The Government is facing a major policy crossroads as it prepares to make a decision on whether to retain, amend, or scrap rent caps, a measure that has divided opinion across the housing sector.
Introduced as a temporary measure in 2016, Rent Pressure Zones (RPZs) were intended to curb spiralling rent costs. Over time, the caps were tightened—most notably in 2021, when the maximum annual rent increase was reduced from 4% to 2%, making them among the strictest rent controls globally.
With these caps set to expire at the end of the year, Minister for Housing James Browne recently received a report from the Housing Agency outlining possible policy options. The report warned of significant problems with the current 2% ceiling and explored alternatives, including a potential increase in the cap or allowing landlords to set market rents when tenancies change—an approach supported by the OECD. However, critics caution such a move could lead to increased evictions.
“There’s a growing recognition that the current system, while protecting tenants, may also be contributing to the slowdown in housing supply,” said one senior government source. Last year saw a 24% drop in apartment construction, with developers blaming tight rent controls and rising interest rates.
As the housing crisis deepens, the government is also under pressure over its construction targets. Promises made during last year’s general election to deliver 40,000 homes in 2024 were not met, with just 30,000 completed. For 2025, the target is 41,000 homes, though the Economic and Social Research Institute (ESRI) predicts the figure will be closer to 34,000—far below the 50,000–60,000 annual builds experts say are required to meet demand.
Minister Browne acknowledged the shortfall this week, calling the current targets “extremely challenging” and emphasising the need to engage the private sector. “If we want completions to increase, we have to activate private investment,” he said, indicating why the government is now re-evaluating the rent cap regime.
Complicating the picture further is Ireland’s limited capacity to connect new homes to water infrastructure. Irish Water/Uisce Éireann warned that it can handle just 35,000 new connections annually for the next five years—well short of the demand.
CEO Niall Gleeson told an Oireachtas committee that €10.3 billion has been earmarked for capital works between 2025 and 2029 but said an additional €2 billion is required to support the Government’s goal of delivering 300,000 new homes. He also called for legislative reform to speed up planning approvals, some of which are taking over a decade.
With high-stakes decisions looming and multiple constraints in play, the Government continues to insist that resolving the housing crisis remains its top priority—though many critics remain unconvinced that real progress is on the horizon.
