Fears that plans to limit rent increases at the rate of inflation – and cap them at 5% – could negatively impact the island’s rental market were downplayed by the Housing Minister during a scrutiny hearing today, in which he described the proposal as “about as moderate as you can possibly get”.
Deputy Sam Mézec responded to concerns stemming from his plans for sweeping reforms to Jersey’s Residential Tenancy Law during a hearing of the Environment, Housing and Infrastructure Scrutiny Panel this morning.
The Panel launched a review of the draft legislation in March and intends to present a report of its findings, including key recommendations for Government, ahead of debate by the States Assembly.
If landlords are exiting the market, those homes don’t disappear into thin air
Housing Minister Sam Mézec
Panel chair Deputy Hilary Jeune referenced “considerable evidence” from members of the public, local organisations and key stakeholders “expressing concern that the proposed rent cap could negatively affect the private rental market, potentially leading to reduction in rental housing supply”.
Deputy Mézec responded: “What’s proposed is about as moderate as you can possibly get, in the form of any kind of interference in how rents can go up during residential tenancies.”
He continued: “A point that doesn’t seem to have been understood by some who have commented on it, is that these are passive proposals.
“They’re not like what exists in other jurisdictions, where if a landlord wants to raise their rent, they have to go and ask permission from the Government to do so.
“This is to be, in the first instance, dealt with by landlords and tenants as they see fit – but with a safeguard that if rents are to increase above those caps, then at that point the tenant has a right to appeal it and that appeal is based on two specific exemptions to that cap.”
Deputy Mézec also addressed concerns that the new law, if approved, could result in landlords exiting the market and cause a contraction the private rental sector.
“If landlords are exiting the market, those homes don’t disappear into thin air,” he said.
“They can be bought by other landlords who are perfectly happy to deal with these proposals, or they can be bought by people who are aspiring to own their own property that they live in.
“Both of those are good outcomes.”