A LAW TO cap rent increases at 2% in rent pressure zones (RPZ) has passed in the Dáil.

The legislation would see rent capped in line with inflation, if that rate is lower than a 2% rise. 

The Residential Tenancies Bill also aims to provide for tenancies of unlimited as part of Government plans to create “a sustainable housing system” in Ireland.

The bill now goes to the President for signing and the rent increase cap will apply immediately upon enactment. 

Welcoming the passing of the legislation, Housing Minister Darragh O’Brien said: “This bill’s swift passage through the Oireachtas demonstrates the Government’s commitment to improving the situation for renters in Ireland.

The Residential Tenancies Bill has now passed in #DáilÉireann.

❇️ Capping any rent increases in RPZs at the level of inflation or at 2%, whichever is lower
❇️ Provides for tenancies of unlimited duration #HousingforAll @DeptHousingIRL pic.twitter.com/poeNhNHUnl

— Darragh O'Brien (@DarraghOBrienTD) December 8, 2021

“When introducing the legislation to link any rent increases to inflation in July, I was very clear on the need to carefully monitor inflation.

“At that time, inflation averaged 0.73% per annum over the previous three years but had risen to 1.6% per annum in the year ending June 2021.”

He said that given “the unexpectedly fast rise” in the Harmonised Index of Consumer Prices, he engaged with the Office of the Attorney General to “secure Government approval” to introduce a 2% cap on rent increases in RPZs.

O’Brien added that the legislation “respects the constitutionally protected property rights of landlords and aims to safeguard continued investment in the sector” by existing and new landlords to deliver rental accommodation.

While Sinn Féin did not block the bill, the party’s housing spokesman Eoin Ó Broin argued that its efforts to safeguard against rent increases above 2% and inflation are “meaningless”, saying that research by both the Residential Tenancies Board and Daft.ie show that rent increases have “consistently breached” previous caps. 

While his party did not stand in the way of the legislation, Ó Broin said it remains “fundamentally flawed”. 

“Secondly, this bill allows for cumulative percentage rent increases; a clause which the Minister himself removed from renters’ legislation last year. He is now inserting this back in.”

Meanwhile, a new bill to replace Strategic Housing Developments (SHD) with a new planning process for Large Scale Residential Developments has passed.

The new legislation would also restore decision-making to local authorities regarding planning for large scale developments (LRDs).

Minister O’Brien said it would combine the return of primary decision-making function to local authorities, while retaining “some of the positive elements of the Strategic Housing Development arrangements”, such as mandatory pre-application consultation, quality of applications submitted and decision timelines.

Home ownership

The SHD scheme has caused controversy as it allows developers to bypass local authorities and apply directly to An Bord Pleanála for planning permission if developments are a specific size, a move intended to speed up the provision of housing and student accommodation.

O’Brien said the new LRD legislation will allow for enhanced public participation through the restoration of the appeal mechanism to An Bord Pleanála.

It also requires local authorities to ensure home ownership as a tenure type is provided for and estimated in their housing strategies.

The guidelines are aimed at ensuring new houses and duplex units in housing developments are not bulk-purchased by commercial institutional investors, according to O’Brien. 

The bill will now be presented to the President for signature.