Mr. Tom O'Brien:

Going back to Deputy Ó Broin's and Deputy Barry's comments, what we have is probably a theoretical argument. I absolutely accept that there are accidental landlords in the market. If the policy is that these people should not be in the market, let us get into the debate as to where the rental market is going. The REITs have no appetite to acquire units on a piecemeal basis, one here and one there; they want lot sizes together as they are easier to manage, etc. Who will provide the rental stock then? The choice is either the private accidental landlord, the small landlord, or perhaps the professional landlord, as Deputy Ó Broin says, or the State - perhaps a combination of both through the housing agencies, etc., or the private investment community. However, if we accept that the private investor gets into the market, we are into a theoretical discussion as to what return someone should get on his or her money for investing in a market. Are we asking people in the private community - this goes back to Deputy Barry's point - to take on and provide accommodation at substandard returns or at a cost to the landlord? This is really what much of this comes back to. If the private community says this is not something it is willing to do or, most likely, can afford to do, we are back to the argument that the State should really step in and provide accommodation and cater for the people to whom Deputy Barry refers. It is not fair to ask the private community, regardless of whether an individual believes it would be a nice thing to do, to house people at its own expense. People pay a lot of tax in this country. Despite what is put out in the media, Ireland is a high-tax country on a personal tax level. People already pay their way through taxes, and it is not fair to ask them to subsidise housing in addition. If that is where we are going, I suggest that policy should be aimed at boosting supply and perhaps increasing the role of the State in the rental market.

My second point is just based on anecdotal evidence. Members can take it whatever way they want. I accept that rents are rising but I deal with this business every day of the week and there is a ceiling on rent because, as Deputy Ó Broin rightly said, wages are not rising at the same level as rents have been. Rents have risen from a very low level, but wages have not risen as much. Essentially, assuming there were no rent caps, if one put up one's rent by 10%, I can tell members one would be waiting to rent it because people would not be able to afford to rent it. Most people will not take on a rental commitment in excess of what they can afford.

There is a fine line between pushing rent up to a level where the landlord will not get any inquires and keeping it at a level that is affordable. The market will only pay what the market can afford. I would have thought or I am pretty sure that without the rent cap rents would have stabilised. There is an affordability element. People only earn so much and they can only afford to pay so much. They cannot rent for more than what they are earning. On a logical basis, rent could not have kept on increasing, regardless of whether rent caps came in.

Reference was made to interest deductibility. Interest rates are very low. There is already a reduction in interest relief that is claimable. It is not a major incentive to landlords.

I urge the committee to consider one point. If criminal sanction is the way we are going, then to incentivise tenants to pay their rent there should be criminal sanctions if tenants do not pay their rent. I am not being smart oe facetious, but we cannot have it on one side and not on the other. Let us suppose a landlord overcharges rent by €30 per month and is subject to a criminal sanction, but a tenant does not pay any rent for two years and there is no criminal sanction. There has to be a balancing.