RPZs extended with rent increases capped at 4%

The Government has given approval for the reform and extension of the Rent Pressure Zone (RPZ) model.

In 2019, the Fermoy Local Electoral Area (LEA) was deemed a rent pressure zone, as was the Midleton LEA, while the Cobh LEA was designated in 2017 and again in 2019, and the Mallow LEA in 2020.

Key provisions were inserted into the Residential Tenancies (No. 2) Bill 2021, published on 17 June, to reform the rent increase restrictions in RPZs. These reforms took effect upon the passage of the Bill, on July 5.

Minister for Housing, Local Government and Heritage, Darragh O’Brien TD welcomed the news.

“Improving the standards, security and affordability for renters is a priority for me and for the Government. We are making significant changes in recognition of the fact that tenants continue to face persistent pressures in the rental and housing markets,” he said.

The current cap of 4% on annual rent increases will be replaced and rents in RPZs can now only go up, if necessary, in line with general inflation as recorded in the Harmonised Index of Consumer Prices (HICP). This will result in far lower rent increases for the estimated 74% of all tenancies which are in RPZs. HICP averaged 0.73% over the past three years.

“I have always acknowledged that for some, the 4% cap on rent increases in RPZs became a target rather than a limit. We are now taking action to ensure that tenants will only pay rent increases, if required to, which are in line with general inflation, which is currently below 2%.

“The linkage with the HICP respects the constitutionally protected property rights of landlords and aims to safeguard continued investment in the sector by existing and new landlords to deliver the requisite supply of high-quality rental accommodation,” Minister O’Brien added.

DEPOSITS

For those outside of RPZs, the provision for bi-annual rent reviews is extended for an additional three years from 1 January 2022 to 31 December 2024. This provides rent certainty for tenants outside of RPZs for a minimum 2 year period at a time.

“In addition to significantly reducing the level of rent increases in RPZs, the Bill will also restrict the level of upfront payments required of tenants, to a total value that does not exceed two months’ rent to cover any deposit and one month rent in advance. We are also extending protections for those most impacted by Covid-19, in arrears and at risk of losing their tenancy. Such tenants will be protected from rent increases and/or evictions until January 2022.

“All tenants, including students and the most vulnerable tenants, are set to gain significant protections under this Bill,” concluded Minister O’Brien.