Housing Inequity

No Quick Fix

Despite successive governments’ efforts to curb rising homelessness, affordability issues and housing inequity with multiple funding streams there is seemingly no quick fix. The urgency to build quickly with little regard for the future has meant that construction issues and building defects persist.  An estimated €1 billion is likely to be spent to deal with construction defects.  Any industry that regulates itself will be susceptible to conflicts of interest, inconsistent application of standards and inadequate oversight.

The intent of changes made to a building control system is to ensure stronger compliance with building standards and to provide consumers with a better means of assessing new construction. Without an effective and independent inspection system in place, there really is no mechanism to ensure that buildings comply with standards.

In June 2017 existing planning policy was changed to allow for a temporary system of “fast-track planning”, enabling applications for large-scale housing developments of 100+ units to by-pass local planning and go directly to  An Bord Pleanála (ABP). In March 2021 Government introduced changes to the planning framework to curtail the purchase of homes by institutional investors and ringfence a portion of all units for first-time buyers and for affordable purchase, in addition to the 10 per cent reserved for social housing under the Affordable Housing Bill.

Budget 2021 committed €5.69 billion in funding to the Department of Housing Local Government and Heritage (DHPLG). This included €3.3 billion to be spent on housing, 24% more than 2020 and the highest single investment in housing by government in any year to date. But increases in budget spending, Ireland’s liberal approach to planning policy, decades of cheap credit availability, a rising population and changing demographics are the recipe that has led to a series of most unfortunate events.

Updates and changes to regulations, including Construction Products Regulation 2013, Building Control (Amendment) Regulations 2014, Minimum Standards in Rented Houses Regulations and the CIRI register have come largely in response to widespread building defects, revealed through several cases associated with a lack of transparency, compliance with building practices and independent oversight

Priory Hall in Dublin is perhaps the best-known example of a scheme developed with no oversight of and adherence to standards. The 189-unit development was condemned, with residents being forced to vacate their homes by a court order in 2011 due to serious fire hazards and safety concerns. More recently the Crescent Building in Dublin 12 constructed in 2003 has been deemed a fire safety hazard with inadequate fire stopping throughout and requiring a new fire alarm system. Before 2014 amendments, compliance with building safety standards were so light touch that a Fire Safety Certificate for an apartment complex was issued by the Building Control Authority provided the works or building was constructed in accordance with the plans and specifications submitted.

Pyrite and mica are now synonymous with the poor application of regulations and standards of construction.  Multiple areas of North Dublin, as well as Meath, Kildare, Wicklow, and other areas in the east have been affected by pyritic heave.  In 2010 it was estimated that around 20,000 claims were made to HomeBond in relation to pyrite. Despite the HomeBond scheme (underwritten by Allianz) having a latent defects element to the policy, HomeBond did not accept liability.  With mounting pressure on the Government at the time, the Pyrite Remediation Scheme was set up to remediate dwellings significantly damaged caused by the swelling of hardcore under ground floor slabs.  Several thousand properties in the northwest, including Mayo and Donegal, are now presenting with serious structural defects having been constructed with concrete containing around 17% mica mineral content causing the buildings to crumble.  With so many properties affected the Government was forced to establish the Defective Concrete Blocks Grant Scheme.

While the new building control regime brought in new roles and administrative procedures, it is still possible for real estate developers to employ their own certifiers directly. Creating a project-specific company and employing a registered professional directly is allowed under the new regulations.  Meanwhile a Local Planning Authority (LPA) is only required to validate statutory certificates. Clearly, there are limitations to the amendments and there are concerns in the residential sector that the self-certification regime remains entirely in the control of a developer.

Despite successive governments’ efforts to deal with the housing issue there is seemingly no quick fix. The urgency to build quickly with little regard for the future has meant that construction issues and building defects persist.  Property defects could be avoided if we have fit-for-purpose regulation combined with an independent inspection and verification regime.

Compliance Chart

A New Level of Complexity

Given recent experience in Ireland, the construction sector must operate to the highest of standards and be accountable for its actions.  Regulation of the sector is critical but revisions and additions to an already complex regulatory environment adds an additional level of complexity for compliance and dilemma for enforcement.  Appropriate regulation, with consistent application across the local authority areas, is fundamental to the development of a strong and sustainable construction sector.

Emissions from the construction industry reached the highest ever level in 2019. The use of fossil fuels (coal, oil and natural gas) for heating, lighting and cooking as well as an increasing energy demand for air-conditioner cooling with worsening extreme heat means that together, construction and building operations account for nearly 40% of global energy-related CO2 emissions. Addressing the industry’s CO2 emissions is crucial to delivering climate-action objectives.

As new construction is expected to double the worlds building stock by 2060, an increasing number of institutional investors are recognising that environmental, social, and governance (ESG) factors can materially affect a company’s performance and market value and are key to reducing risk. These socially conscious investors consider the ESG standards as the means to future-proof the value of investments.

The Irish Government’s current policy initiative, Project Ireland 2040, indicates that by 2040 an additional one million people will live in Ireland and an additional two-thirds of a million people will work here.  This means that an immediate priority is to increase the overall housing supply to between 30,000-35,000 housing units annually by 2027.  Private equity and Build-To-Rent (BTR) have a vital role to play in meeting these goals.  Partnering with international investors, an increasing number of Irish based developers are bringing BTR projects to market.

On the investment side, according to both CBRE and Savills, investors increasingly consider that ESG criteria have a role to play in successful residential development and are targeting investment opportunities which fulfil these criteria. The ESG strategy published by Hines and its Dutch joint-venture investment partner APG for the mixed-use development at Cherrywood in South County Dublin outlines the approach being taken to minimise construction and operational impacts on the environment and the ways in which energy efficiency, health & wellness and social inclusivity is being promoted within the development.

On the construction side, building green and decarbonising the construction sector should mitigate the worst effects of climate breakdown and there have been positive developments in the construction sector in Ireland. The Irish Green Building Council (IGBC), an organisation aligned with the World Green Building Council (WGBC), promotes the acceleration of building sustainable homes.  Its Home Performance Index (HPI), a new voluntary building code for home building in Ireland, is awarded based on the standard of a home’s design, construction, and environmental sustainability. Developers who set out to build new homes to this standard can also avail of loan discounts through Home Building Finance Ireland (HBFI).

Ireland's growing population, rising property prices and demand for long-term private residential accommodation are fundamental drivers for investment into the BTR sector and construction but revisions and additions to an already complex regulatory environment adds an additional level of complexity for compliance and dilemma for enforcement.

The question of who pays the additional costs associated with meeting new ESG targets in development, construction and living amenities remains for now unanswered.  While investors focus on the bottom line, tenants already challenged by high rental costs, seem unlikely to agree to any additional outlays.

Given recent experience in Ireland, the construction sector must operate to the highest of standards and be accountable for its actions. If managed correctly, the interconnectedness between building, rental, green and ESG standards could enhance accommodation standards overall. Regular inspection to independently verify standards along with enforcement where contraventions are identified should ensure the best outcome for all stakeholders.

RTB Rent Index

RTB/ESRI Q1 2021 Rent Index

The RTB/ESRI Q1 2021 Report produced by the Residential Tenancies Board and the Economic and Social Research Institute tracks price developments in the Irish rented housing market. The current Report is based on rents paid on 15,899 private tenancies registered with the RTB in Q1 2021 compared to the 16,235 tenancies registered in Q4 2020.

The decline in the number of tenancies registered with the RTB in this quarter is most likely linked to the increased Covid-19 restrictions in place during the first quarter of 2021. There were a higher number of tenancies registered in Q3 and Q4 of 2020 and a lower number of registrations in the first two quarters of 2020 compared to the same period in 2019. Renewal tenancies were not included in the sample used to generate Q1 2021 Report; tenancies that commenced before 24th December 2016, landlords were required to register a tenancy as a Part IV Renewal after 4 years. For tenancies that commenced after 24th December 2016 landlords are required to register the tenancy as a Part IV Renewal after 6 years. This change means that no Part IV Renewals will be registered until Q1 2023.

Dublin and the Greater Dublin Area (GDA) accounted for 55.8 per cent of all tenancy agreements registered. In terms of property type, 60.4 per cent of the tenancies were for apartments. In Dublin, 77.2 per cent of tenancies were for apartments while it was 43.8 per cent and 50.6 per cent in the rest of the country and the GDA respectively.

On a quarterly basis, rents rose in all except 5 counties in Q1 2021, with 17 counties recording annual growth of more than 5 per cent in the first quarter of 2021. The highest standardised average rent was in Dublin at €1,820 per month while the lowest monthly rent was in Leitrim where the standardised average stood at €596 per month.

The national standardised average rent stood at €1,320 in Q1 2021 – an increase of just under €33 compared to Q4 2020.  On an annualised basis, rents grew by 4.5 per cent in the first quarter of 2021. This growth rate is higher than that of the previous quarter (3.3 per cent) and the highest since the 4.7 per cent annual growth recorded in Q1 2020.

The standardised average rent for houses was €1,304 per month in Q1 2021, a rise of 2.6 per cent on Q4 2020 and a rise of 7.0 per cent year-on-year. The standardised rent for different housing types varied between €1,121 per month for a one-bed house to €1,442 for a house with four or more bedrooms; inflationary pressures continue to be greatest (year-on-year) for houses with four or more bedrooms.

The standardised average rent for apartments stood at €1,351 per month in Q1 2021, an increase of 2.3 per cent on Q4 2020 and a rise of 2.2 per cent year-on-year. The standardised rent for different apartment types varied between €1,207 per month for a one-bed apartment, €1,374 for a two-bed apartment, and €1,574 for an apartment with three or more bedrooms. The year-on-year increase for two-bed apartments was 2.7 per cent while apartments with three or more bedrooms had the highest year-on-year growth at 4.9 per cent.

The economic context determines the drivers of rental inflation in Ireland. Having grown at 4.7 per cent per annum in Q1 2020, the national rate of inflation dropped to 1.6 per cent in the second quarter of 2020 as the Irish economy and society experienced various levels of restrictions.  In Q3 and Q4 of 2020, the annual inflation rate increased to 2.5 and 3.3 per cent remaining below the pre-pandemic level of inflation. The 4.5 per cent annual growth rate Q1 2021, similar to the rate recorded in late 2019, suggests a return to pre-pandemic levels of rental price inflation.

Dublin has seen a greater initial drop and slower rebound in rental price growth since the onset of the Covid-19 pandemic than elsewhere. This reflects the impact of Covid-19 on both the demand and supply sides of the market in the short term.

Highlight Rent in Context

The Wider Context

The more accurate information is at RTB tenancy registration, the more efficient the process is in the wider context of seeking to maintain the standard and safety of accommodation generally across the private rented sector.

The Residential Tenancies Board (RTB) was set up under the Residential Tenancies Act 2004 to deal with the regulation of private rented sector housing.

Registering a new tenancy with the RTB as required under the Residential Tenancies Amendment Act 2019 is not the last link in the chain for a landlord with a new tenancy. The RTB uses this information to maintain a publicly available property register as well as for a variety of intergovernmental requirements.  All landlords are responsible for registration and are expected to update the register when information about a tenancy changes.

At present, new tenancies must be registered with the RTB within a month of the start of the tenancy. Each new tenancy is allocated a Registered Tenancy (RT) number. When a tenancy has been in existence for 4 years or more, a new tenancy begins and the landlord must re-register this new tenancy with the RTB.  The basic rate for registering a private rented or Approved Housing Body (AHB) tenancy is €90 per tenancy. A late fee of €180 per tenancy applies if a registration is received more than a month after the tenancy commenced.

The introduction of annual registration is being floated as important to assist the RTB in monitoring and regulating the rental sector. Under the Act 2019, landlords will be required to register a tenancy annually, rather than simply registering a new tenancy when it commences or 4-years later. The Act creates a new fee structure, €170 for bulk registration, €40 for private rented tenancies, and €20 for AHB tenancies. Yet to be enacted, the RTB intend to roll-out a new tenancy management system (RTB360) to underpin the administration of the annual registration scheme.

Information provided in a tenancy registration is used by the RTB to facilitate a variety of requirements under relevant legislation and where necessary the information provided at the point of registration can be shared between agencies such as the Revenue Commissioners, Department of Social Welfare, local authorities, and officers of the local authorities such as Inspex.

Most landlords already know the current minimum standards for all private rented accommodation are set out in the Housing (Standards for Rented Houses) Regulations 2019.  Our local authorities are responsible for checking and enforcing these minimum standards. Officers of the Housing Authority, such as Inspex, are authorised under section 18(2) of the Housing (Miscellaneous Provisions) Act 1992 to access rented properties for the purpose of rented house inspections.

Where contracts and data agreements exist, Local Authorities issue Inspex with a schedule of rented properties for inspection as registered with the RTB together with landlord and tenancy details as registered for the purpose of processing inspections of rented properties in accordance with Housing Standards.

With there being two types of business relationships – let-only/managed - between landlords and property agents, landlords should know registering precise information about a tenancy on the RTB portal is important.  The information registered is the foundation that ensures to avoid confusion and time wasted further down the line. Information should be accurate and timely if it is to be actioned efficiently.

A let-only service is for those landlords who wish to manage their rented properties day-to-day and collect rents while the letting agent finds the tenants, checks bonafides and prepares the legal documents including registering the tenancy with the RTB.   When these tenancy agreements are being registered on the RTB portal the details of the Agent should not be included as authorised to act on behalf of a landlord.

A letting agent that manages a property will perform the same services as let-only but will also take care of the general day to day running of a rented property and deal directly with the tenants. When these tenancy agreements are being registered on the RTB portal the details of the Agent should be included as authorised to act on behalf of a landlord.

Where bulk registrations are completed by an agent on behalf of several landlords, form fields relating to an agent’s details are automatically filed without user interaction.  This setting does cause problems further down the line.

Once local authority inspection activity recommences in July 2021, Inspex will be reviewing the data already received from the RTB and will be contacting landlords and agents again to arrange an inspection of rented properties as per Housing Standards.

With local authorities working to meet DHPLG targets for independent inspection of the rental stock and with Inspex working on behalf of several local authorities to deliver the targets, the more accurate information is at RTB tenancy registration, the more efficient the process is in the wider context of seeking to maintain the standard and safety of accommodation generally across the sector.

Rent Regulations, wooden blocks with the word Fair and a wooden house showing balance is needed

Rent Stabilisation Measures

Rent regulations take many forms, the most common of which are rules about how much landlords can increase rent or a cap on how much they can charge. In a time of a housing crisis, when rents are increasing rapidly, the inclination is to protect renters using rent stabilisation measures and impose restrictions on the capabilities of landlords to achieve open market rents.

While policy interference in the rental market may appear to protect tenants in the short term, over the longer term a ceiling on rents can reduce the quantity and quality of housing available as the opportunity for higher returns on investment are curtailed and landlords become disincentivised from improving or maintaining properties in good order. Policy measures to control rents can, some say, do more harm than good.

Governmental attempts to control rents is a contentious issue in many jurisdictions. Most recently in Germany the courts ruled against a state law in Berlin restricting rent increases and ruled in favour of private landlords who argued the law interfered too much in the private market. In New York, rent controls are considered to suppress supply and as and encouragement to set higher rents at the outset to ensure the desired rate of return over the lifetime of a tenancy can be achieved with the controls in place.

Historically rent control in Ireland, as in other European countries, has its roots in the legislation enacted following the end of the second world war. The legislation that limited rent increases, to protect tenants, was extended by various amendment acts until the Rent Restrictions Act 1960 brought most restrictions to an end. Any restrictions that did remain were terminated by the Supreme Court judgement in Blake v. The Attorney General [1982] I.R. 117 that determined rent restrictions constituted an “unjust attack on the property rights of certain landlords”

But history has a way of repeating itself and despite these rulings, rent control became a protagonist in the Irish Private Rented Sector (PRS) again under the Planning and Development (Housing) and Residential Tenancies Act 2016, with the introduction of the Rent Pressure Zones (RPZs). The measures aimed to “moderate the rate of rent increase” by imposing a 4% cap on permitted annual rent increases. Although these measures were described from the outset as ‘temporary’ and effective for a period of three years, their scope and longevity have since been extended to December 2021.

With the difficulties for the Residential Tenancies Board (RTB) to adequately monitor and assess all PRS market activity, there is clear disagreement as to whether the RPZ measures have been successful in achieving the desired outcome.

With opportunities to circumvent the 4% cap either by valid exemption or deliberate non-compliance, it is reported that over 40% of tenants have been subject to annual rent increases of more than the 4% cap since the rules came into effect. Recent reports suggest that several of the large-scale landlords “distort” the market by restricting supply, foregoing new letting opportunities in the short term or by offering ‘rent-free’ periods on commencement of a new lease to reduce the pro-rata annual rent paid while keeping the higher headline rent intact.

When rent restrictions prevent the achievement of true market rates, landlords can be reluctant to make adequate investment for repairs or maintenance of a property. When controls begin to negatively impact the standard and quality of rented properties available and discourage tenants from speaking out about those shortcomings, the system designed to protect has become contradictory and capricious.

Despite the lack of evidence that rent controls have ever worked wherever they have been tried, a system of accountability must be maintained for all landlords to, at a minimum, provide accommodation that meets the Housing (Standards for Rented Houses) Regulations 2019, regardless of rent paid.

With its PRS regulatory expertise and many years of working with local authorities inspecting rented dwellings to ensure compliance with prescribed standards, Inspex is well positioned to continue delivering this aspect of the PRS regulatory programme.

Two People Sitting On Couch with Book Shelves Behind in Coliving Space showing PBSA and coliving developments are two recent earmarked change-makers in housing policies

Equity Brings Conformity

There are those who say that change is the only certainty in life. Reflecting on the array of housing policies that have come and gone or which have been remastered or redefined, it seems to ring true. But creating and maintaining a set of clear rules reduces ambiguity, eliminates confusion and establishes conformity.

Soaring demand for housing and lacklustre supply of housing following the 2008 financial crash continue to prevail. For over a decade since, powerful lobby groups continue to push agendas for desired modifications in certain sectors of the housing market while successive governments and ministers have grappled with how best to cater to them.

Purpose built student accommodation (PBSA) and co-living developments are two recent earmarked change-makers in the housing market identified as a potential means of relieving pressures.

To ease cost and supply pressures in the private rented sector (PRS), by effectively removing one cohort of renters, students, the National Student Accommodation Strategy was launched by government in July 2017.

By 2018 the Irish economy had, in effect, begun to recover from the preceding decade of financial ruin and in the wake of the launch of its 2016 ‘Rebuilding Ireland’ strategy, the government released the new Design Standards for new apartment construction (2018). These standards were to provide guidance to a growing build-to-rent sector and, for the first time referenced shared accommodation, co-living, and communal living which were regarded as “new and exciting ways to meet the housing needs”.

Within twelve months the Residential Tenancies (Amendment) Act 2019 brought Student Specific Accommodation (SSA) under the remit of the RTB, a move that affirmed student accommodation as a viable investment sector and a valid means of increasing supply.

Co-living is a new concept in Ireland, heralded by some as a legitimate means to ending the dearth of supply, and quickly. By others it is regarded as a political quick fix which can on the face of things provide relief but one which is likely to bring new problems and, in the end, substandard dwellings.

The 2018 design guidelines were among the first in Europe to specifically set out planning and design parameters for co-living accommodation. For supporters of the co-living concept, it was a short-lived progression, as the Minister for Housing announced at the end of 2020 a de-facto ban on co-living developments in Ireland, save for those already approved for planning or under construction. This decision breached the commitment set out two years earlier in the 2018 guidelines acknowledging a “need for stability in policy”.

No doubt, co-living has the potential to form a legitimate part of the PRS, but it should not be mistaken for an all-encompassing speedy solution to a lack of housing supply. To some this type of development is a welcome step towards a more diverse and plentiful market. To others it is regarded as an opportunity for investors to reap higher investment returns by over-developing schemes using lower design requirements such as space, light, aspect, etc.

In large cities where rents are high and there is the need for ease of social integration, co-living as a sustainable segment of the PRS seems achievable when schemes are developed to a high standard, fulfilling the requirements of those who ultimately choose to reside there. London schemes such as The Collective and New York based Common demonstrate how these quasi-shared living arrangements can operate in practice offering residents a particular lifestyle choice through stylish private living spaces and shared-living experiences.

Until the amendment to the Residential Tenancies 2019 act, student accommodation was not subject to the rigours of the minimum standards, as were other segments of the PRS. This change put PBSA on the regulatory map and aimed to ensure that it, like traditional private rented dwellings, was safeguarded by the provisions of the Housing (Standards for Rented Houses) Regulations 2019.

The move to bring PBSA housing in line with minimum accommodation standards clearly demonstrates it is possible to mould outliers / newcomers to the housing market. The ongoing controversy with co-living development in Ireland would seem to be the legislative failure to bring such schemes in line with reasonable design guidelines and the minimum standards for rented accommodation.

Having a set of clear rules describing how things need to happen brings compliance and conformity. Standardisation reduces ambiguity and eliminates confusion.

Equity in the application of rental accommodation standards is worthwhile because no cohort of renters should be negatively impacted by virtue of tenancy type. The minimum standards should apply equally to all sectors of PRS and rented properties should be inspected on a rolling basis to independently verify those accommodation standards.

Smiling women sitting at laptop on video call prompting customer to book our virtual consultation service

Virtual Consultation Service

From the comfort of your home or office, let’s talk

Some consider Ireland’s private rented sector as well-regulated and others as overly regulated. Whichever your opinion, there are challenges that come with being a landlord, large or small, a multitude of laws to be familiar with and regulations to be followed.

Regulations and standards are important to protect investment in housing and to safeguard both landlord and tenant interests. Our local authorities are responsible for checking and enforcing standards while landlords are responsible for ensuring their rented properties meet these standards.

With so much information available, cutting through the red tape can be a challenge but the experience we’ve gained over years of working with our local authorities makes us a valuable resource at your disposal.

One of our expert team will meet you online at a specified date and time where we can discuss the findings of a Housing (Standards for Rented Houses) Regulations 2019 inspection or legislation that applies to your rented properties.

€60 – 30 Minutes

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Inspex Cancellation Policy
While this may be difficult to hear, this policy has been put in place to safeguard the service. Once you have booked an appointment with us it means we have reserved time in our schedule exclusively for you. When a session is cancelled without adequate notice, we may be unable to fill this time slot by offering it to somebody else. Because of this we do not give full refunds unless there are exceptional circumstances. Appointments can be rescheduled up to 48 hours before. But cannot be rescheduled after 48 hours.
If you must cancel your appointment, we require 48 hours’ notice. For cancellations made with more than 48 hours’ notice, the fee paid can be used for a future appointment or refunded. Refunds can take up to 10 business days to process depending on the bank. Any cancellation or reschedule made less than 48 hours from the scheduled appointment will result in a cancellation fee. The amount of the fee will be equal to 50% of the reserved services or €30 whichever is more. If you are more than 15 minutes late or do not show for your appointment, we may not be able to accommodate you. In this case, the full fee will apply.

Row of five houses, one bigger then the last with green arrow pointing up representing increasing house prices and new bill to tackle housing affordability

Changing Dynamics

According to CSO, Ireland’s population is expected to grow by up to 600,000 in the next decade. With these numbers and current supply in the housing market, for both home owners and renters, struggling to meet existing demand and affordability capabilities, direct public policy influence on supply is seemingly required.

On 20 January, the current Minister for Housing published the Affordable Housing Bill 2020 that aims to deliver affordability within the housing sector and to increase the supply of affordable homes. With much of the content dealing with amendments to the Housing (Miscellaneous Provisions) Act 2009, this new Bill includes policy changes in two key areas;

  • A new Affordable Purchase Shared Equity scheme which provides for the State to take an equity share in a property being purchased by an individual
  • Cost rental housing defined as a new form of tenure and places it on a statutory footing

Just as with other recent policy initiatives aimed at tackling housing affordability, this Bill has come under some scrutiny for its potential to miss the mark on the supply side and risk fuelling demand that could lead to house price inflation.

The ESRI has openly criticised the proposed shared equity scheme for the likely effect it may have on driving house prices ever higher. Its experts suggest such schemes generally act to stimulate demand while doing nothing to address the underlying supply issues.

In 2019, The Vienna Housing Model exhibition showcased the benefits of its long-established cost-rental model as a potential answer to Ireland’s supply and affordability issues in the rental market. Cost rental has been a key contributor to the steady and reliable supply of affordable accommodation in the Austrian capital for decades and is hailed as the “most efficient method of ensuring an adequate supply of affordable, secure and inclusive quality public housing”. A cornerstone of the Vienna Model is that it also makes public housing available to high income earners as well as low, helping to avoid the segregation of those in social housing from the higher earners typically in private accommodation.

Cost rental is not a new concept in Ireland but there have been many calls for it to be scaled up if it is to have any impact on the provision of stable affordable housing to a broad range of people on moderate incomes. Cost rental as a recognised tenure has provided for the Housing Agency to administer cost rental equity loans (CREL) backed by central government capital investment as per its Budget 2021.

With the use of public sector land and favourable government backed funding rates, three existing AHBs - Clúid Housing, Tuath Housing and Respond - have received recent approval to deliver the first round (390 units) of cost rental units.

It is proposed that cost rental tenancies, under the legislation, would be subject to the provisions of the Residential Tenancies Acts, (with some exceptions) to provide for greater security of tenure. The detail, however, around this and other regulatory conditions of the proposed scheme remain unclear at this stage.

Regulation of the standard of rented accommodation remains a critical element across all tenancy and tenure types. It is important that the regulatory framework being developed around the introduction of the new cost rental tenure reflects the need to comply with the existing minimum standards Housing (Standards for Rented Houses) Regulations 2019. These regulations outline requirements across several areas including structural condition, ventilation, fire safety, among others.

To ensure a level playing field in terms of accommodation standards with the introduction of the cost rental tenure, it is important to ensure that it encompasses existing regulatory standards, to the benefit of all stakeholders. Inspex provides independent inspection and verification services to its clients’ with impartiality when capturing, analysing, and determining the condition of rental dwellings and in particular confirming minimum accommodation standards are met under relevant housing legislation.

Text Parallel Universe represents the changes the digital world has experiences and the introduction of the GDPR

Where Are We Now?

The proliferation of the internet, the digital world or the parallel universe (as it is now becoming to be known) is self-evident when we consider the ways it is used daily for instantaneous communication and ecommerce activities.

Interestingly, in the 10 years from 2009 to 2019 the share of households in the European Union (EU) with internet access rose to a high of 90%, up from 64% at the beginning of that period. The number of individuals aged between 16 to 74 in the EU who ordered or bought goods and services over the internet was 60% in 2019, up from 46% in 2014. The global e-commerce market size was valued at USD 9.09 trillion in 2019 and expected to grow at a compound annual growth rate of 14.7% from 2020 to 2027.

As more people were “entrusting their personal data with cloud services”, the European Commission set out to replace the 1995 European Data Protection Directive and in 2012 made the decision to “strengthen online privacy rights and boost Europe’s digital economy”.

On 14 April 2016, the General Data Protection Regulation (GDPR) was formally adopted in the European Parliament and was subsequently implemented on 25 May 2018, from which time, compliance was mandatory.

The European Commission defines personal data as ‘any information that relates to an identified or identifiable living individual’. In addition, when various bits of information collected can lead to the identification of a particular person, this is also deemed to constitute personal data.

The GDPR set out to reinforce existing rights and to establish new rights for individuals, such as the right of data portability, the right not to be profiled and the right to be forgotten. It also established the role of data controller, the person/entity who decides why and how personal data will be processed, and data processor, a third party that processes personal data on behalf of a data controller.

Seven principles underline the GDPR, one of which is a new addition – accountability. In effect the data controller is responsible for being able to demonstrate GDPR compliance with all principles.

The implications of the GDPR since its implementation in 2018 have been far reaching. Although it is an EU Regulation whereby all personal data within the EU is subject to its rigours, organisations outside of the EU must also comply in so far as their processing of data relates to goods or services being offered to people based in the EU or monitoring online behaviour of users in the EU. These rules apply regardless of the country in which the company carrying out this data processing is based in.

A few justifications in the GDPR allow for companies to legally obtain, process, and store personal data. Among these justifications is processing personal data when it is necessary to perform a task in the public interest or to carry out an official function.

The 31 Local Authorities across Ireland are, under statutory provisions, tasked with the inspection and enforcement of the regulations which prescribe minimum standards for the rented accommodation in each of their catchment areas.

The Housing Acts 1966 and 2014 assign the responsibility to the Local Authorities while officers of the Local Authority, under section 18(2) of the Housing (Miscellaneous Provisions) Act 1992, are authorised to access rented properties for the purpose of rented house inspections.

The purpose of these inspections is to ensure that rented properties comply with a specific set of minimum standards as per the current Housing (Standards for Rented Houses) Regulations 2019.

Having specialised in the PRS sector since 2010 and being the only indigenous company to have developed a customised mobile application around the rented housing standards, several Local Authorities have entered into a contract with Inspex for the provision of private rented sector property inspections. In doing so, Inspex has assumed the role of the Local Authorities’ inspection team.

Under the GDPR legislation data processing agreements must be put in place between the data controllers i.e. Local Authorities/Inspex and the data processors i.e. Inspex/Local Authorities. Contractual agreements are, of course, in place between Inspex and the Local Authorities.

While Inspex itself respects the data privacy of the individuals with whom it engages in the provision of inspection services on behalf of our Local Authorities, it has also agreed to process data in line with the terms of its contracts.

Despite the onerous requirements under GDPR with which businesses both within and outside of the EU must now comply, most companies have risen to the challenges. Implementing safe and compliant ways to collect, process and store data is necessary and while it might require some extra effort, organisations must continue to monitor their operating processes to ensure compliance.

Housing coin stacks, each one bigger then the last with last one showing coronavirus and a questions mark representing the uncertainty in the housing sector during the Covid-19 pandemic

Into the Unknown

Ireland had a target of around 35,000 new homes to be delivered in 2020, aiming for supply to catch up with steadily growing demand. With the spread of Covid-19, its classification as a global pandemic and subsequent national restrictions to curb the spread, construction slowed. The pandemic had a marked impact on the housing sector with measures such as restrictions in the rental market helping tenants, even if only in the short-term.

Demand and supply of housing stock in Ireland remains a key obstacle to achieving balance in the sector, throughout the pandemic and beyond.

The stunted progress of the Irish construction sector in delivering more stock during 2020 began with the onset of government restrictions in March. Construction sites were required to cease operating by the end of March 2020 and did not recommence operations until the latter part of May 2020.

The number of completions in Q3-2020 indicates that the sector was able to make up some of the ground lost during Q2. The CSO indicates that total new dwelling completions for the third quarter of 2020 were 5,118, representing a decrease of 9.4 per cent on the same period in 2019. It does however represent an increase of 55 per cent on Q2-2020, confirming completions were dramatically affected by Covid-19 and the associated restrictions. With the worst effects demonstrated in Q2-2020 completion numbers, the sector began to catch up again in Q3.

A similar narrative unfolded globally with a slowdown in construction productivity during the initial phase of Covid-19-related restrictions in Q2-2020. In the UK construction output fell by 40 per cent in April 2020 and in the US, it fell by 30 per cent in the same period. There is evidence that as countries implemented ‘lockdown’ procedures during the year, real estate activity fell including rentals and appraisals / inspections.

Unfortunately, 2021 is already off to a shaky start with the recent announcement that construction must once again cease at least until the end of January 2021. This could hamper the industry’s attempts to make up some of the ground lost during 2020 closures and reduced capacity due to social distancing requirements on site.

With progress set to be curtailed in January with Government announcing all non-essential construction is to cease, there are some exceptions including what is described as social housing projects or “designated as essential sites by Local Authorities”.

Although the sector could not deliver as much as anticipated during 2020, it did surpass earlier pessimistic outlooks for the year. Prices held more firm than initially anticipated. The month-on-month change in the house price index shows a slight fall in the month from January to February (-0.1 per cent) and from March to April (-0.1 per cent). Although prices picked up month-on-month from May onwards, overall prices decreased by 0.4 per cent nationally in the year to October 2020.

The cost of renting also rose for another consistent year to the end of Q3-2020 marking a year-on-year rise of 1.2 per cent overall. There was a notable fall in rents in the month from March to April 2020 (down 2.1 per cent) and although they recovered considerably during the remaining months to October 2020, the rate of growth during 2020 was at a slower pace than the previous year overall. Additionally, for the first time in almost a decade, rents fell in Dublin. Rental prices reached their peak in September but began to fall back again in October (-0.8 per cent).

Covid-19 brought with it a myriad of complexities and with each wave of new infections, new restrictions including the moratorium on evictions extended from Q2 2020 offering some protection for tenants but likely to create some difficulties for landlords.

With the Government encouraging people to stay at home, limit movement and interaction with others, and to work from home where possible, people were forced to spend more time than ever before in their properties. Homeowners could take the opportunity to renovate where they had the time and money, but renters generally rely on landlords to identify and facilitate such projects.

The Housing (Standards for Rented Houses) Regulations 2019 stipulate a prescribed set of minimum standards for rented accommodation in a range of categories including structural, ventilation, and fire safety, among others. They represent not only a chance for renters to enjoy a minimum standard of safety and comfort in their rented homes, but also a statutory obligation for landlords to provide this.

Fire safety is an area of consistently high non-compliance across the regulations. A sample of over 1,000 rented dwellings inspected by Inspex on behalf of Local Authorities in 2020 shows that less than 1 per cent were compliant with Regulation 10 (Fire Safety) at the first inspection stage. However, a cumulation of follow-up inspection data shows that after the follow-up stage it is observed that almost 49 per cent of properties are compliant with fire safety requirements.

Although it is encouraging to witness safety standards improve throughout the inspection process, fire safety does remain a concern and requires careful monitoring through the Local Authority PRS inspection process.

The construction sector in Ireland proved during the tumult of 2020 its ability to adapt quickly to new health & safety guidelines and restrictions to limit and contain Covid-19 spread. Data pertaining to Regulation 10 compliance, as outlined above, shows that landlords in the rented sector are similarly capable of complying with regulatory requirements when inadequacies are highlighted.

Unlike the construction sector in 2020 that was subjected to the rapid introduction of several new industry requirements requiring quick adaptation, the Housing (Standards for Rented Houses) Regulations 2019 represent a long-term and consistent standard. This consistency gives PRS landlords the opportunity to familiarise themselves and, ultimately, to comply.

Local Authority inspections are a necessary and reliable means of determining vulnerabilities that might exist in rented accommodation. In some cases, failure to comply with the regulations can be due to any number of factors. For the most part landlords appear keen to comply and upon receiving the summary of non-compliant areas set about rectifying problems where required.

National and sectoral responses to Covid-19 globally have shown how Government measures can impact individuals and industries. The additional problems brought on by Covid-19 highlights the importance of consistent checks of properties to ensure compliance, as landlords are statutorily obliged to do.