Page 93 - AAGLA-JUNE 2022

Member Update
AThe Irish Times: “Report Claims Rent Controls Have
Backfired and Worsened Crisis”
ccording to an article published now only able to minimally increase rent at their properties by “The Irish Times,” the Irish because they are subject to rent control.
government’s regulations meant to control the pricing of residential rent have “backfired” and worsened housing affordability by leading to an increase in rents. The article cites a study by economist, Jim Power,
who concluded that rent (price) controls imposed in certain areas by the Irish government in 2016 have caused significant “rent rigidities” and has resulted in lacking maintenance at rental properties subject to rent control.
The economist’s report further notes that smaller landlords have exited the rental market due to the price controls put in place, and have been replaced by much larger, institutional landlords that build newer properties exempt from rent control. Instead of reducing rents charged, Irish rent control has encouraged landlords at the bottom of the market to leave the business because they can no longer charge market rent, and they are then being replaced by newer properties with much higher rents. In his report, the economist, Jim Power suggests that the majority of landlords exiting the market are those who in the past charged rents that were lower than market rates and are
Economist Power, who presented research attesting to the difficulties faced by smaller landlords, said private non- institutional landlords are finding the current regulatory and taxation environment “very challenging.” “This is causing an exit of private landlords from the market and is reducing the supply of rental property and putting upward pressure on rents at a time when significant increases are required to satisfy demand and create a functioning residential property market,” he said.
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APARTMENT AGE • JUNE 2022 93