# Rent freeze - when does it end?



## paddynaas (23 Oct 2018)

Hello folks


I have been onto the RTB several times and they dont seem to have an answer to my question, and i get the impression they couldn't be bothered getting an answer for me either.

I have a house rented out in a rent controlled area. The rent is well under market rental values and has been for a few years. I increased the rent in June 2014, i think it was and couldnt increase it for a year, within that year, the rent freeze came in. My argument was that I was unable to increase the rent and then after a year, I was again unable to increase by more than 4%.

The RTB told me that the rent free and maximum increase for 4% per year was to finish in 2019 and I would be able to increase my rent inline with other local rental properties.

So, My question is does anyone know when this will happen?

Many thanks Paddy


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## Sarenco (23 Oct 2018)

The legislation provides for the automatic expiry of the designation of an area as a rent pressure zone (RPZ) after three years.  So, in the case of most areas that have been designated as RPZs that means 24 December 2019.

Some posters think it is inevitable that the legislation will be amended to extend this period but I think that would be constitutionally suspect.

https://www.askaboutmoney.com/threa...an-rpz-be-extended-beyond-three-years.208048/


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## Magpie (23 Oct 2018)

Does that mean that the end of next year all landlords can put the rent up to whatever they like? Because that would be......disastrous.


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## Sarenco (23 Oct 2018)

Magpie said:


> Does that mean that the end of next year all landlords can put the rent up to whatever they like? Because that would be......disastrous.


No.

Outside a RPZ (or once an area ceases to be a RPZ), the rent cannot be set above the local market rents for similar properties and three examples for similar properties in the locality, or a comparable area, must be presented to demonstrate this.


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## Magpie (23 Oct 2018)

Yes but if the RPZ ends then all an agent has to do is put up all their rents as much as they like and then use 3 of their properties to "prove" that those new rents are now the market rents. It would be a shell game and rents would rocket, as they did when agents found out about the incoming RPZ's before the tenants did and pushed through massive rent rises right before the start date.


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## llgon (23 Oct 2018)

Magpie said:


> when agents found out about the incoming RPZ's before the tenants did and pushed through massive rent rises right before the start date.



Don't remember this happening!

Any evidence to show that agents found out before tenants? 
And of massive rent rises right before the start date?


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## Sarenco (23 Oct 2018)

Magpie said:


> ... as they did when agents found out about the incoming RPZ's before the tenants did and pushed through massive rent rises right before the start date.


Most landlords (or their agents) weren’t in a position to raise rents at that time because of the 2-year embargo on rent reviews introduced by the previous Government and there is no evidence that there was a spike in rents at that time.

The RPZ regime has certainly resulted in reduced rents than would otherwise be the case for some sitting tenants but it hasn’t resulted in lower overall rents. 

Artificially trying to control rents doesn’t work - it’s counter-productive.


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## Magpie (23 Oct 2018)

llgon said:


> Don't remember this happening!
> 
> Any evidence to show that agents found out before tenants?
> And of massive rent rises right before the start date?


 

Yes. My own rent was raised 46% (they tried for 60%) one week before the announcement of the RPZ, and I know that the agent did the same to several other local tenants, and they were hardly the only ones.


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## Sarenco (23 Oct 2018)

@Magpie

You must have been on a pretty sweet deal if you were paying almost 50% below the prevailing market rent at the time.


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## llgon (23 Oct 2018)

Magpie said:


> Yes. My own rent was raised 46% (they tried for 60%) one week before the announcement of the RPZ, and I know that the agent did the same to several other local tenants, and they were hardly the only ones.



When the RPZs were introduced by Simon Coveney in 2016 it was with immediate effect.  I would think that Mr Coveney himself did not know very far in advance that this was going to happen. As Sarenco has implied it sounds like your local agent was wisely trying to clear his/her books of rentals that were so far below the market rate.  As a matter of interest when did your rent review at the time commence?


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## Magpie (24 Oct 2018)

My RPZ was one of the later ones added, it was not with immediate effect and the agents absolutely knew before it was publicly announced (a staff member told me this) and the rent was not far below the market rent. All rents jumped massively at the same time in the area. Going from an average of 900-1000 to 1400-1600 in a matter of months.


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## Magpie (24 Oct 2018)

Sarenco said:


> @Magpie
> 
> You must have been on a pretty sweet deal if you were paying almost 50% below the prevailing market rent at the time.


No. House was not in great repair and the rents all climbed massively in a very short period


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## paddynaas (24 Oct 2018)

Many thanks for the replies especially @Sarenco 

Hard to know what to do, should I send a letter and raise the rent by the (1.04)^2 or should i hold off for dec 2019 and then send a latter informing the tenants of the rent increase.

Tenants are on the HAP scheme and are absolutely lovely btw (thankfully)


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## llgon (24 Oct 2018)

Magpie said:


> My RPZ was one of the later ones added, it was not with immediate effect and the agents absolutely knew before it was publicly announced (a staff member told me this) and the rent was not far below the market rent. All rents jumped massively at the same time in the area. Going from an average of 900-1000 to 1400-1600 in a matter of months.



Fair enough, there are obviously a lot of flaws with the RPZ regime and I think its introduction did have a knock-on effect in areas that weren't zoned. Landlords in these areas learned that they needed to raise their rents to market levels quickly or they would be stuck if they were added to the RPZs.  In a lot of cases they would have been justified in doing this but in your case it sounds like it wasn't.

Does the RTB Rent Index for your area reflect the 50% increase that happened?


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## moneymakeover (24 Oct 2018)

paddynaas said:


> Many thanks for the replies especially @Sarenco
> 
> Hard to know what to do, should I send a letter and raise the rent by the (1.04)^2 or should i hold off for dec 2019 and then send a latter informing the tenants of the rent increase.
> 
> Tenants are on the HAP scheme and are absolutely lovely btw (thankfully)


Fyi
1.04^2=1.08


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## PaxmanK (29 Oct 2018)

Would this do it?

Drop a letter stating the new rent in the letterbox just after midnight on the night if the expiry.  Include lots of examples of other rents in the area.  And state that the new rent takes effect 3 months later.

Also isn't the rule on rpz if rents that's rents have to rise by a certain amount more than 3 quarters in a row.  I bet there are areas now where that doesn't happen.


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## paddynaas (1 Nov 2018)

PaxmanK said:


> Also isn't the rule on rpz if rents that's rents have to rise by a certain amount more than 3 quarters in a row.  I bet there are areas now where that doesn't happen.



PAxmanK what do you mean by this - I dont follow you thanks


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## PaxmanK (1 Nov 2018)

paddynaas said:


> PAxmanK what do you mean by this - I dont follow you thanks



There is a legal definition of a rent pressure zone somewhere though I can't locate it.  Some areas should be near falling out of the defining criteria now already.


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## Purple (7 Nov 2018)

There's no chance of the RPZ's being removed. It would be political suicide. They will roll on and on.


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## PaxmanK (8 Nov 2018)

And it's economic and social suicide to keep them.
But i think you are right politicians care more about their chances of getting votes than about what really happens to the people who vote for them.
People thinking rent control will will help them and giving their vote based on that is turkeys voting for Christmas.
They just dont realise it


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## Magpie (8 Nov 2018)

Why is it you think that removing rent controls will help the people having their rent controlled? I think the politicians would prefer for various reasons that I and people like me are not made homeless when our rents suddenly rise to levels we can't afford. What is it that you think we don't realise?


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## Leo (8 Nov 2018)

Magpie said:


> Why is it you think that removing rent controls will help the people having their rent controlled?



The current system encourages all landlords in RPZs to increase rent by 4% pa, and actually punishes those who don't. How is that good for tenants?


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## Sarenco (8 Nov 2018)

Paul Krugman (nobel prize winning economist) on rent controls:-

_"The analysis of rent control is among the best-understood issues in all of economics, and -- among economists, anyway -- one of the least controversial. In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that ''a ceiling on rents reduces the quality and quantity of housing.'' Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand. Sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go -- and the absence of new apartment construction, despite those high rents, because landlords fear that controls will be extended? Predictable. Bitter relations between tenants and landlords, with an arms race between ever-more ingenious strategies to force tenants out -- what yesterday's article oddly described as ''free-market horror stories'' -- and constantly proliferating regulations designed to block those strategies? Predictable."_


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## Magpie (8 Nov 2018)

Leo said:


> The current system encourages all landlords in RPZs to increase rent by 4% pa, and actually punishes those who don't. How is that good for tenants?



Rents go up with or without controls. This way they can only go up 4% every two years instead of 10, 20, 50% whenever the landlord likes. Please explain how it is good for tenants to have their rent go up 20% instead of 4%?


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## Leo (8 Nov 2018)

Magpie said:


> Rents go up with or without controls. This way they can only go up 4% every two years instead of 10, 20, 50% whenever the landlord likes. Please explain how it is good for tenants to have their rent go up 20% instead of 4%?



No, it's 4%pa, and a landlord who doesn't increase their rent by the maximum allowed each time the review comes around is being punished by effectively devaluing their property. 

What evidence have you of individual properties upping their rents by 10, 20 or 50% per annum prior to the introduction of this legislation? In an open market, if market rate rents could rise by 10%pa, we'd have no shortage of rental units on the market.

What evidence is there of the RPZ legislation having any positive effect on the market? How do rent controls encourage an increase in supply?


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## Magpie (8 Nov 2018)

Leo said:


> What evidence have you of individual properties upping their rents by 10, 20 or 50% per annum prior to the introduction of this legislation? In an open market, if market rate rents could rise by 10%pa, we'd have no shortage of rental units on the market.
> 
> What evidence is there of the RPZ legislation having any positive effect on the market? How do rent controls encourage an increase in supply?



The evidence I have is my climbing rent before the RPZ! And everyone elses. 

Tenants don't care much about a positive effect on the market when they are faced with rent increases that they can't afford. Are you seriously suggesting that keeping rents down is bad for the people paying those rents? And that rents increasing is somehow good for them? Or is your viewpoint more about what is good for landlords?


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## PaxmanK (9 Nov 2018)

I'll just leave this here.

https://youtu.be/JZygWICdi4U

This is what's happening in Ireland now.
Only people in properties where the rent is stuck below market rate are winning now.  And when their landlord stops fixing things and starts cutting costs or getting out of the market they will be losing too.


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## llgon (9 Nov 2018)

Magpie said:


> The evidence I have is my climbing rent before the RPZ! And everyone elses.



You are clearly aware from earlier in the thread that it's because of the introduction of RPZs that your rent rose.  You are arguing against your own point here.


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## Magpie (9 Nov 2018)

I'm actually not. I've been renting for a long time, and rents rose long before the intro of the RPZ (obviously). That they climbed more at that intro was due to the mishandling of the scheme and the greed of landlords looking to make ever more profit. 

I'm still waiting to hear why uncontrolled rent rises are so good for tenants.


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## PaxmanK (9 Nov 2018)

Magpie said:


> I'm actually not. I've been renting for a long time, and rents rose long before the intro of the RPZ (obviously). That they climbed more at that intro was due to the mishandling of the scheme and the greed of landlords looking to make ever more profit.
> 
> I'm still waiting to hear why uncontrolled rent rises are so good for tenants.



You are probably.not too far away from finding out first hand yourself.  But in the meantime.

Check out the link I sent you for a quick lesson.
Then you can look up various studies on it if you want to go deeper.


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## Leo (9 Nov 2018)

Magpie said:


> The evidence I have is my climbing rent before the RPZ! And everyone elses.



So over an extended period, your rent increased by 10% or more pa prior to the introduction of this legislation? Note, even if it did, one anecdotal case does not constitute evidence. 



Magpie said:


> Tenants don't care much about a positive effect on the market when they are faced with rent increases that they can't afford.



They really should, as positive effects would include a healthy supply of rental units resulting in natural competition on pricing.



Magpie said:


> Are you seriously suggesting that keeping rents down is bad for the people paying those rents? And that rents increasing is somehow good for them? Or is your viewpoint more about what is good for landlords?



Where did I suggest that? If you read it properly, my point is that legislation that encourages landlords to increase rents by 4%pa, or suffer otherwise, can not do any good for tenants.


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## Purple (9 Nov 2018)

Leo said:


> The current system encourages all landlords in RPZs to increase rent by 4% pa, and actually punishes those who don't. How is that good for tenants?


My landlord reduced my rent by €100 per month 4 years ago and hasn't increased it since.


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## Purple (9 Nov 2018)

Leo said:


> They really should, as positive effects would include a healthy supply of rental units resulting in natural competition on pricing.


That presupposes a functioning construction sector. Ours is more concerned with political lobbying than driving efficiency within its own sector and input costs dominated by taxes, levies and charges as well as a grossly inefficient planning and approvals process.


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## Leo (9 Nov 2018)

Purple said:


> That presupposes a functioning construction sector. Ours is more concerned with political lobbying than driving efficiency within its own sector and input costs dominated by taxes, levies and charges as well as a grossly inefficient planning and approvals process.



Absolutely, but if Magpie;s suggestion of 10+% rent rises across the board was anything close to a reality, then even our broken model would be delivering more units due to the demand that would create.


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## Magpie (10 Nov 2018)

It is absolutely a reality, which anyone long term renting knows. Where I live rents have climbed from 850+ to 1750+ for the same properties in less than six years.


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## Thirsty (10 Nov 2018)

And in that same time period, in the same catchment, how has the number of rentals changed?

Rental costs are very sensitive to demand & supply; when the number of available properties drops, the rent increases.


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## PaxmanK (12 Nov 2018)

interesting Daft rental report out today.
IMO the cause is rent controls.
But I bet there will be more rent bowing to the populist view.  Sure Murphy only has to last another few months.  He can wreck the sector some more before he heads off to another position and washes his hands.  Just like Coveny did.
People should not forget that those two are the pricemary cause of their woes.


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## Magpie (12 Nov 2018)

Thirsty said:


> And in that same time period, in the same catchment, how has the number of rentals changed?
> 
> 
> Rental costs are very sensitive to demand & supply; when the number of available properties drops, the rent increases.




In the area I am speaking about, there are many more rentals now than there were then. Rent increases are not down to lowering of supply.


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## Magpie (12 Nov 2018)

I think many of you are looking at it from the LL/societal point of view and don't appreciate the needs or perspective of people renting.


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## PaxmanK (12 Nov 2018)

Many landlords have rented before so are familiar with both sides of the equation.  What many people lack is an understanding of what a landlord must get out of it to make it viable.  That then trickles on down through supply in many ways.


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## Thirsty (12 Nov 2018)

"Rent increases are not down to lowering of supply."

So if there's plenty of availability then you can pick and choose?

"..don't appreciate the needs or perspective of people renting"

Well there I'd disagree. I'm in business and tenants are my customers, so their needs and perspective are very much part of my business.

What I really don't appreciate is the epithet 'greedy' being used as a prefix to my business.

If I were to sell my properties, they would be sold for the best price I could get in the market. No-one would have the least word of censure. I would not be described as a 'greedy' homeowner.

Landlords will rent properties for the best price they can get on the market. That's good business practice.


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## moneymakeover (19 Nov 2018)

Am correct thinking RPZ will expire in Dublin in December 2019?


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## moneymakeover (30 Nov 2018)

To answer my own question

From:
http://rebuildingireland.ie/news/faq-rent-pressure-zones/


*Can the designation as a Rent Pressure Zone be extended beyond three years?*
No. The designation lapses after three years.

*What happens after the designation as a Rent Pressure Zone expires or is lifted?*
Once the area ceases to be designated as a Rent Pressure Zone, the rent review process will revert to normal. However, the minimum period of one year between rent reviews will continue apply.


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## moneymakeover (11 Dec 2018)

It seems sensible to wait until RPZ expires in January 2020 before increasing rent


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## Sarenco (11 Dec 2018)

moneymakeover said:


> It seems sensible to wait until RPZ expires in January 2020 before increasing rent


Why so?


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## moneymakeover (11 Dec 2018)

Because there is 1 year limit on increases

And in January 2020 there will be no RPZ to affect the size of the increase


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## Lightning (11 Dec 2018)

Assuming it does not get extended again which it probably will.


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## Sarenco (11 Dec 2018)

moneymakeover said:


> Because there is 1 year limit on increases
> 
> And in January 2020 there will be no RPZ to affect the size of the increase


Well, 24 December 2019 is obviously over a year away.


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## moneymakeover (11 Dec 2018)

Ah sarenco are you suggesting hiking the rent on Christmas Eve?


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