“DOOMSDAY” predictions that plans for sweeping reforms to Jersey’s Residential Tenancy Law could trigger an exodus of landlords – potentially leaving some Islanders homeless – have been dismissed by the Housing Minister.
Deputy Sam Mézec stresssed that the draft legislation included “transitional measures” and that, if approved, it could be years before “the full brunt of the proposals” were felt by some landlords.
He made the comments during a hearing of the Environment, Housing and Infrastructure Scrutiny Panel, which is currently reviewing his proposed changes to Jersey’s legal framework for residential tenancies.
If approved by the States Assembly this summer, the new rules would stop landlords from raising rent more than once a year, limit rent increases at the rate of inflation (RPI) and cap them at 5%, as well as allowing tenants to challenge unfair rent hikes through a new Rent Tribunal, among other changes.
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.
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.
He said: “If landlords are exiting the market, those homes don’t disappear into thin air.
“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.”
Panel member Deputy David Warr highlighted the “gap between buying and selling” and questioned whether a contraction of the private rental sector could leave Jersey “with a bigger homelessness problem”.
Deputy Mézec answered: “If there’s a massive spike in properties being sold, then we’ll see lots of transactions and we’ll see lots of movement in that time.
“I personally don’t buy it, that that would be the case, especially given there are transitional measures in this law that will allow existing tenancies to continue as they are until they naturally expire and then they can be renewed onto a subsequent new initial term.
“Before the full brunt of the proposals are felt by some landlords, that’s going to take years, in some instances, for that to be the case.
“So I simply don’t believe the doomsday prediction that there’s all of a sudden going to be a massive spike in homes on the market, especially when we look at the state of the market at the moment where house prices, particularly for small homes, have come down in recent years by the biggest amounts that they have since records began.
“That’s actually quite good for those who are wanting to buy their first home.”
In a statement issued after the hearing, Deputy Jeune explained that the Panel would now be considering the review findings ahead of writing its report and recommendations.
“The Minister made clear that his aim with these amendments is to help shift the culture of renting by providing greater clarity and certainty for tenants and to tackle some of the poorer behaviour he sees in the rental market on a daily basis,” she said.
