The Government has been accused of forcing people into financial hardship by failing to intervene adequately in the rental market.
"Thanks to Fine Gael and the last government, supported by Fianna Fáil, the average renter pays €4,000 more," Sinn Fein TD Eoin Ó Broin told the Dáil.
He said rising rents and falling housing supply is "the Fine Gael way".
The Sinn Féin housing spokesperson called for an urgent, three-year ban on rent increases.
.@EOBroin asks if the Government will introduce a ban on rent increases for 3 years. @LeoVaradkar says rents are frozen "in real terms" at the moment, as they can only rise by rate of inflation. He adds "one person’s rent is another person’s income" | More https://t.co/fdy6FXtnB6 pic.twitter.com/H2ppmpbItI— RTÉ News (@rtenews) September 21, 2021
The Tánaiste said that linking rents to inflation is a rent freeze in real terms and rejected Sinn Féin's call for a three-year rent freeze.
Leo Varadkar said when interest rates rise, the freezing of rents would lead to some people not being able to pay a mortgage.
Mr Varadkar said people would not see big rent increases anymore.
Also speaking on RTÉ's Drivetime, Deputy Ó Broin said a stable system that allows landlords to make a reasonable return on the service they provide and gives tenants security and affordability is needed.
Rent caps had virtually no impact in the first two years, he said, adding that in 2017 and 2018, rental inflation - particularly in rent pressure zones - was in double digits.
Speaking on the same programme, Margaret McCormick from the Irish Property Owners Association said a three-year ban on rent increases would cause more people to leave the market again.
Ms McCormick said the costs of providing accommodation are going up and if that cost cannot be passed on, it becomes unviable and unsustainable.
"So somebody else moves out of the market," she said.
She said incentives, such as fair and favourable tax treatment, are needed for investors to invest in the sector.
Opposition TDs call for rent freeze
Meanwhile, Social Democrats TD Cian O'Callaghan said the Government plan linking rent to inflation has proven to be "hugely ineffective" and a three-year rent freeze is now urgently required.
He said it was "the worst possible time" to link rent with inflation, adding rents in Ireland are now among the highest in Europe.
Labour TD Ivana Bacik also called for an immediate rent freeze for three years and said renters are subject to a lot of uncertainty, even in rent pressure zones, due to issues like inflation.
Earlier, the Cabinet has backed a plan from Minister for Justice Heather Humphreys to institute a review of the law regarding how certain property rights - including rights of way - are validated and registered.
The minister will now seek to speedily enact an amending bill which removes an upcoming registration deadline of 30 November.
Under the scheme, contained in legislation dating back to 2011, the registration system was supposed to allow neighbouring landowners, who agreed on rights of way, to avoid requiring a court order.
However, there is concern that some of the provisions of the legislation lack clarity regarding the time required to make a claim based on long-use, as well as the stipulation that applicants must give up all other potential claims.
He also welcomed the news that the US is opening up travel for vaccinated people from Ireland and the rest of Europe describing it as "really positive."
Mr Varadkar said it will be good for relatives to see each other and also a chance to boost business links as so much business happens across the Atlantic.
When asked about Katherine Zappone declining an invitation to appear before an Oireachtas committee, he said that she is a private citizen and it is her decision.
Separately, People Before Profit TD Brid Smith said it would be "totally hypocritical" for the Taoiseach not to support her bill seeking a moratorium on new data centres, given he is about to chair a UN Security Council meeting on Climate Action.
She said there could still be power outages this winter, despite reassurances from Minister Eamon Ryan last week.
Additional reporting Paul Cunningham, Karen Creed