Jan O'Sullivan (Limerick City, Labour) | Oireachtas source

I must oppose this amendment. Aside from the disproportionate administrative burden that this would place both on the Department and on housing authorities, it must be accepted that the main focus of any rental limit review process is to ensure that pricing of maximum rental limits does not distort the market, while at the same time providing opportunities for tenants to acquire accommodation. That is a difficult balance at times. Due care needs to be taken that pricing be established at natural supply and demand conditions, as opposed to by reference to the State’s intervention, in order to avoid setting maximum rental limits that could force families, especially those on low incomes, into competing with pricing floors they cannot afford.

The current policy for maximum rental limits within the rent supplement scheme is an 18-month cycle. The timing represents a balance between the rental arrangements of tenants - tenancy agreements are normally for approximately a year - and the need to ensure sufficient reviews to keep apace of the market. A shorter period to review maximum rent limits, such as quarterly, would place a significant degree of ongoing pressure to change rental agreements mid-agreement on tenants and landlords alike. If there is an agreement between tenant and landlord for a year, this amendment may require intervention in such agreements.

Additionally, quicker review times would make the Department more reactive to the market as opposed to helping to hold the market steady during inflationary rental periods. Conversely, it would then be more aggressive in declining markets, where tenants will be forced to consider alternative accommodation as landlords continue to seek previous rents agreed. It must be remembered that rents can both increase and decrease. Reviewing maximum rent limits quarterly would not allow the market any time to adjust naturally to the imposition of new limits, therefore distorting the natural market rent level. The effect of a shorter review period would not lead to an overall increase in rental supply available to HAP recipients but would instead create adverse pricing impacts on the rental market, which could do more harm to households seeking accommodation in that sector. The frequency proposed in the amendment would not be practical.