Taoiseach Micheál Martin has been criticised for saying that more private investment is needed to address the housing crisis.
Fianna Fáil and Fine Gael have come under pressure on housing after claiming that around 40,000 new homes would be built in 2024, when the final figure was 30,330 homes.
Mr Martin said that more private investment is needed to boost rental supply as the State is already investing “huge” amounts to subsidise the sector.
Opposition politicians have criticised his comments as “doubling down on the disastrous policies” the parties had adopted to date.
Average rents in Ireland increased by more than 85 per cent in the 12 years to 2022, the third highest increase in the EU.
In the 12 months to May last year, rents increased by 5.9 per cent for existing tenancies and 9.1 per cent for new renters.
A 2 per cent cap on rent increases per year in certain areas, also known as rent pressure zones (RPZs), was introduced in 2016 to attempt to dampen spiralling rent costs.
These regulations are due to expire on December 31st this year.
It has been argued that RPZs are somewhat ineffective as there is evidence the 2 per cent cap is not being complied with.
In an interview with the Irish Examiner published on Saturday, Mr Martin said that the Government will review all housing policies in order to try and boost housing supply, including whether to abolish RPZs at the end of the year.
The Housing Commission report recommended that RPZs should be replaced with a “rent reference” system, which Mr Martin said that the coalition would consider.
Mr Martin also said there were “huge subsidies from the State” in the housing sector already, and that Ireland needs the private sector “involved in apartment building, in greater rental supply”.
He said that pension funds “have a role in terms of financing construction” in Ireland and should not have become the subject “of total negativity”.
Speaking on RTÉ’s This Week programme on Sunday, Mr Martin doubled down on his comments.
“It’s clear to me from the discussions I’ve had with various government departments and officials in respect of the housing question, that we need to pivot more strongly to getting private sector investment into the market,” Mr Martin said.
“The Government is spending huge amounts of money on housing, record levels, the state can’t do it all on its own, and we have to be honest about that, not just this government but the Oireachtas more generally.”
Asked if taking difficult decisions on housing included abolishing rent pressure zones, he said: “I believe it will entail very difficult political decisions.”
Asked if RPZs are a problem, Mr Martin said he has been told the “reactionary” approach to the rental market and the uncertainty in the sector is a “huge” problem.
Opposition politicians have criticised the Taoiseach’s comments, and called for a ban on rent increases.
Sinn Féin’s housing spokesperson Eoin Ó Broin said that a three-year ban on rent increases and a full month’s rent returned to every private renter was needed.
He said institutional investors have in recent weeks lobbied to have RPZs “scrapped”, and if they were successful it would lead to “even more dramatic increases in rents”.
“Tenants have seen the cost of renting increase dramatically in recent years,” he said.
“The latest data from the Residential Tenancies Board shows that rents for both new and existing renters are significantly higher than the RPZ 2 per cent cap.
He added: “Rent regulation is not the reason for sluggish new housing supply. This is down to the failures of Fianna Fáil and Fine Gael’s housing plan.”
People Before Profit TD Richard Boyd Barrett said he was “aghast” at Mr Martin’s comments, and argued a state construction company was needed.
“It’s clear that Micheál Martin and the Government are doubling down on the disastrous policies that have got us to where we are,” he said.
“What we need is the very opposite of what Micheál Martin has said. The greed for profit of private investors, vulture funds, corporate landlords and property speculators is the reason we have a housing crisis.
“These people have no interest in delivering the affordable and secure homes that are desperately needed. What we need is the state itself to dramatically expand the delivery of public and affordable housing. We need an immediate rent freeze, we need rent controls that reduce rents, and we need to reinstate the eviction ban.
“These immediate measures should be complemented by the establishment and ramping-up of a state construction company to build the tens of thousands of social and affordable homes that we need.”
The Irish Property Owners Association (IPOA) welcomed Mr Martin’s comments, claiming that the regulations had “contributed to inefficiencies that adversely impact the supply of rental housing and the ability of landlords to operate in the rental market”.
Chairwoman of the IPOA Mary Conway said: “We have long advocated for a rational, balanced approach to Ireland’s rental market, including the abolishment of RPZs in recognition of the damage they have done to the rental market and their role in driving landlords out.”
