Professor P.J. Drudy:

At the moment there are over 100,000, so it would probably be 400,000 but they would have to be managed properly. I do not know how that would be linked to cost rental because social housing normally has differential rents which would probably be very low, while in the cost rental situation, I am thinking of a viable repayment of the mortgage. For a garda or teacher it would not be a rent of perhaps €1,500 but it might be a rent of €1,000. It would be secure, in line with inflationary tendencies and of a good standard. There are slightly different categories but I still argue that the State could provide cost rental. No doubt people in the private sector will say that they will do it and they are coming out of the woodwork now to propose social housing. I will not name the people but there is one particular organisation now proposing to get in on social housing. There is also a multinational firm - a vulture fund of some sort - interested in social housing. They have all become interested overnight because they see profit in it, but it is not appropriate.

The Deputy mentioned 75,000 private rented sector houses being used for social housing. My answer to that is that it is not fit for purpose. We know that the private rented sector does not work when the rents are being put up in a dramatic way and the standards are poor. Something like 100% of private rented homes in County Louth do not conform to normal standards. I hope I am right in that - I think it is County Louth. The average is something like 48%. I mention 50% in my paper but it is actually 48%. That is scandalous. How could the private rented sector be appropriate for providing housing for either poor people or not so poor people? It does not add up.

I approve of housing for mixed income groups. I approve of integration of housing; the segregation has been wrong. We built large estates in all sorts of places around Dublin, Galway, Limerick and Cork. It is a pity and we need to integrate more and the State has to play a role in ensuring that it happens, if at all possible. It is not easy. Unfortunately, we are a segregated society. Sadly, people in private estates do not like the idea of social housing and that is wrong. We need to move towards a model like that in Germany, France or the other European countries where there is much more integration, where a Dáil Deputy would live next door to an unemployed person, probably paying a different rent. They are next door to each other, they know each other and they get on very well together.

Does the committee want me to deal with rent regulation? I have set out the arguments in the summary, which is better than the other paper because it was a bit too long. It is very important to see the distinction between rent regulation and rent control.

It is essential to do so. Even this morning I heard the term "rent control" used again on RTE. I heard Peter McVerry, who should know better, using the term last night on the Claire Byrne show. Rent control was something introduced during the First World War, I think all over the world, but certainly in Ireland. It lasted up to 1980. Rents were controlled; they were frozen at a certain level, often at a totally unreasonable level. Rent for a house that was frozen at £2 in 1914 was still £2 in 1970 or 1980. That was control and it was totally unreasonable. It was found to be unconstitutional in 1981.

Rent control is now non-existent. I plead with the members of the committee not to use the term "rent control" because it does not exist in Ireland, Europe or anywhere else. Rather what does exist is rent regulation where rents are changed in line with inflation or by some percentage, perhaps 2%, 3% or 5%, and in line with improvements to the premises. I believe that is entirely reasonable and that is the situation in a range of European countries. Germany is an obvious one; France, Belgium and Sweden are others. A whole range of European countries do this.

Ms McCormack and Mr. Faughnan from the Irish Property Owners Association probably regularly send members of the committee e-mails - they send them to me - advising that the world is about to fall in, there will be mass unemployment and a mass exit of landlords if we introduce rent regulation. They believe the world would end and yet it has not ended in Europe. Throughout Europe rent regulation is the norm. At the same time those countries insist on having good standards and tenants have security of tenure for long periods of time - indefinite in many cases. People are delighted with this situation.

The basic argument for rent regulation is because the so-called market is imperfect. It is a monopolistic-type market with a relatively small number of landlords and a large number of tenants. If that is the situation in producing any good or providing any service, the producer will charge what he or she wants. That is life, it is the logic of the situation and that is what landlords do. There is no way around it and we must accept it is monopolistic. It is not a perfect market as is sometimes argued and as was argued, incorrectly in my view, in a DKM report in 2014. Members may have seen that report which the landlords regularly use.

I do not want to be seen as anti-landlord. I respect that there are many good landlords, decent people who look after their properties and do not charge extortionate rents. However, many landlords do the opposite, including the vulture funds which are now in here in force and are charging outrageous rents. They are taking over a lot of developments and that is something that needs the committee's attention.

Apart from the monopolistic situation, high rents are bad for the economy because a considerable amount of money is spent on rent which could be spent on other things, such as job creation activities. If people have no money to spend on food or whatever, the shops are suffering, so it is bad news.

Is it justifiable that rents are out of line with inflation? I do not think it is. I do not think it is justifiable for either house prices or rents to go in the way I showed in the diagram. It makes no sense to me. Of all things, why should housing, which is such a fundamental need, out of the blue be different from any other product or service? It makes no sense and it is wrong and unethical. The rents being charged act as a deterrent to skilled workers coming to live in Dublin and yet people have no option.

Have I answered the Deputy's questions?

The Deputy talked about how to deal with house purchase in a better way, which is an important point. It is important that we do not give tax incentives, give grants to first-time buyers or give help to buy because all those three things do is increase house prices as they increase demand. Some committee members will remember that the first-time buyer's grant was written into the price of housing, particularly those members who are middle aged - I think I am the oldest in the room but I am still here. It is written into the price - that is the problem. We should not go in that direction but, rather, we should try to reduce house prices.

By the way, I should say I believe the Central Bank measure is correct because it is dampening down the demand for housing. I bought a house in Galway many years ago when I could not afford to buy it, and I had to get a 25% deposit. Of course, I got it illegitimately by borrowing it from a bank and I got the rest of the money from a building society. I eventually went to England and spent many years there, and I actually could not pay the mortgage. I was one of these sub-prime mortgage people and my unfortunate sister bailed me out and paid the mortgage for me. It was a misguided purchase. Nonetheless, I am making the point that, at the time, the deposit was 25% whereas people are now giving out hell about 20%. The Central Bank measure is designed to put manners on the banks and to put manners on people who make seriously wrong decisions. That is very important.

On house prices, the Government takes a big take. I am sure Mr. Parlon will have already told the committee this in detail, and he will have been giving out about the Government. I know that those in Leinster House need the money to keep the show on the road but, certainly, a big take is taken by the Government in VAT, levies and so on, which is an issue to be looked at.

The other issue to be looked at is land. Land prices feed into high house prices, which is an issue we have failed to deal with over a very long time. Some committee members will remember the famous Kenny report in 1973 where Kenny proposed that land should not escalate but that the State should purchase it at its existing use value plus 25% for compensation. The State should be purchasing land but not at ridiculously high prices. That, of course, was forgotten about and we have done nothing about land, which is an issue.

I am not sure if I have fully answered Deputy Ó Broin.