Rachael Walsh, Trinity College Dublin
An unexpected upshot of the COVID-19 crisis has been a positive impact on Ireland’s housing and homelessness crisis. There has been an overall reduction in homelessness, with for example numbers in Dublin at their lowest since 2013. Some of these gains were accidental. For example, the tourism shutdown resulted in a surge in new properties available for rent in Central Dublin. However, the crisis also prompted legislative intervention to protect tenants.
One such intervention was the introduction of a freeze on rent increases for three months beginning on 27th March 2020 (the date of commencement of the Emergency Measures in the Public Interest (COVID-19) Act 2020). That freeze applies to all forms of rental accommodation, including for example student accommodation and accommodation shared with a landlord. Valid notices for rent increases that were due to take effect in this period do not take effect. Increases can be applied upon expiry of the freeze but not in respect of time captured by the freeze.
The Housing Minister has indicated that an extension beyond the initial three-month period is likely. However, the criteria for such an extension may not be easy to satisfy as the phased re-opening of the country continues. The Minister has the power to request that the Government make such an extension upon consultation with the Minister for Health and the Minister for Public Expenditure and Reform, provided that an extension is in the public interest having regard to: (i) the threat to public health presented by COVID-19; (ii) the highly contagious nature of that disease, and (iii) the need to restrict the movement of persons in order to prevent the spread of the disease among the population. Notably absent from these criteria is any mention of hardship flowing from the COVID-19 crisis, for example unaffordability of rent due to unemployment. As movement restrictions are eased, it may become less easy to justify an extension of the rent freeze to prevent forced movement flowing from evictions due to non-payment of rent.
The COVID-19 freeze on rent increases is striking because the Government and the leading opposition party in the Oireachtas prior to the 2020 General Election (Fianna Fáil) consistently argued that freezing rents would be an unconstitutional response to the housing and homelessness crisis, indicating that they had legal advice to that effect.
Doubts about the constitutionality of rent freezes can be traced to two decisions of the Supreme Court: Blake v AG (1982) and Re Article 26 and the Housing (Private Rented Dwellings) Bill 1981 (1983).
Blake concerned the constitutionality of Parts II and IV of the Rent Restrictions Act 1960 as amended by the Rent Restrictions (Amendment) Act 1967 and the Landlord and Tenant (Amendment) Act 1971. The Supreme Court held that this rent control scheme was unconstitutional. Relevant factors included: the mandatory nature of the legislation; its unlimited duration; its impact on contractual arrangements; the lack of provision for review; the absence of compensation, and the potentially onerous repair obligations for landlords. Critically, the Supreme Court stated that the application of the Act was not connected to the relative needs and means of landlords and tenants, nor to ‘any established social necessity’.
Following Blake, the legislature introduced a new Bill, the Housing (Private Rented Dwellings) Bill, 1981. It provided that rent for controlled dwellings should be either agreed or fixed by the District Court on essentially a market value basis. The move to market rent was to be phased in over a four year period. The Supreme Court held that it was unconstitutional because it deferred payment of market value rent. The Court did acknowledge that its decision could cause some tenants hardship, but it regarded such hardship as appropriately remedied by the State rather than private landlords.
What do these decisions suggest in respect of the constitutionality of the COVID-19 rent freeze and the prospects for post-crisis housing reform aimed at retaining gains made during the crisis? Part of the reasoning of the Court in both Blake and Private Rented Dwellings was that discrete groups cannot be constitutionally required to bear burdens in the public interest above and beyond those imposed through general taxation. Apart from one notable decision, that logic has not generally been applied by the Supreme Court as a basis for striking down legislation in subsequent decisions. Therefore, there is every possibility that a procedurally robust rent control scheme could pass constitutional muster. Indeed, rent control is already provided for under the Residential Tenancies Act 2004 (as amended) through restrictions on rent increases in designated rent pressure zones.
However, neither Blake nor Private Rented Dwellings have been overruled. Nonetheless, if the Supreme Court was inclined to apply those decisions as authorities for a strong anti-redistribution position rooted in the Constitution’s property rights guarantees, the COVID-19 rent freeze can be readily distinguished from the previously invalidated rent control schemes.
First, the freeze involves a deferral of rent increases. It does not, like the scheme in Blake, suppress rents. Rent increases that would otherwise have been imposed during the freeze will be triggered once the freeze is terminated. Rent remains payable for the duration of the freeze, although without any increases.
Second, the temporary nature of the current rent freeze is crucial. The open-ended nature of the restrictions imposed on landlords was a key factor in Blake. The deferral of payment of rent increases involved in the current restrictions is also much shorter than the four-year phasing-in of market rents that troubled the Supreme Court in Private Rented Dwellings.
Third, there is a clear and compelling social need for the current rent freeze, whereas the courts struggled to identify such a rationale for the earlier schemes.
Fourth, the freeze applies to all rented properties, which reduces the selectivity of its application and accordingly the narrowness of its targeting - all landlords suffer the same burdens. While there is clearly a ‘singling out’ of a social group in the public interest, that group is large and apparently well-positioned to defend its interests politically. This is significant as the Supreme Court in a 2005 decision suggested that the property rights of vulnerable, politically weak groups should receive particular legal protection.
Overall, therefore, the COVID-19 rent freeze is constitutionally sound. It remains to be seen whether the positive impact of that rent freeze on homelessness will generate greater willingness on the part of Fine Gael and Fianna Fáil (who look set to be the two major parties in the next government) to introduce further rent control measures.
The end of the current freeze will see some tenants facing immediate rent increases in circumstances where unemployment may still be high. The Programme for Government identifies this challenge, undertaking to examine the need for further measures to assist tenants with the impact of the COVID-19 crisis in light of research from the ESRI. Housing campaigners have already called for up to a two-year extension to the current freeze.
There is scope within the existing constitutional framework to introduce additional measures to retain and build on the inroads made into the housing and homelessness crisis during the COVID-19 crisis. The proposed Programme for Government suggests that a lasting effect of the crisis may be more ambitious legislative reform that tests the limits of that scope.
Rachael Walsh is an assistant professor in Trinity College Dublin and a member of the COVID-19 Law and Human Rights Observatory
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