Sinn Féin’s Mary Lou McDonald says people don’t stand a chance in saving for a mortgage deposit when paying such high rents. She says the Covid-19 pandemic has hit ‘generation rent’ very hard. | Read more #politics: https://t.co/i7QdFQIed7 pic.twitter.com/utU5WINL4I
— RTÉ News (@rtenews) June 2, 2021
Taoiseach Micheál Martin says Sinn Féin lacks honesty on the housing issue. He accuses the party of opposing housing projects that could have led to affordable prices for renters. | Read more #politics: https://t.co/i7QdFQIed7 pic.twitter.com/SMBhkiJwJP
— RTÉ News (@rtenews) June 2, 2021
This afternoon.
The Dáil at the Convention Centre.
Taoiseach Micheal Martin said that the Minister for Housing Darragh O’Brien will “bring in legislation quickly” to close a loophole allowing an 8% rent hike for tenants.
However, he said that the Government is limited by the Constitution on introducing a blanket ban on rent increases.
Sinn Féin leader Mary Lou McDonald said that “an entire generation is locked out of home ownership” because of high rents.
Not only do they face the prospect of the Government “cutting their income support”, she added, but they also face a “double whammy” of an 8% rent hike.
Loophole allowing 8% rent hike to be closed – Taoiseach (RTE)
m e h o l e is clueless, he forgets that his mismanagement of Covid has reduced his voter base considerably.
Young people won’t fall for his tripe. Worst taoiseach ever.
All Mehole cares about is that he got to be Taoiseach, even half a Taoiseach is better than none at all.
The government are somewhat hiding behind the Constitution here. Surely a challenge to rent freeze or rent control legislation is in the interests of all, to get some definitive guidance from the Supreme Court in what is a crisis time? Are they afraid of the answer? Legal opinion on the matter is not entirely settled.
Needless to say, the problem with RPZs now is that it builds in a 4% automatic rent increase for tenants with many of the Reits content to let apartments lie idle so as to maintain the rent at its current level rather than rent it at slightly lower amount which is a bit perverse.
Another way to improve matters for young folks in RPZs is to set the max annual rental amount at 1-1.5%.
Wait and see – rental and housing costs are going to blow up in the governments face again sooner rather than later. Personally I think Darragh O’Brien has a terrible manner and smacks of a dodgy used-car salesman.
Agreed, I love the way people forget that it was Coveney responsible for that ridiculous 4% rule.
REITs let apartment lie idle, as the way they are valued in these structures is based on the rent assumed. If the rent dropped, its not just the monetary aspect of lower rent, which they don’t care about much, its the write down of the entire block.
So for example, lets simplify and say the value an apartment on 10 years of rent, the annual rent is at 24k, this apartment is then valued in their books at 240k
If the rent dropped to say 16k per annum, the apartment is now worth 160k, they are down 8k in rent but would have to book an 80k write down in the year this happened. Multiply that by x number of similar apartments in the same block and you see the issue.
They are heavily incentivised to keep rents high in Dublin.
I am not even a Sinn Fein supporter but I am simply stupefied at the mess the government is making of the housing crisis- short-termism, constantly reactive as opposed to proactive, tinkering at the edges with half-baked inititatives and compounding the problem of inflated rental and housing costs and a Housing Minister filled with a unparalleled hubristic zeal that you just know it won’t end well. O’Brien will be long gone with the damage is done “regretting” some mistakes after the fact like Eoghan Murphy.
It perplexes me.
So for example, lets simplify and say the value an apartment on 10 years of rent, the annual rent is at 24k, this apartment is then valued in their books at 240k
If the rent dropped to say 16k per annum, the apartment is now worth 160k, they are down 8k in rent but would have to book an 80k write down in the year this happened. Multiply that by x number of similar apartments in the same block and you see the issue.
What happens if they don’t rent an apartment?
The annual rent is now 0K, the apartment is then valued in their books as 0K…so they need to write down the full 240K?
No, because its all about the “expected” yield. i.e. how close to market rents you are.
If you drop rent significantly, RPZ rules mean you cant bring it back up just as much should things improve. The value of these apartments is largely speculative – based on an assumed rental yield and the potential for said yield to increase 4% per annum as per RPZ rules.
It’s all a house of cards propped up by false expectations – like 2008 all over again
No Cian, there is a level where they can be rented, the point i was making in my deliberate over simplified example, is that getting full market rent, 100% occupancy, is not as important as you would think to these companies, whose profits are more based on IFRS rules than stone cold cash handed over to them like a more traditional landlord.
As Mr T pointed out, their yield is based on market level rents, where if you control a large supply of apartments, you can change the market value by not renting them out, drip feeding, waiting etc.
It needs to stop, government needs to act, else I can see a rosy future for SF
Simon Coveney made up the 4% thing a few years ago, it’s hardly written into the constitution, untouchabley protected. He’s just passing the responsibility off, “we have been advised”. He needs to be challenged on that and show the actual evidence because it’s total nonsense.
Rent free in his head?
Given that choice I’d rather sleep under the stars thanks……
Wouldn’t fancy seeing the world through his eyes.
Did yee see that post by The Ditch about FF Deirdre Conroy’s old landlady blog? Really awful stuff, her comment about Syrian children is particularly vile.
Whoops I missed it in previous post. Sorry Broadsheet, always on the pulse of things!
I know five year olds who take more responsibility for their poop