Oireachtas Joint and Select Committees

Thursday, 25 January 2018

Joint Oireachtas Committee on Housing, Planning and Local Government

Update on Rebuilding Ireland - Action Plan for Housing and Homelessness: Discussion

9:30 am

Photo of Eoghan MurphyEoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

A house could be kept in the family or it could be sold but it would not be available to the rental sector. The latter is a big part of the market. We need to ensure that there are enough homes to rent. I do not dispute the need to make sure that we have proper protections for tenants. I do not think that we have a mature rental market in this country. We need to try to develop one because renting is becoming more of a lifestyle choice for a lot of people. However, there are many who are forced to rent who would rather be able to buy. That is why we have been focusing more on affordability for buyers under the affordable purchase scheme and the Rebuilding Ireland home loan.

A rental strategy was developed under Rebuilding Ireland and is being implemented. However, one of the first conversations I had when I took over and met representatives from the RTB related to the need to give the board greater powers under legislation and a more sustainable financial base and to move it into a position of being a proper independent regulator for the sector. Last September I announced a two-year change management programme for the RTB to facilitate this in order that it can be in a position to balance those rights between tenants and landlords effectively.

I disagree that there is very little protection for tenants. I think there are strong protections. However, I recognise that we need to make certain protections stronger. We have two items of legislation coming, as part of that change management programme for the RTB, that are going to look at those aspects. For example, people caught up in rent evictions and issues of that nature. There is a case before the courts at the moment to see those how robust the existing legislation is. We need to do more in that area and I am committed to doing more to ensure that individuals are not interpreting existing laws in their favour to the detriment of people and their security in their homes as renters.

Prevention is absolutely key for 2018. In 2017, we brought in more emergency beds. We have accelerated the hub programme. On Monday, at the housing summit, I spoke about accelerating it even further by using rapid technologies. This year, prevention is key. Tenants in situ are going to be part of that. I will come back to the point the Deputy made HAP and the numbers separately. If a landlord is selling a property and we make it an absolute condition that property can only be sold with tenants in situ, then that means the landlord can only sell to another landlord. That is going to potentially breach that person's rights. If we can do it by way of an incentive through the tax code whereby, if a person is selling a property, he or she is actually going to make a lot more money from it if he or she spends a bit of extra time working to sell it to another landlord, then that is something worth exploring.

The Minister for Children and Youth Affairs, Deputy Zappone, brought this matter to my attention. We are working together to see if there is something we can do with the Minister of Finance, Deputy Donohoe, officials and the Cabinet to see how we can incentivise the selling of homes with tenants in situ. It is a key aspect of the prevention measures on which we need to work in terms of prevention and keeping people in their homes as we build new houses. If we cannot work harder at prevention, then it going to be very difficult through 2018 with families and individuals becoming homeless.

We had a definition of substantial refurbishment produced last year. As part of our change management programme, we will move to put that into legislation over the course of this year. In respect of rent transparency, that information should be provided today to someone who is moving in as to what was the previous rent. However, I recognise that we can actually be more effective on this ourselves. We can actually only do it from a public transparency point of view once we have annual registrations of tenancies. That is part of the change management programme for the RTB. It needs to be able to build a system that can handle that. It is doing that at the moment. Funding is being provided. That will take six to 12 months. We are putting in place the legislation to allow the board to carry out annual registrations of tenancies.

We talk about the rent increases in Dublin that we are experiencing. If we look at the quarterly reports from say quarter two yo quarter three last year, we do not have the fourth quarter report yet, we are still trying to understand the data. However, because we do not have annual registrations of tenancies, it is difficult sometimes to understand the data. If we look at quarter two to quarter three, there is an increase of at least 6,000 new registrations of rental properties. Are they brand new properties onto the market? If they are, that is very welcome. That obviously will affect the rental rate of inflation because they are not captured by the rent pressure zones. However, they may not be new properties. They may be properties that may have been registered previously under a different owner or maybe a different partner who owns the property. Work is needed to drill into that data so we can get a proper understanding of how the rent pressure zones are working.

If we look at HAP, the recommendation from the joint committee was for 50,000 new homes in social housing stock. That is something we can now do because of the additional €500 million that was secured in budget 2018 under the capital plan. Obviously, however, 50,000 is the number of new homes going into the social housing stock. This implies that another mechanism will be needed to look after people on the housing list to get them into secure tenancies. That is the purpose of HAP. If we look at the top rents - Fingal and Dún Laoghaire were mentioned in this regard - and how high they are, this is why we introduced the homeless HAP. This is why they are so high there.

If the choice is for someone to fall into emergency accommodation or for us to pay more to keep that person in said accommodation, then we will pay more. It is a bit of a Hobson's choice in one way. It is not a choice that we would not necessarily like to have to make. While we do not have the stock - we do not have it because Rebuilding Ireland is a five-year plan - we are reliant on the private rental sector. Rather than having the disruption, the distress and the crisis that would pose for the person or the family falling into homelessness and emergency accommodation, we use the homeless HAP as a preventative measure and as an exit measure to keep people in their homes. This means we have to pay more. That is where we are at the moment because of legacy issues around the outsourcing of responsibility for social issues made by previous Governments. We are now taking those responsibilities back.

According to the report that was provided, 20% are benefiting from the flexibility that is in HAP to extend the payments. That is actually quite low given what is actually happening in the private rental sector and inflation of rents in part of the country. It is being presumed that will escalate and HAP is doomed because it will eventually reach a point where every payment is at 100% in terms of the flexibility. However, that is not the case as we increase our social housing stock. If we look at the figures for 2017, an additional 2,000 more homes were brought into the stock of social housing than we had planned for in the year. I think it is a 40% over what was planned, 7,000 homes in social housing stock.

As we exceed those types of numbers and targets, it means that more people will be benefitting from social housing stock than from HAP placements. As we get to 2020 and 2021, on the existing timeline, which might be brought forward if we work as well in 2018 as we did in 2017, we will be placing more people into the social housing stock than will be relying on HAP for their tenancies. It does not necessarily imply then that 20% differential is only going in the one direction.

In regard to the question on-----

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