The private rented sector

Until the 1990s the policy preferences operating to support home ownership in Ireland led to private rented accommodation declining in importance as a housing sector, comprising less than one tenth of all housing provision at the beginning of this decade. Since then, a combination of demographic change and economic prosperity, along with a shortage of housing for ownership, resulted in an upward demand for private rental accommodation. The traditional profile of the sector as a tenure for long-term poor households, students and others requiring temporary accommodation was augmented in the last decade by relatively well-off households seeking temporary accommodation on the way to home-owning, and the expansion of this sector to meet this demand was also fuelled by generous tax incentives. This was not the only pressure on the limited rented stock. In addition, cutbacks in local authority housing provision forced local councils to meet their housing obligations to low-income families through the private rental sector. In the mid-1990s, policy initiatives arising from a series of housing reviews designed to assist home ownership (Bacon and Associates, 1998, 1999, 2000) intentionally discouraged investors from the market and further reduced the potential stock of rented accommodation. Thus, although the private rented sector in Ireland is often categorised as a marginal tenure, trends in the sector in the last decade have seen it become the focus of policy attention where three main sets of interests with varying degrees of power interact to secure their interests. The key concern of government in relation to this sector is enabling the free market to operate with minimal regulation while granting tenants modest protection from exploitation by unscrupulous landlords. For landlords, minimal regulation of their activities in conditions conducive to maximum investment return is their preferred policy environment and they have campaigned to secure this condition. For tenants, of critical importance is the availability of quality and affordable accommodation with security of tenure. These competing perspectives came to the fore in the closing decade of the twentieth century, and despite the publication of a comprehensive report on the sector by a government-sponsored Commission in 2000, little has changed for any of these groups (Commission on the Private Rented Residential Sector, 2000). This chapter aims to explore the many aspects of the private rented tenure in order to understand the dynamics of the sector. It begins by presenting an overview of the private rented residential sector over time. It examines the size of this sector in relation to other tenures and assesses the role the sector is called on to play in the housing system. This is followed by a discussion of the social composition of landlords and tenants, and by a review of the main investment incentives open to landlords. A further section analyses the key elements of the sector that give rise to polarised debates - security of tenure, rent-setting and landlord-tenant relationships. Before concluding, some attention is given to the report of the Commission on the private rented sector and the chapter closes with a general review of the sector as a whole.