Ireland’s Housing Crisis Controversy Continues: 2025 So Far

By Current Affairs Editor Adrian Quinn

Taoiseach, Micheál Martin, has received heavy criticism as he recently hinted at changes to, and the possible removal of, Rent Pressure Zones (RPZs) at the end of this year.  RPZs were introduced at the end of 2016 and were scheduled to last until December 2024. They were extended until 31st December 2025 in May last year by the then acting government. 

RPZs were first set up in order to moderate rapidly rising rents in Cork and Dublin. These designated areas now cover approximately 75 percent of the country’s private rental properties. They cap annual rent increases at two percent, or at the rate of inflation as per the Harmonized Index of Consumer Prices - whichever figure is lower.

The effectiveness of RPZs have been called into question. The International Money Fund (IMF) pointed out that there appears to have emerged a two tier rental system in Ireland due to RPZs. Sitting tenants have generally benefited from lower rents in compliance with RPZs, whereas new tenants are often faced with higher rents. 

When discussing the possible changes to RPZs, the Taoiseach said that this suggested shake up comes as the government attempts to establish a system which “protects renters but also enables people to have a clear, stable environment in which to invest”.

The most prominent alternative to have been suggested is the “reference rent” system, as outlined in the Housing Commission’s report in May of last year. This expert run body was set up in 2021 by the Department of Housing, Local Government and Heritage by Minister Darragh O’Brien. 

In the 2024 report commissioned by the government, it was said that this system would base rent prices on various conditions, such as the location and the characteristics of the house. 

The Chair of the Housing Commission, John O’Connor, speaking to the Independent, recently advised that RPZs would be required for a further two years before any changes were to be made. The Commission stressed that any changes should be made only on evidence based reviews on the impact of the market.  

Mary Conway, Chairperson of the Irish Property Owners Association (IPOA), speaking on Morning Ireland, welcomed the possibility of a change to the RPZs, stating that “they haven’t worked” and have instead “driven landlords out of the system” and “given tenants less choice”. 

The Residential Tenancy Board (RTB) recently published figures indicating that the number of landlords in the market had increased by 5.7 percent in Q3 2024. 

Conway called into question the accuracy of these figures, stating that estate agents and members of the IPOA have reported landlords are leaving the market. 

The Taoiseach’s remarks regarding changes to the RPZs have come shortly after recent figures showed that the government had failed to reach their housing targets for 2024. In the closing months of last year, former Taoiseach, and current Táinaiste, Simon Harris had assured the public that there would be close to 40,000 houses built. 

Figures published by the Central Statistics Office (CSO) recorded that 30,330 dwellings were completed in 2024, a decrease of 6.7 percent from the previous year.  The largest drop came in apartment completions, which fell by 24 percent.

Speaking with Claire Byrne on RTÉ Radio One, the Táinaiste laid the blame for this shortfall on Minister O’Brien.

The current government has come under fire from opposition parties for their failure to provide the 40,000 homes that were promised. Sinn Féin’s National Spokesman on Health, TD David Cullinane, accused the government of misleading the public in order to win votes in last November’s election. Speaking to the Dáil, Cullinane claimed that the Central Bank, the CSO and the Economic and Social Research Institute (ESRI) had all provided figures before the election suggesting that the government would not achieve its targets.   

The new Programme for Government has laid out plans to build 300,000 homes from 2025 until 2030. This is in line with the ESRI’s figures which have stated that 60,000 homes need to be built annually in order to meet demand. 

Speaking on Morning AM, housing policy expert, Dr. Lorcan Sirr of TU Dublin, cited Davy stockbrokers' claims that 93,000 homes will need to be built annually by 2031 in order to meet rising demand. 

In order to reach the ESRI’s targets, the Taoiseach has pointed out that the state would need “€20 billion of development funding for housing” annually. Presently, the government is spending approximately €6 billion. 

The Taoiseach has confirmed that in order to make up the €14 billion shortage, the government is considering providing tax breaks to private developers in order to incentivise investment.  

Contrary to the Taoiseach’s statements, Minister for Finance, Paschal Donohoe, has denied the possibility of reintroducing reliefs. Speaking from Brussels, Donohoe said that “We should not bring in and reintroduce the reliefs that proved so costly and did such harm a number of years ago.”

Leader of the Labour Party, Ivana Bacik, speaking on Morning Ireland, pointed out that in a report conducted by the ESRI, that providing developers with such tax breaks only leads to the transfer of tax revenues from the state to developers without much change in supply. 

Despite the controversy surrounding RPZs and housing target figures, the government has yet to announce a clear solution to these plans.

In the meantime, according to Focus Ireland’s most recent figures, homeless numbers continue to rise, currently sitting at approximately 15,000 - of which almost 5,000 are children.