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Housing Commission Recommends ‘Reference Rent’ Reform

The long-awaited, and much speculated-upon, report of the Housing Commission, which was leaked in part earlier this week, was finally published in full yesterday (link below). 

This report is a major examination of Irish housing policy, and it says quite a lot in its 255 pages, but does it really tell us anything?

Actually, it does. The report provides a set of 83 recommendations and insights that will be relevant for developers and homebuilders on the ground trying to deliver the quarter of a million new homes needed.

At the most basic level, the report starts by recognising Ireland’s housing deficit and recommending it be prioritised, calling for ‘emergency action’ to address the crisis. 
Among the key recommendations that will be particularly relevant to developers and homebuilders is the establishment of a Housing Delivery Oversight Executive, tasked with coordinating the delivery of housing and addressing blockages to housing delivery. 

Supporting the delivery of enabling infrastructure in advance of housing construction is highlighted as a key recommendation, focusing on the need for ‘advanced infrastructure’ to support housing development. The report also provides guidance on addressing the housing deficit, promoting sustainable and inclusive communities, and navigating the evolving landscape of housing policy and construction practices.

In terms of forward planning, the report, while taking a more data-driven approach to housing delivery than seen previously, talks about the importance of housing policy that encourages integrated and inclusive communities to ensure diverse and sustainable residential areas. It’s worth noting that supporting biodiversity measures in the development of residential areas is highlighted as an important consideration for developers and homebuilders. 

‘Reference Rents’

The report states that housing must be a ‘unique national priority’ with the purpose of supporting social cohesion and economic development. There are a number of recommendations that, if adopted, will impact the private rented sector. As expected, the report calls for the reform and consolidation of standards for all rented dwellings through a single, nationwide dwelling standards risk-based inspection process. Also, it calls for the current standards for rental accommodation in private and cost-rental homes to be amended to enable the lettings without white goods appliances.

Critically, the Housing Commission appears to be following IMF guidance around rent pressure zones, proposing that these be replaced with a system that ties rates to local buildings of a similar quality. Specifically, recommendation #33 calls for the State to regulate market rents fairly and effectively by reforming the current system of rent regulation and establishing a system of ‘Reference Rents’. The recommendation sets out that this reform should be informed by evidence-based reviews on the impact of regulated market rents on rented housing supply, accessibility and affordability, and such reviews should be conducted on a regular basis and rent regulations amended where appropriate.

It is worth reading this report in full, understanding that these are recommendations only at this stage.

Download the report in full, together with recommendation status and next steps here.

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group