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“When will Ireland admit that rent controls are a catastrophe?”

A couple of months ago John McGuirk asked that question:

Landlords have fled the market. They are selling up at an unprecedented rate, or finding other uses for their accommodation. There has been an explosion, meanwhile, in institutional landlords: Big companies and pension funds buying up properties, because unlike the small landlord, they have their own legal offices and in house accountants and the funds to constantly refurbish properties to bring them up to regulatory standard. Ireland’s left wing approach to rental regulation has been – again, predictably – an absolute bonanza for this biggest capitalist institutions.

Government must take the blame for this. It is Government, after all, which passed all these obscene and stupid laws. But the opposition – mainly the noisy left – are the ones who campaigned on it, and for it, and who want to go ever further down the road to disaster. As of today, there are about 700 homes left available for rent in the entire country. About 22 in every single county.

Emphasis added. 700? In a nation of five million people? Could that really be true? It seems so. This video from Sky News says the same.

I hate to say it, but the answer to Mr Guirk’s question is that the misery of would-be renters in Ireland will probably go on for decades, like it has in Stockholm. Rent control is the Japanese knotweed of bad policy: the horrendous difficulty of removing it once it is established becomes an incentive for people to close their eyes to the damage it is doing. The failure of rent controls in Ireland was already several years old when I wrote a post in 2018 called “And why might that be?” It was about how one of the Guardian‘s better journalists could not understand why landlords in Dublin had vacated the long term rental market en masse in favour of Airbnb.

One might think that this clear demonstration of how rent controls work in practice would at least deter us from repeating the folly on the other side of the Irish Sea… I jest, of course. Seen on Guido Fawkes the other day: “New Scottish rent controls crush hopes for 11,000 affordable homes”.

14 comments to “When will Ireland admit that rent controls are a catastrophe?”

  • bobby b

    “Government must take the blame for this.”

    In a statist’s view, government gets the CREDIT for this. Different system of metrics.

  • exasperated

    I think we look at these seemingly crazy policies (rent controls and climate-caused energy crisis) from the wrong end of the telescope. What we think of as a bug is actually the feature.

    The whole point of crashing the rental or energy sectors is to create enough popular uproar for the Govt to step in and take them over – even if Govt interference (and uproar) is what caused the crash in the first place.

    The same with housing. Policing. Education. Healthcare.

    GOAL: how to achieve State control of X.

    1. Create a dysfunctional X.
    2. Crash X with stupid policies.
    3. Create media uproar that “Only Govt can save us from the dysfunctional X!”
    4. Get control of X.
    5. Move on to next X.

  • Roué le Jour

    The government wants to bring the same high standard of quality and professionalism to the housing rental market as it has to healthcare and education.

  • Steven R

    (With apologies to Homer Simpson)

    “Here’s to government: the cause of, and solution to, all of life’s problems!”

  • Earnest Canuck

    Witness Western governments of the Caring/ Compassionate stripe everywhere, responding to citizens’ alarm about inflation by… sending millions of cheques to millions of people. To help them *cope*. I mean! The dullest kid with grade 6 math understands that money cannot cure inflation, so what do these supposed adults think they’re doing? How much of this is self-importance, how much is simple delusion, how much malice?

  • Steven R

    It’s simply bribing us with our own money. No more, no less.

  • Sam Duncan

    700? In a nation of five million people? Could that really be true?

    I can believe it. Much the same thing happened here in the 1920s. Gordon Brown used to wonder publicly why, uniquely in Europe, the majority of British houses were owner-occupied. The answer’s simple: the Rent Act of 1920.

    The current Scottish situation is especially depressing, since the 1920 Act hit Glasgow particuarly hard. It used to be said that everyone here lived in a tenement flat, and although other styles of building have gained favour since WWII, it’s still not far from the truth. There are “flats” in Hyndland and Pollokshields which are really maisonettes, the upper floor being servants’ quarters. And they were all, without exception, built for rent. In recent years the Housing Associations have bought up a lot of the smaller flats, but for decades these typically Glaswegian blocks were almost entirely owner-occupied. (Many of them were built as speculative developments by the banks, who simply sold their middle-class tenants mortgages.)

    Of course, the current Scottish political class isn’t exactly noted for its knowledge of history beyond a viewing of Braveheart.

  • george m weinberg

    When will Ireland admit that rent controls are a catastrophe?
    Pretty much the same time the rest of the world does. Even most hard-left economists will agree that rent control is a boneheaded policy even in theory, and experience shows it is an unmitigated disaster everywhere it is applied.
    The only people that think rent control is a good idea are economic morons who think the government can simply decree “there will be cheap housing” and it will magically appear. That is to say, the majority in most countries.

  • Steven R

    I don’t know george, I think the old lady in Manhattan only paying 600/month for a 1500 sqft apartment because she’s been living in it since 1947 probably thinks rent control is a swell idea.

  • Paul Marks

    The article could have done with some specific dates – telling us when specific Irish Acts were passed, but I get the drift of the article.

    One of the most basic laws of economics is that prices, and both rents and wages are prices, must be set freely – by supply and demand.

    Yet this is rejected – by people such as Joseph Biden who, years before he went senile, was attacking Milton Friedman and other relatively free market economists.

    Italy, like New York City, never really got rid of rent control after World War II – which is why there are so few houses or apartments for rent in Italy, which means people cannot marry and have children.

    When a price is pushed below the market level you get a shortage – hence rent controls lead, over time, to a worse and worse shortage of houses and flats for rent.

    When a price is pushed above the market level you get a surplus – so when governments pass minimum wage laws above market wages, and/or support union “Collective Bargaining” (what W.H. Hutt called “The Strike Threat System”) you got Structural Unemployment emerging over time.

    But all this, all this basic economics, is totally denied in the modern world.

    As for “Security of Tenure” – this used to be called “Spanish Practices” it was one of the restrictions that Spain and its colonies in Latin America were famous for, it is a violation of Freedom of Contract, and it leads to stagnation and decay.

    Even President Theodore “Teddy” Roosevelt denounced “Spanish land law” in Latin America – and he was no free market person, he just had some basic common sense.

    If it is not clear who-owns-what (to put it in crude language, if you cannot legally get the tenants out) then talking of economic and social progress is pointless, you are going to get stagnation and then decline.

    Even today it is only clear who-own-what in a handful of Latin American countries – such as Uruguay (and even then, that is about farmland – not urban apartments).

  • lucklucky

    “When will Ireland admit that rent controls are a catastrophe?”

    When people admit that being or not a catastrophe is not what matters most of the time in political-journalist world.

  • llamas

    @ Steven R – except that the little old lady likely actually lives in Palm Beach, and the actual rent of the apartment is likely several times the ‘controlled’ rent, the difference being divided between several players, one of which may be the landlord. To paraphrase Richard Feynmann (again), ‘the rental market will not be fooled’. When the market rent for a 1500 sq ft apartment in a tony NY neighborhood is $6000 pm, nobody is going to leave that $4800 pm on the table, and stories of little old ladies who live, Helene Hanff-like, in rent-controlled apartments for 50 years, are mostly bunk. The net effect of rent control, of course, is to drive rents up, including rents for places that are notionally rent-controlled.



  • nobody is going to leave that $4800 pm on the table (llamas, October 16, 2022 at 11:54 am)

    Situations and people vary. I know someone who lives in a rent-controlled apartment in central London, fairly prime location. She pays very little rent – at the cost of refusing all improvements offered by the landlord, which is why she lived without hot water for a long time and has always done without heating beyond a plug-in electric. (The apartment has some other features that many would think a high price to pay even for so small a rent – I’ve been there at times where you could almost imagine a slight literalness in the old joke about rent control being the next best way to destroy a city after bombing.)

    I do not know that her landlord is waiting for her to die (and he has never tried to expedite that event, though at times the way she’s chosen to do without in that apartment could be alleged to show that she is 🙂 ). But I assume his commercial plans to draw profit from that apartment in his building depend entirely on his recovering an effective right of ownership after her departure. Meanwhile, AFAICS he does indeed “leave that money on the table”.

  • llamas

    @ Niall Ferguson – to be sure, there are exceptions. I likewise know a man who has lived in a rent-controlled situation in London for the best part of 40 years, and his place is very nice, if a touch – unconventional. But he, and your lady friend, stay in those situations because they want to. And I dare to suggest that the housing officers in London may have a slightly different ethical compass than those in New York.

    By contrast, there are lots and lots of people in New York who have rent-controlled or rent-stabilized apartments who are generally older, living in generally-older properties – the rent control laws favor older buildings, and the passage of time has made those benefiting from them generally-older. Throw in the infamous corruption that’s endemic in the system and the often-willing collusion of tenants, landlords and others, and you’ll find many properties are actually operating as I described.