Rent controls don't work

A good friend works for a high-end developer who does some commercial and some residential.

He says their focus is pivoting away from apartments and totally toward hotels in 2023 as that's where the biggest margin is.

The state guaranteeing 100% occupancy for tens of thousands of hotel and B&B beds is a factor, as well as the 2% cap on rent increases for tenancies in new builds.
 
I'm not sure that media reports of units NOT getting built is a useful indicator that RPZ legislation in 2016 was intended to encourage new btl construction. Seems a very circuitous and convoluted strategy if true.
 
NoRegretsCoyote said:
A good friend works for a high-end developer who does some commercial and some residential.

He says their focus is pivoting away from apartments and totally toward hotels in 2023 as that's where the biggest margin is.

The state guaranteeing 100% occupancy for tens of thousands of hotel and B&B beds is a factor, as well as the 2% cap on rent increases for tenancies in new builds.
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I'm not sure how robust that income will be.

www.irishexaminer.com

Some hotels are still owed up to €400k for housing refugees

Fewer than 20 staff in the Department of Integration are processing invoices to 700 providers, with a source confirming that, before Christmas, just four staff were dealing with payments to hotels, B&Bs, and nursing homes
www.irishexaminer.com www.irishexaminer.com
 
AlbacoreA said:
I'm not sure that media reports of units NOT getting built is a useful indicator that RPZ legislation in 2016 was intended to encourage new btl construction. Seems a very circuitous and convoluted strategy if true.
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That's not what I stated. My point is that if developers are not building BTR units that are exempt from controls, then it is very likely that had controls been applied to new units from day one, even fewer properties would have been built over the last 6 years or so.
 
Leo said:
then it is very likely that had controls been applied to new units from day one, even fewer properties would have been built over the last 6 years or so.
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Also bear in mind the post-2021 regime (2% or HICP inflation pa, whichever is lower, irrespective of market rent) is a lot worse for landlords than the 2016-2021 regime (up to 4% pa until market rent is recovered)
 
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That seems like general market conditions are what's driving the lack of construction. Nothing to do with rpz at all.
 
As a temporary measure, the goal was not to discourage development as well as additional investment in the sector. To be honest, even as an individual landlord, it did not bother me too much up to a point. I knew I was a couple of hundred euros under the market with half of it going into my tax bill. As a permanent measure with only a 2% maximum increase despite high inflation, RPZ do discourage investment as investors planned their future gains.
 
Anyway my point is you could buy an existing old property that's never been rented before and set whatever rent you like. After which point you can incrementally increase it within the rules. You aren't stuck with below market rate rents in that scenario.

Which makes rpz pointless in terms of capping rents.
 
azerty said:
As a temporary measure, the goal was not to discourage development as well as additional investment in the sector. To be honest, even as an individual landlord, it did not bother me too much up to a point. I knew I was a couple of hundred euros under the market with half of it going into my tax bill. As a permanent measure with only a 2% maximum increase despite high inflation, RPZ do discourage investment as investors planned their future gains.
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The value of the property is also reduced if it's stuck on low rent. As it's not as attractive to other LLs.
 
AlbacoreA said:
Anyway my point is you could buy an existing old property that's never been rented before and set whatever rent you like. After which point you can incrementally increase it within the rules. You aren't stuck with below market rate rents in that scenario.

Which makes rpz pointless in terms of capping rents.
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As RPZ have become permanent de facto, new LL know they will be stuck eventually and would take that into account before investing.
RPZ are not pointless for existing tenants... However, pretty useless for anyone less and pushing everyone's else rent up
 
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