Revealed: ‘Unreasonable’ red tape on rent caps could see 3 year delay on applications

Shelter Scotland report in March found it would be a “very big ask” for councils to introduce Rent Pressure Zones and it could take “upwards of three years” to make an application

THE demands placed on local authorities to gather precise data to facilitate a rent pressure zone (RPZ) are “unreasonable” and the responsibility should instead fall on the Scottish Government, advocates for rent controls have argued.

The Private Housing (Tenancies) (Scotland) Act 2016 gave local authorities in Scotland the power to apply to Scottish Ministers for RPZ’s in areas with surging rent rises. If introduced ministers could limit rents to one per cent above inflation, but only for those in new Private Residential tenancies which begun 1 December last year.

Aberdeen, Aberdeenshire, Highland, Edinburgh and Glasgow Councils all indicated a willingness to investigate the potential for RPZ’s, but over six months on all of the councils have told CommonSpace they are still looking at developing methodologies which would allow for the evidence to be gathered for such an application, as the Scottish Government has made clear that specific data is required and that councils are responsible for collecting this data.

This may prove beyond budget-stricken local authorities, as a report commissioned by Shelter Scotland in March found that it was a “very big ask” for councils to fund specific data collection into rent pressure zones, which may require hiring consultants to do so, especially when there was no guarantee that an RPZ would subsequently be introduced, making it a “very challenging and speculative endeavour”.

READ MORE – Exclusive: Underspent taxpayer money transferred to private housing developers by Scottish Government

The report, authored by Douglas Robertson and Gillian Young, also found that it could take “upwards of three years” to gather the necessary data, and could still be subject to a legal challenge from landlords.

"It would be disingenuous to characterise this measure as rent control as it is commonly perceived,” the report concluded. “The ability to secure a RPZ declaration is perhaps in stark contrast with the ambitions set for it by Living Rent."

Responding, Gordon Maloney from Living Rent, which led campaigning efforts to introduce limits on rent costs prior to the 2016 Act, said the demands placed on councils by the Scottish Government were “unreasonable”.

“The Scottish Government must recognise that the burdens placed on councils to introduce Rent Pressure Zones are unreasonable and work with every council that is exploring the introduction of RPZs to make that process as quick and easy as possible. If there is more information required, then the Scottish Government should work with councils to help gather it.

“Tenants will not forgive the government for being left in poverty because of red tape."

READ MORE: Calls for stronger rent controls to help tenants struggling under universal credit regime

CommonSpace asked the Scottish Government whether they recognised the feasibility and timeline suggested by the Shelter Scotland report as accurate, they said that they “recognise this is a considered process”, however they believe “everyone will realise it is crucial that robust data can be evidenced by a local authority to support their applications and enable Ministers to make informed decisions.”

A meeting between the local authorities looking to introduce RPZ’s and the Scottish Government took place on 22 April, and Highland Council reported on 30 May that the meeting had a “clear view that evidence collection will take time, and will not be straightforward.” The Council was informed that more research would be required before a decision on whether to pursue an RPZ could be taken.

A 24 April report to Glasgow City Council’s Neighbourhood committee also found that more investigation was required, stating that Scottish Government “guidance states that councils might consider contracting with a third party with statistical and research expertise, implying additional costs”. A full report to Glasgow Council on the feasibility and cost of RPZ’s is expected after the summer recess.

Asked whether the Scottish Government would consider additional support, financial or otherwise, to local authorities for data collection for RPZ’s, a spokesperson responded: “We have drawn up Rent Pressure Zone Requirements for Local Authorities to support applications and are committed to working with councils to ensure data is sufficient.”

The spokesperson added that the Scottish Government are currently members of an RPZ working group that has been established by the Association of Local Authority Chief Housing Officers, which aims to develop an RPZ standards framework that all local authorities will be able to use, and that because the legislation only came into force in December last year it would take time to establish the necessary evidence base.

READ MORE: Visiting UN representative welcomes growing recognition of housing as a right in Edinburgh

Susan Rae, Cllr in Edinburgh council and local housing spokesperson for the Scottish Greens, told CommonSpace that this wasn’t good enough, stating that the data “needs to come from the Scottish Government and we need it as soon as possible”.

“If we leave it to councils it will take a long time as we’ll be starting from scratch and there will be lots of complications between the councils. If it is centralised through the Scottish Government, who have the resources already to collect data on private rents, it can get done quickly.”

Rae said that the data could be collected quite easily by the Scottish Government with just a small legislative change requiring landlords to submit rent increase information.

“It would require just a small change to legislation so that when landlords change the rent they fill out a pro-forma so that it is recorded,” she said. “Landlords already have to be registered with the government so it would just be a small change that would be required to get that information, and that would be the infrastructure for the data information we would need.”

The most recent data on private rent costs in Scotland published last November found rent rises of 4.4 per cent across Scotland for 2016/17, the highest annual increase since 2010. The figures showed Glasgow and Lothians were the councils with the steepest rent rises of 7 per cent and 6.9 per cent respectively. Since 2010 rents in Glasgow and Edinburgh are up by one-third, far outstripping wage increases.

Rae said action in Edinburgh was urgent.

“The rent rises in Edinburgh can’t be sustained, we’re not building fast enough to bring rents down, so we need the RPZ’s soon. Three years would be far too long – we need RPZ’s yesterday.

“If there is uncertainty about the data there will be huge pressure from landlords and others not to introduce this, so we need central government to lead and we need it to be done quickly.”

Commenting on the working group established between local authorities and the Scottish Government to develop a shared methodology, Rae said: “The working group should say to the Scottish Government – keep it simple, adapt what you’ve already got.

“It’s in the Scottish Government’s interest as much as anyone’s to see RPZ applications actually happen as they passed the legislation.”

Commenting on the Shelter report, Andy Wightman MSP, Housing spokesperson for the Scottish Greens, said that it is “a timely reminder that Scotland’s current rent regulation regime will be extremely difficult to implement since the data required to build a case for an RPZ simply does not exist and will be difficult to collect.”

“The report makes clear that other European countries collect this data far more effectively and this needs to happen in Scotland too if rent regulation is to be anything more than rhetoric for Scotland’s private renters,” Wightman added.

The Shelter report looked at rent controls in France, Germany, Ireland, The Netherlands, Sweden and Denmark, and found that they all contain “far better data” on rents than Scotland, and that “possessing such data is critical”.

READ MORE: Calls for stronger rent controls and housing reform renewed as rising private rents revealed

Maloney, who published a joint report with Living Rent and the Common Weal think-tank in 2015 advocating a national system of rent controls which would tie affordability to the quality of the property, similar to the Dutch system, said that if RPZ’s were not going to work the Scottish Government should look at more ambitious proposals.

"There is a clear public consensus in favour of rent controls,” he stated. “The Scottish Government's own consultation showed that, and poll after poll has confirmed it. Tenants up and down the country are struggling desperately to make ends meet, while rents continue to spiral out of control. It has to end.

“Scotland desperately needs rent controls - proper ones, which improve quality and bring down rents now. If the Scottish Government's recently-introduced Rent Pressure Zones policy can't provide that, then it needs replaced with something that can.”

Edinburgh and Glasgow Council both responded to CommonSpace questions by stating they were looking to develop a shared methodology across councils for RPZ’s, while Aberdeen Council said they had not yet assessed timescales for RPZ’s. Aberdeenshire Council said they were also working with other local authorities and that “it would take time” to assess the need for an RPZ.

Cllr Kate Campbell, Housing and Economy Convener for Edinburgh Council, told CommonSpace: “We are already working with the Scottish Government and other local authorities to make sure we have an agreed methodology for collecting data. It is important that we are able to clearly demonstrate the need for rent pressure zones. And we’ve already commissioned research to get a better understanding of rent levels as they are just now.

“We recognise the impact that high rents are having across the city and we know that we have to act.”

Picture courtesy of Martin Fisch