The Government is moving towards changing the current Rent Pressure Zones (RPZs) system ahead of a crunch Cabinet meeting on the matter next Tuesday.
Intensive discussions have already taken place on this politically sensitive issue between the Taoiseach, the Tánaiste and a number of ministers.
Further talks are set to take place on Monday night in advance of the Cabinet meeting on Tuesday morning.
The current legislation on RPZs caps annual rent increases at 2% or at the rate of inflation, whichever is lower.
However, it will lapse at the end of December and the Government is now likely to begin preparing new legislation which will change the present system.
This will, the Government believes, “give certainty to the market”.
Among the proposals under consideration is a plan to legislate to give existing tenants similar protections to those that exist under the RPZs system but in the future rents in new buildings would be higher.
The Taoiseach has consistently stated that a stable climate has to be created to incentivise developers to invest in the domestic rental market.
Senior figures in the coalition believe that “doing nothing” is not an option and if the RPZs legislation is allowed to lapse, then it would be a return to market rents for tenants.
To avoid this, new legislation will be brought before the Oireachtas.
The Housing Commission last year recommended “reference rents” which would tie rates to local homes of a similar quality.
However, opposition parties have warned that any move to abolish the “modest protections” provided by the RPZs will be strongly resisted.
Sinn Féin’s housing spokesperson Eoin Ó Broin said ripping off renters is not a solution.
He wanted any changes to be opposed and called for a major demonstration on housing to be planned outside Leinster House on 17 June.
Social Democrats TD Sinéad Gibney said the removal of the Rent Pressure Zones will push people into poverty and homelessness.
Labour’s housing spokesperson Conor Sheehan urged the Government to “see sense and abandon their plan” to allow landlords to reset rents in between tenancies.
He said Minister for Housing James Browne cannot claim to be on “renters’ side”, and also allow landlords to increase rents in between tenancies without any protection for renters.
“The proposed creation of a two-tier rental system would only serve to further increase rents,” Mr Sheehan said.
“While RPZs have been very ham-fisted, they are the only bit of protection renters have in the private rented market at the moment,” he added.
Minister of State Charlie McConalogue confirmed on RTÉ’s Saturday with Colm Ó Mongáin that clarity would be brought to the future of the RPZs next week.
