goods themselves).

    Also response times vary. If a landlord is taking a week to respond because he wont pay for an agency then his service is different to one who pays a fee to an agency to respond in one day. He will need to recover that outlay.

    You might even get a landlord who redecorates one a year compared to one who only does it once every 5 years. For instance we would repaint the walls in our house every 10 years, but in a rental you would get the same wear in only 1 year. We bought 2 identical washing machines 5 years ago. Put one in our house and one in the apartment. Within a year and a half we had to replace the one in the apartment when the tenants left and we had to show the place again. The drawer full of gunk and cracked, filter blocked stuck, door hanging off, and generally filthy. The one in our house still looks and operates like the day we bought it. Some landlords would have left the tenant with that washing machine for another few years since they cant get the money back from replacing it.

    Point is you cant price control properties based on type because they are not identical.



  • Moderators, Science, Health & Environment Moderators Posts: 19,799 Mod ✭✭✭✭Sam Russell


    Of course properties can be valued as to rent level and also likely sale value - that is the job of auctioneers.

    What is required is to beef up the RTB so that it can get the rent charged on all residential properties, can get a reliable description of such properties, can inspect properties if required, and be able to set rents. When you know all the rents, then outliers will be apparent.

    They should also be inspecting properties that are claimed to be below standard.



  • Registered Users Posts: 1,273 ✭✭✭The Spider


    People use the German example all the time without taking into account the context of German historical renting, it has a lot to do with rebuilding Germany after half of it was turned to rubble after WW2. you can read about it better than I can explain it at the link below

    https://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/amp



  • Registered Users Posts: 3,208 ✭✭✭Good loser




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  • Moderators, Science, Health & Environment Moderators Posts: 19,799 Mod ✭✭✭✭Sam Russell




  • Registered Users Posts: 398 ✭✭jimmybobbyschweiz




  • Moderators, Science, Health & Environment Moderators Posts: 19,799 Mod ✭✭✭✭Sam Russell


    I was listening to an item on the radio about the Tenters area of Dublin 8, as it is 100 years old, centred on Oscar Square.

    It was built (using the remnants of British funding) in 2022 to provide much needed housing for Dubliners, 50% of whom lived in appalling conditions in tenements, renting just one room for a family.

    It was built as the kind of housing they should have as opposed to the kind of housing they could afford, with front gardens for flowers and rear gardens for vegetables. It was a tenant rent/purchase arrangement where the term was 40 years. The tenants had to be living in the city, the man must have a job, and the family must have at least three children. Most came from the tenements.

    The rent collector set up shop to collect the rents every week and two stories were told. One of the woman who came to pay here rent and asked where were the family upstairs. She was told the whole house was hers - all the rooms were hers. Another one who came to pay the rent, and the collector said that there was no rent due. The forty year term was up, and the house was yours.

    Now that approach might well work now. If only we had politicians with vision that this showed of the new state 100 years ago.



  • Registered Users, Registered Users 2 Posts: 29,712 ✭✭✭✭Wanderer78


    modern society is far different in many ways, even financing property is now far more complex, when you start to look at the operations of credit and bond markets etc, but something is clearly catastrophically failing now in regards meeting this critical need. its clearly obvious the intended political approach of significantly reducing the public ownership of property, and the encouragement of more privately owned, is now starting to fail dramatically, the only solution here is the reintroduction of public accommodation, both housing and apartments, and to maintain a higher level of public ownership than is of current, an enormous amount of government borrowing is needed for this, but our current and previous governments have been deeply unwilling to accept this reality, hence their current falling.....



  • Moderators, Science, Health & Environment Moderators Posts: 19,799 Mod ✭✭✭✭Sam Russell


    If one accepts the precept that 35% of housing has to be social housing (the old council houses), then the state has to provide it. We accept that most people must have publicly funded health, publicly funded education, etc., then why does the political expect everyone to own their own home?

    Now it can be argued that the 35% should be, say, 25%, but the Gov sent the ration at 10%. Not all renters require subsidy, and rents should be means tested where they are subsidised.

    Also, private renters should have security of tenure - if the comply with the lease (not destroy the gaff or be anti-social) and pay the rent. Current interpretation of the property rights in the constitution favours the landlord 100%.



  • Registered Users, Registered Users 2 Posts: 29,712 ✭✭✭✭Wanderer78


    we re currently experiencing a major ideological failure, and id argue its actually a collapse, to the point, we dont really know what to do about it, and that also includes the opposition, we re also not the only country experiencing this problem, as its a wide scale global one. it could be argued, and i do partly agree with this, this approach worked for many older generations, in regards home ownership, many of which, probably would have never been able to obtain ownership without these polices, but this has now placed younger generations at great risk

    renting public accommodation should be means tested, a significant amount of public borrowing will be required to build, which means many will probably need to pay market rate, or near market rate, to guarantee repayment of these loans.

    our current approach is actually greatly exposing both renters and landlords, in order to have a functioning private market, protective measures for both entities are critical in order for these markets to function and exist, its clearly obvious, if we continue as is, this part of our property markets will more than likely also collapse, i strongly disagree with your last comment, even though an understandable one, there are failures in both sides of this story



  • Moderators, Science, Health & Environment Moderators Posts: 19,799 Mod ✭✭✭✭Sam Russell


    @Wanderer78

    The constitution guarantees the property rights of owners of property. That is clearly the situation. The courts have interpreted that is clear, and if it were not so clearly stated, then the tenant could not be evicted just because the landlord chooses to sell, or needs it for some nephew or other (perhaps non-existent) relative.

    We need a referendum to sort this.



  • Registered Users, Registered Users 2 Posts: 29,712 ✭✭✭✭Wanderer78


    again, i somewhat disagree, the nuances of being a landlord arent clear cut, there can be large amounts of debt still owed, and personal assets used in order to gain access to that credit, of course taxes to be paid and other costs, then of course theres the continual threat of a tenant refusing to leave and/or wrecking the place, this has all become very very messy, but i will agree, we probably do need referenda to help solve this one, as this has become a great danger for our economy and our society



  • Moderators, Science, Health & Environment Moderators Posts: 19,799 Mod ✭✭✭✭Sam Russell


    If a tenant does not pay the agreed rent, or destroys the gaff, then they should be out on their ear within a very short time.

    However, if they have a lease ad behave themselves, they are secure in he home, as they are in most EU counties.

    The financial situation of the landlord should have no bearing on the matter.



  • Registered Users, Registered Users 2 Posts: 29,712 ✭✭✭✭Wanderer78


    there clearly needs to be a functioning eviction process, but in order to have that, there must be a functioning public housing system to support it, as people still need to be housed no matter what, making people homeless isnt a solution, even if tenents wreck places.

    its understandable why we re now introducing eviction bans, but equal protections must also be included for landlords, an eviction ban alone simply wont work, both parties must be protected, in order to maintain a functioning system.

    the reality is, the financial situation of the landlord, and of the property, must be included, there simply cannot be a situation whereby many landlords are facing default, and potential homelessness themselves, one of the main lessons from 08 should be the fact, if theres a significant amount of defaults on mortgages, it potentially could bring the whole system done, i.e. ignoring this fact simply is not an option, and must be included



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  • Registered Users, Registered Users 2 Posts: 28,083 ✭✭✭✭blanch152


    It is all linked.

    Say you own 5 properties. You want rent of €8,000 a month to cover repayments and refurbishment and tax. That would normally mean an average rent of €1,600 a month. However, the delays in evictions are such that you have found that on average you lose about 12 months rent each year from those properties due to difficulties evicting tenants that don't pay or do serious damage to the properties. As a result you charge €2,000 per month to make sure you break even on the deal. In a good year, when you have 0 problem tenants, you do well, in a bad year with 3 or 4 problem tenants you lose big.

    The net result is that rents are 25% higher than they should be because of the difficulties in securing evictions, so it is not another matter that landlords should be able to evict the non-payers in weeks rather than months, instead it is key to bringing rents down.



  • Moderators, Science, Health & Environment Moderators Posts: 19,799 Mod ✭✭✭✭Sam Russell


    Rents are higher than they should be because of lack of supply.

    It is this lack of supply that allows landlords to borrow money to buy properties that repayments more than pay the repayments.

    If the rent is paid and tenants create no problems, then you argument fails. The RTB needs to be fully staffed and given sufficient powers to enforce the rules.



  • Moderators, Society & Culture Moderators Posts: 39,614 Mod ✭✭✭✭Gumbo


    Stop rent rises in conjunction with a fairer tax system for landlords.

    Id sign up for that.



  • Registered Users, Registered Users 2 Posts: 28,083 ✭✭✭✭blanch152


    Of course if rent is paid and tenants create no problems, then my argument fails.

    However, we live in the real world, and there are huge problems with unpaid rent and tenants creating problems and destroying property.

    As a result, rents are higher, that is the truth.



  • Moderators, Science, Health & Environment Moderators Posts: 19,799 Mod ✭✭✭✭Sam Russell


    Yes, but that's because there is no quick reliable way of evicting such tenants. The RTB needs to be resourced properly, and have a rapid response to such matters.

    They also need to bring action against errant landlords.



  • Registered Users, Registered Users 2 Posts: 28,083 ✭✭✭✭blanch152


    Until the issue of eviction is addressed, there will be a significant premium built in to rents. It is probably the biggest factor in the above-average rents.



  • Posts: 0 [Deleted User]


    supply is the issue


    landlords who feel entitled to charge a rent that covers all of their costs (including full cost of finance) each month, leaving them with a property paid for without any investment themselves, can only exist in a market where tenants aren't free to move to other properties.


    any landlord who runs their costs in this way without reference to the fact that they come out with an asset worth hundreds of thousands of euros at the end of the mortgage is either pretend clueless or clueless but either way they ought not to be treated seriously



  • Registered Users, Registered Users 2 Posts: 22,077 ✭✭✭✭ELM327


    And a timely eviction method. If I had a choice between a tax reduction or a proper eviction method as a LL I'd take the latter. Between 20% and 30% of the rent you pay is likely a bad debt provision.



  • Posts: 0 [Deleted User]


    Rentals in Ireland are already highly regulated. Every time there has been government intervention it has resulted in landlords leaving the market which restricts the number of units available and results in higher rents. The only way for rents to come down is to have competition either by encouraging building with government funds or by making the market more appealing for small investors to come back. A review by the RTB has said that a further 20% of landlords intending leaving over the next 5 years. The current government don't want to provide incentives to landlords as they have managed to convince the public that they are enemy number 1 and their greed is responsible for the current crisis, they cant now be seen to offer them supports. A lack of strategic government spending has resulted in this crisis and they need to get the finger out before they allow it to get worse.



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  • Moderators, Society & Culture Moderators Posts: 39,614 Mod ✭✭✭✭Gumbo


    100%.

    2 years to get rid of unruly tenants at the moment. All the while they are not paying rent.

    Rapid action by the RTB for both sides is a win win. Go after bad tenants and landlords equally.



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