Landlords are leaving the market in their thousands, blaming excessive taxation, rent control and constantly changing laws. Figures from the Residential Tenancies Board (RTB) have shown 5,615 eviction notices have been served on tenants between the middle of 2019 and the end of 2021. Just over half (55%) of these were because the landlord intended to sell. A further 23% said they were going to move a relative into the property. While the number of notices to quit slowed during the lockdowns, it has picked up pace in recent months, with 841 served in the second quarter of last year, 887 in the third and 958 in the fourth. Margaret McCormick, spokeswoman for the Irish Property Owners’ Association (IPOA), said she believed the true number of landlords leaving the market was even higher. Business Bulletin She explained: "The RTB figures only reflect the number who have served notice on their tenants. A lot of landlords sold up when their tenants left to move home during the pandemic, leaving the properties empty." Rules introduced to protect tenants from eviction during the pandemic only applied if they could prove they were in rent arrears due to Covid, and were only taken up by 475 people as of mid-2021. Ms McCormick cited research from estate agent Sherry FitzGerald last autumn, which estimated 22,000 small investors had left the Irish property market between 2016 and 2020. She said landlords and property investors wanted to see stability in the rental market and to have confidence in it. "But every time they turn around the legislation has changed again," she said. "The rules on Rent Pressure Zones in particular keep changing. It is not sustainable for a lot of people to stay in the market." She added that the tax burden on private landlords was too high, as it was not treated as a business, from which legitimate expenses could be deducted. Many pay tax rates of 55% on rental income. Rent increases did not even keep up with inflation, Ms McCormick claimed, and rent control was creating a black market and reducing the amount of accommodation available to renters. Ms McCormick said: "There was a time when an older landlord might have passed a rental property on to their relatives, but the younger ones don’t want the hassle. It’s too problematic, too difficult." Research conducted by the RTB last year found the main reason given by landlords for selling their rental properties was that they ‘no longer wished to be a landlord’ (55%), followed by it ‘was not profitable’ (28%). Sinn Féin housing spokesman Eoin Ó Broin said the latest RTB figures were "very alarming". He added: "We are seeing a surge in eviction notices, coupled with a dramatic increase in the number of landlords selling up. This is not a new trend. The number of available properties in the private rental market has been falling since 2017." He called for a ban on rent increases for three years for new and existing tenancies, and increased investment in affordable cost rental homes for those earning too much for social housing but not enough to buy. In a statement, the Department of Housing said it was committed to supporting the continued participation of landlords in the rental market. It said: "A changing regulatory environment, which has been necessary to ensure a fair and effective residential rental sector that balances tenants’ rights and landlords’ responsibilities, has resulted in a challenging compliance framework for some. "In other cases, the recent rise in house prices has enabled some landlords, including 'accidental landlords,' to exit negative equity. As a consequence, they have taken the opportunity to unwind their investments." It said the Housing for All plan was intended to tackle pressures in the rental market in the short term, as well as the issue of longer-term supply needs, and that taxation measures and tenancy laws were under review.
FAQs
What happens when rent control is imposed on a market? ›
Answer and Explanation: Rent control is a form of a price ceiling in the market for apartments. A binding price ceiling will force price to below its market equilibrium price and thus quantity demanded will exceed quantity supplied.
Is rent control a negative externality? ›Rent controlled properties create substantial negative externalities on the nearby housing market, lowering the amenity value of these neighborhoods and making them less desirable places to live.
What did landlords challenge New York's longstanding rent stabilization regime? ›The landlords' challenge centered on the argument that the rent stabilization laws constitute a “taking” of property without just compensation, violating the Fifth Amendment.
Are there still rent-controlled apartments in New York? ›Yes. In fact, New York City has some of the oldest rent control laws in the country. New York state's legislature is responsible for rent laws in New York City and other areas. The rental prices for rent-stabilized apartments are set by the NYC Rent Guidelines Board.
What are two disadvantages of rent controls? ›- Limited profits with a cap on how much you can raise the rent.
- Less flexibility to adapt to the market.
- Tougher regulations and compliance which can incur extra administrative costs or work.
Housing shortages, increased rents for uncontrolled dwellings, and reduced residential mobility emerge as unintended consequences of rent control. Rent control negatively affects housing quality, and its impact on homeownership trends varies, with conflicting results from different studies.
Who benefits the most from rent control? ›Although rent control does decrease housing costs for some low income households, the savings from living in these units tends to accrue disproportionately to: 1) households who happen to be in the right place at the right time; and 2) households in higher income brackets with greater ability to secure and remain in ...
Why do people not like rent control? ›Economists are widely against the idea of rent control. They argue that rent control would deter developers from building more houses, which would only worsen the housing supply crisis in the United States.
Why do economists hate rent control? ›The opponents of rent control invariably claim that high housing costs are entirely the result of government interference with the market through exclusionary land-use regulations and that elimi- nating them will allow the market to become fully competitive and solve the supply problem.
Can an apartment stop being rent stabilized NYC? ›There are a couple of situations in which a rent stabilized apartment may be subject to deregulation upon vacancy: Apartments under rent stabilization because the owner receives J-51 or 421-a tax benefits may become deregulated upon vacancy (or sooner if the owner follows the appropriate notice requirements).
How much can they raise rent stabilized NYC? ›
| First year | Second year | |
|---|---|---|
| 1-year lease | 3% increase | N/A |
| 2-year lease | 2.75% increase | 3.20% increase |
Under the Rent Stabilization Law, an owner may begin an eviction proceeding when the current lease expires, but only after the tenant is given written notice that the lease will not be renewed. This notice must be served at least 90 and not more than 150 days before the current lease term expires.
How much can a landlord raise rent in NYC in 2024? ›For a two-year lease beginning on or after October 1, 2023, and on or before September 30, 2024: For the first year of the lease: 2.75% For the second year of the lease: 3.20% of the amount lawfully charged in the first year, excluding any increases other than the first-year guideline increase.
How many rent-controlled apartments are left in NYC? ›According to the 2021 NYC Housing and Vacancy Survey (HVS), there are about 16,400 rent controlled apartments and about 1,048,860 rent stabilized apartments.
What is the difference between rent control and rent stabilized NYC? ›Rent control is the older of the two systems of rent regulation. It dates back to the housing shortage immediately following World War II and generally applies to buildings constructed before 1947. Rent stabilization generally covers buildings built after 1947 and before 1974, and apartments removed from rent control.
What is the impact of rent control on the US housing market? ›Economists generally have found that, while rent-control policies do restrict rents at more affordable rates, they can also lead to a reduction of rental stock and maintenance, thereby exacerbating affordable housing shortages.
When rent control is imposed on a market for apartments? ›Effects of rent control Rent controls require that landlords set apartment prices below the equilibrium price level. An immediate effect is an apartment rental shortage (excess demand for apartments), because at the regulated price the quantity of apartments demanded is greater than the quantity supplied.
Do rent controls cause black markets? ›Black Market Activity: In some cases, rent control can lead to a black market for rental housing, with landlords finding alternative ways to increase revenue, such as charging fees not regulated by rent control laws.
What are the effects of rent control on supply and demand? ›Rent control ordinances are associated with lower growth rates in the supply of rental housing and with higher rental price growth in the broader market. Rents are too high because multi-family housing and the state's housing stock have failed to expand commensurately with the ever-growing population.