Oireachtas Joint and Select Committees
Wednesday, 4 July 2018
Joint Oireachtas Committee on Housing, Planning and Local Government
Private Rental Sector: Discussion
The next item is standards in the private rental sector - a review of policy and practice. Today's meeting will involve engagement on the current policy and practice of standards in the private rental sector. On behalf of the committee, I welcome to Mr. Paul Dunne and Mr. Neil Maher, from the Department of Housing, Planning and Local Government; Ms Rosalind Carroll and Ms Janette Fogarty from the Residential Tenancies Board; Mr. John-Mark McCafferty and Dr. Aideen Hayden from Threshold; and Mr. Michael Walsh and Mr. Colm Smyth from the County and City Management Association, CCMA.
I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. I call on Mr. Dunne to make his opening statement.
Mr. Paul Dunne:
I thank the Vice Chairman and the members of the committee for the invitation to attend today to discuss standards in the private rented sector. Accompanying me is my colleague, Neil Maher, assistant principal officer in the rental market unit in the Department.
Regulations setting out minimum standards for private rented accommodation generally were first set out in the Housing (Standards for Rented Houses) Regulations 1993. However, a number of changes have been made to the regulatory framework since 2008 to reflect the requirements of a modern rental sector. The current minimum standards for rental accommodation prescribed in the Housing (Standards for Rented Houses) Regulations 2017 were introduced in July 2017. The purpose of the regulations is to provide residential rental accommodation that is safe, efficient, durable and comfortable. These regulations specify minimum health and safety requirements across a range of matters, including fire, structural repair, sanitary facilities, heating, safety of gas and electricity supply. With very limited exemptions, these regulations apply to local authority and voluntary housing units as well as private rented residential accommodation. All landlords have a legal obligation to ensure their rented properties comply with the regulations. Responsibility for enforcement rests with the relevant local authority.
The sector faces a number of serious challenges in regard to the minimum standards, including the low rate of inspection, high numbers of non-compliant properties, inconsistencies with interpretation and application of the standards and guidelines, and lack of follow up and enforcement action. The strategy for the rental sector recognises high-quality rental accommodation is critical to the success and sustainability of the residential rental sector and its attractiveness as a long-term accommodation option for households. It sets out a number of important actions to ensure the safety and quality of rented accommodation, by bringing rental standards up to date and strengthening processes for inspection and compliance.
A review of the standards was conducted in 2016. The aim was to ensure that the applicable standards reflect requirements of a modern rental market, contribute to delivery of high-quality housing and provide increased protection for tenants by addressing critical health and safety concerns, with particular focus on three main areas: to introduce changes to existing provisions in order to reinforce them and to include additional provisions not already covered; to strengthen local authority implementation through closer collaboration, co-operation and dissemination of best practice; and to focus on increasing awareness around the minimum standards.
The Department published comprehensive guidelines in August 2017 to assist and support local authorities in implementing the regulations. To increase the numbers of properties inspected, specific ring-fenced funding for inspection and compliance activity has been identified from 2018 with annual targets for both inspection and compliance agreed with local authorities. The objective is to increase inspection numbers incrementally each year with the aim of achieving a 25% annual inspection coverage rate by 2021.
A rental standards working group was established in 2017 to develop proposals and make recommendations to give effect to the actions related to standards under the rental strategy. Three specialist subgroups are being established, including an IT subgroup to develop and roll out a national standardised IT system, and to develop or purchase software solutions to upgrade from current spreadsheets and Word systems in the short term; a training subgroup to develop and implement a training programme for enforcement officers, and host an annual seminar to share knowledge, best practice and to support continuous professional development; and a human resources subgroup to examine, make recommendations and secure agreement on all other HR aspects, including annual inspection targets, staff numbers, grading structure, funding, qualifications, legal services and so on.
Since establishment of the Residential Tenancy Board, RTB, more than €36 million has been paid to local authorities to assist them in the performance of their functions under the Housing Acts with more than 229,000 inspections carried out.
However, additional resources need to be provided to local authorities to facilitate increased inspections of properties and ensure greater compliance. Provision has been made for an allocation of €2.5 million in 2018, with further increases proposed each year up to 2021.
The Department recently issued letters to local authorities outlining the reforms and improvements envisioned for rental properties under the strategy. The letters set out annual targets and requested each local authority to prepare an implementation plan to achieve them, including details about staffing, resources and other needs that will be required. Individual implementation plans have now been received and are being examined prior to engaging directly with the local authorities concerned with a view to finalising and assisting with implementation and delivery. Opportunities for delivering the inspectorate function on a shared basis, for example, legal services, will also be explored and implemented as appropriate.
I thank the committee again for giving the Department this opportunity to discuss accommodation standards for the rental sector. I look forward to discussing this in more detail now with the committee. I reiterate the Department's commitment to continue to prioritise and deliver on this important area. My colleagues and I will be happy to respond to any questions or comments the committee may have.
Ms Rosalind Carroll:
I thank the Vice Chairman and committee members for the invitation to attend today to discuss the important issue of standards in the private rental sector. I am accompanied today by my colleague, Janette Fogarty, assistant director with responsibility for dispute resolution services. As the committee is aware, the RTB is not directly responsible for the inspection and enforcement of standards in the rental sector. However, as the national public body set up to support and develop a well-functioning rental sector in Ireland, the RTB has, within its broader remit, an important role to play in the quality and standard of rental homes. I will set out the RTB's role in relation to standards and further issues for consideration.
The RTB has 340,000 tenancies registered representing 174,000 landlords and 705,000 occupants. With regard to regulating minimum standards in the sector, the RTB has a number of roles. Since 2004, the RTB has provided funding to local authorities at the direction of the Minister for Housing, Planning and Local Government to enable them to meet the cost of inspections of private rented accommodation. The total money distributed to date is more €34.5 million, with €1.7 million provided in 2017. Traditionally, one-fifth, or 20%, of the RTB registration fee income was ring-fenced for inspections. However, this was suspended from 1 July 2016 in light of the RTB’s decreasing registration income. Despite this suspension the RTB had already set aside funding from previous years in a trustee capacity for inspections, and another €1.2 million remains available to be drawn down for inspections in the RTB funds.
The RTB also has an important role in relation to standards arising from its dispute resolution function. In addition to the standards for rented housing regulations, there are obligations under the Residential Tenancies Act for landlords to comply with the rental standards and also to carry out all necessary repairs and replacements to rented dwellings. This means that a tenant can refer a dispute to the RTB in relation to the standards and maintenance of the dwelling or breach of landlord obligations or responsibilities. In 2017, 603 cases relating to the standard and maintenance of dwellings were received by the RTB. The nature of these cases vary and range from issues such as mould, damp and pest control to appliances in need of repair or replacement and issues of heating.
To facilitate the local authority inspection programmes to enforce minimum standards, the RTB shares data on registered tenancies and associated details to local authorities on a periodic basis.
As the primary regulator in the sector, the RTB wants to play its role in ensuring a more efficient, standardised and transparent inspection and enforcement process across local authorities. In this regard, there are opportunities to enhance both the RTB and local authority role in data sharing to improve regulation of the rental sector from both a standards and a registration perspective. As a member of the departmental working group on rental standards, the RTB is exploring opportunities to use its capacity around data intelligence to ensure better compliance with minimum standards and the broader regulatory framework.
As a national body with a national database of tenancies, one of the most important roles of the RTB involves education and awareness. We have a broad reach, which allows for consistency of messaging on important issues. In August 2017, following the tragic fire in Grenfell Tower in London, the RTB issued correspondence and an information leaflet to 175,000 landlords to raise awareness of fire safety and the updated minimum standards for rented accommodation. The RTB has also been rolling out targeted campaigns on social media over the past number of months with engagement from local authorities and fire authorities.
The RTB is developing a voluntary landlord accreditation scheme to support landlords to comply with their responsibilities and to increase professionalism within the sector. A key part of the scheme will be to raise awareness and encourage best practice in the management of the homes landlords are providing, including an overview of minimum standards and landlords' obligations with regard to these. The RTB believes that as the accreditation model matures, there is potential for it to be used as a certificate of compliance across all regulatory areas.
To conclude, the issue of minimum standards in rental accommodation is very important. For tenants and their families who are living in poor-quality, unsafe or substandard accommodation, this can have a serious and detrimental impact on their lives. From our perspective, there are two issues to be addressed. First, we need further education and awareness with a consistent approach at a national level to inform landlords and tenants of their rights and obligations. Second, we need to work in partnership and develop better ways of reporting to deal with the very serious issues of overcrowding in rental homes that are below standard or dangerous. It is the RTB's view that we need to find a way to differentiate between these very serious cases and other cases of non-compliance that can be dealt with by working with the relevant parties through education and awareness. At present, our reporting system and regulatory framework does not differentiate between the two and it is important that we have an accurate understanding of the actual levels of non-compliance in the sector and the level of seriousness. The RTB is on the working group on rental standards and is supportive of increased inspections of rental accommodation. We are committed to working together in partnership across regulatory areas in a more cohesive manner.
Dr. Aideen Hayden:
I thank members for inviting Threshold to appear before it and give its input on standards in private rented accommodation. I am accompanied by our chief executive officer, CEO, Mr. John-Mark McCafferty, and our legal officer, Mr. Gavin Elliott. Threshold was founded in 1978. We are a national housing charity whose aim is to secure a right to housing, particularly for households experiencing poverty and social exclusion.
Threshold's input to the Oireachtas Joint Committee on Housing, Planning and Local Government's discussion on this issue comprises the following: an examination of poor standards in the sector drawing on case studies from clients accessing our services; consideration of enforcement and inspections; Threshold's policy on an "NCT" for housing, how it would work, the benefits to the State and the pitfalls of self-certification, defining and dealing with overcrowding and dealing with openness and transparency.
In our opinion, the Government can no longer shy away from its commitment to provide quality housing and adequate standards for those in housing need and to ensure minimum standards are strictly adhered to in the private rented market. Inadequate physical standards consistently rank as one of the top complaints raised by clients with Threshold. I will provide a number of examples - as we all know, we have had a very difficult winter - of not untypical cases presented to Threshold on a daily basis. Such cases include that of an expectant mother living with two young children in accommodation that is heated inadequately through two small electric heaters, a couple and their two children who all sleep in the living room of their home, which is heated through an open fire as long-term problems with the central heating have resulted in cold, damp and mouldy bedrooms and a couple and their premature baby living in a cold and draughty property where the heating and shower are broken and some of the windows do not close properly. These are just examples of the wide-ranging cases that come to our organisation in respect of minimum standards and their breach.
A significant number of rented properties are substandard and the current system of local authority inspections is failing to enforce the minimum standards required by law. In the year to date, Threshold has dealt with 585 standards and repairs queries and in 2017, our housing advisers dealt with 1,261 queries relating to standards. We live in an era in which employees are afforded protection in the workplace by health and safety regulations, diners in a restaurant can expect that the kitchen of the premises is regularly inspected to ensure health and safety standards, road users are obliged to adhere to preventative road safety measures that ensure vehicles on Irish roads are in sound working order and a consumer can insist that a good is "fit for the purpose". Someone looking for a home to rent is a consumer but a potential tenant's familiarity with building standards is limited. Tenants do not carry a damp meter with them when they go to view a property. Many tenants are afraid to reject or walk away from a letting, particularly when supply is so scarce and rent levels are astronomically high. Few consumer goods more strongly merit protection than a home. This includes freedom from damp and condensation, proper heating facilities, adequate ventilation and hot and cold running water.
Unfortunately, enforcement and inspection of standards in the private rented sector are recurring concerns for Threshold. In 2016, the number of dwellings that did not meet regulatory requirements stood at 10,418, which is an increase of 1,978 based on the 2015 figure of 8,440. More dwellings were inspected in 2008 than were inspected in 2016. In 2016, legal action was taken in only 16 cases nationwide. Fourteen of these were concentrated in Dublin. Within Dublin, South Dublin County Council inspected 1,355 dwellings and Dublin City Council inspected 1,751. However, Dún Laoghaire-Rathdown County Council only managed to inspect 271 dwellings. In 14 local authorities where dwellings did not comply with standards, zero notices were served on landlords for improvements to be carried. In our opinion, this represents a failure in the system.
Threshold believes the introduction of a certification scheme or an "NCT for housing" is the best approach to address the shortcomings of the current system. In such a scheme, the burden of proof for compliance with minimum standards should rest with the landlord who should be required to provide a certificate of fitness to the local authority before a property is rented. The integration of such a scheme with certification requirements relating to energy efficiency, fire safety, tax obligations and registration with the RTB would promote greater compliance in general. Given the importance of this issue and the historic failure of the policy-making system to respond to this, Threshold recently established an online petition to seek public support for an NCT-type certification system in rented accommodation. As of late June, the number of signatures is 10,229.
How would a certification system work? The property would be inspected by an independent and suitably qualified professional, the certificate be displayed in the rented dwelling, a certificate would be valid for a fixed period, the landlord would be required to supply the RTB with the details of certification, the certification scheme could be rolled out on a phased basis and an indicative fee structure could be established that would be affordable for landlords and would be tax-deductible.
What would be the benefits to the State? The onus would be placed on landlords to prove that they are compliant with the minimum standards. A prospective tenant would be assured from the beginning that the dwelling complies with all legal requirements. In our opinion, overall compliance levels would rise.
We do not believe that self-certification is the answer to the current problem of poor standards in the sector. It relies on landlords being caught and we are all aware this is no deterrent in the current system. There needs to be sufficient sanction for failure to comply with minimum standards and self-certification is not going to achieve this. Threshold believes that if car owners cannot self-certify a motor vehicle then rented homes should be no different.
Overcrowding in the private rented sector is a serious issue that is increasingly coming to light through our services. As a result, we believe it is imperative that a definition of overcrowding for private rented accommodation is inserted into existing minimum standards for accommodation to enable local authorities or a national agency to inspect properties and ensure compliance.
While there are minimum standards covering some aspects of private rented accommodation, the regulations are silent on how many people should occupy the accommodation provided. Previously a landlord had to state the number of occupants and record the estimated floor space but this obligation was removed by section 62 of the Residential Tenancies (Amendment) Act 2015, and their inclusion would be useful in terms of measuring overcrowding in order to inform policy.
Finally, I would like to raise the issue of openness and transparency. At the moment there is no openness and transparency in relation to the properties that are inspected. In our opinion it should be clear and evident from the statistics that the properties that are inspected are those that are most deserving of being inspected in particular, properties that re pre-1963; properties that are more likely to be in breach of minimum standards; and properties where a local authority would be aware of potential shortcomings, as in for the sake of argument, unfortunate situations such as Priory Hall.
Can I thank the committee for their indulgence and for their invitation to appear here today?
Mr. Michael Walsh:
Thank you. I am joined by my colleague here from Dublin City Council, Mr. Colm Smyth, principal environmental health officer and I will touch on some of the elements of the written statement considering the time issues.
First with myself and Mr. Smyth representing Waterford and Dublin respectively, we present a reasonable picture of the largest urban authority and a smaller urban authority in Waterford city, with a significant rural element in terms of the county area.
We broadly agree and are working with the Department on the current policy position which is to ramp up inspections as quickly as possible and we see 2021 as being the realistic position for reaching a 25% target in terms of inspections on an annual basis. We see that being prioritised. Our general view is that this would be very dependent on the data being generated, if we were to move to a risk-based approach, and a rate of around 20% may well achieve such compliance, as long as it is a targeted risk context.
There has been significant improvement over recent years. I note the Threshold reference to 2016, but the simple reality is that there has been in excess of a 50% increase in 2017. There will be a further 50% increase in the rate of inspections in the current year. There is a significant effort and resource going into this issue. Dublin City Council in the current year have employed 12 additional environmental enforcement officers to ramp up their activities. In my own instance, where I already had one with back office support, now we have increased that by employing a further inspector. We would see ourselves as moving to between 15% and 20% of inspections annually by next year. Right across the county there is a very significant additional resource being provided. We are working with the Department in terms of the areas that Mr. Dunne would have outlined already, and we will see that bringing about significant improvement.
Patently, we would accept the position as outlined by Threshold in some respects that there is an element of contravention and, human nature being what it is, we must strive to get the balance between enforcement and compliance right. The nature of contraventions vary very significantly, from nominal contraventions, that do not necessarily have a major impact on the living conditions for those tenants occupying the buildings, to things that are more serious, in terms of health and safety or otherwise. We want to gather this data ultimately and are currently looking to develop an ICT system that can report comprehensively in that context. We have listed some of the types of contraventions and I will not go through all of them. It is fair to say that pre-1963 properties are a particular difficulty. We are also finding difficulty with the most recent regulatory changes in 2017, where in regard to some of the elements provided for in terms of window restrictors or carbon monoxide detection or otherwise, people simply have not caught up with or may or may not be aware of them. There is certainly a need for the provision of further and continuing information to such landlords.
We have outlined a number of improvements that we would intend to achieve in the first instance in our statement and we would equally say there are spaces that we would certainly be open to dialogue on, and on which perhaps the Oireachtas or the Minister have a role in enhancing powers.
It is certain, and I would emphasise this, that the resource base around the inspection regime is very significant and has to be ramped up really significantly if there is going to be impact in this context.
At the end of the day, there are a number of choices. Who then pays for that? There is the landlord, the State, and the tenant, obviously. In general terms the landlord suffering these costs will ultimately pass them on to the tenant, which is the reality. We need to get to a point - which we are not at the moment - where full compliance is the norm. It is fair to say that the majority of landlords, particularly professional landlords, are compliant. It is equally the case that there is a minority where compliance is not the norm and the challenge for us, as regulators, is to ensure compliance. We welcome dialogue about how we get there. We are seeking continual improvement here and we welcome this committee's consideration of this issue because our common goal is very simple. We want to ensure we get to a point where compliance is absolutely the norm.
I wish to personally thank all of the speakers for their presentations; we have had a look at them and the word that is emerging here is "partnership". Ms Carroll talked about the need for partnership, joined-up thinking and synergy. Before we proceed, I contacted a number of councils across the country yesterday, as I would do as standard practice before any joint Oireachtas committee meeting on housing, planning and local government. I would circulate a certain amount of documentation and encourage them to come back and engage - it is one of the things I do. I received the largest volume of emails from councils and I will cite just three, without naming individuals, and one, Dún Laoghaire-Rathdown County Council, which was mentioned by the speakers. Their councillors tell me that the provision for inspection for Dún Laoghaire is close to 2% of the rental income, approximately 300 of the 15,000 budgeted for. There is general frustration in Wexford and Meath where the common theme in all of the emails received is that a lot of people come from social housing lists. They are known and the accommodation has been identified as being unsuitable, with damp, mould etc. These people have been prioritised for housing. Yet, within weeks, these same houses that the council have come out and looked at as being not suitable for their housing needs, are filled again with another group of people. These people are then back on to the council saying, within weeks, there is damp, mildew, mould and the same problems recur.
I am particularly thinking of a block in my own area - which I am not going to single out here because I do not think it would be right or proper - which has effectively become a whole ghetto of really bad stuff. I went into a house the other day where the landlord had divided up one room into a three-room unit, drilled a hole in the wall for an outlet for a shower, and rats were coming up from the manhole. That is out in Dún Laoghaire. These people - I checked to see where these people went - ended up getting accommodated by the housing authority. No one is saying "stop". The argument is that there is a crisis and we need accommodation. People keep getting stuck in this kind of accommodation and we need to address this issue. Where it has come to a council's attention that accommodation is unsuitable and they have had to move people out of that accommodation, they should immediately have to serve some sort of order or restriction. That accommodation should be condemned and it should not be rented by other people.
Dr. Hayden's suggestion on an NCT makes sense. Threshold has been campaigning on tenancies long before anyone else. This is an initiative that makes common sense. If one does not get an NCT for one's car, one does not drive the car. It is as simple as that.
We must be very clear. The same roles have to apply for social housing. I accept Mr. Walsh mentioned that in the report. We have social housing stock that is not fit for purpose. I have seen letters that were written to tenants asking them to get Domestos, pull the beds out from the walls and wash the walls. People with asthma and really serious bronchial problems are in accommodation that is not suitable. Sometimes the entire focus is on the private sector, which I accept needs to be addressed, but the same standards and NCT-like approach should be applied to social housing because we have social housing stock in this country that is not suitable. I have seen some very unsatisfactory accommodation. That is an important point to make.
In 2016 the then Minister, Deputy Coveney, devised a strategy for the retail sector and launched Rebuilding Ireland. Many things were going to happen, including the introduction of a new standard of regulation and increased inspections. There was reference to coverage, compliance, ring-fencing funding and the development of efficiencies with IT services. That was all talked about in 2016 and it is now 2018. Everyone is on the same page. Everyone wants to get the thing done. It makes sense for us as a committee to promote an NCT-like approval for housing. We can discuss it later. If a property does not reach the standard, it is taken off the market and is not let. We have had a good discussion today but we need to progress it. Threshold has set out a very simple model which is doable, practical and easily understood and it is something we should pursue. I thank the witnesses for their contributions.
Mr. Paul Dunne:
I thank Senator Boyhan for his comments. I think he is right. We recognise there is a difficulty in standards in private rental accommodation. The idea of an inspection regime is to have an impact on those standards and to improve them. Obviously, that is not working. The incremental strategy is designed to increase the impact and to improve the standards. We have revised the standards. The regulations came out in July 2017. We have issued guidelines to local authorities on how to implement the standards. We have set up our working groups. As Senator Boyhan said, a partnership approach is needed. We are committed to that. We are committed to increasing inspections, but there are also other areas on which we need to focus. Education and awareness are very important. We must make sure each landlord is aware of the standards and the legal obligation he or she has to enforce the standards, and the responsibilities and liabilities they put on them.
I will sit down with Threshold and go through the NCT approach with it. I do not make any commitment but I will consider it. There are options such as self certification as well as an NCT approach and there might be an option for outsourcing inspections with a certificate at the end of it. There are plenty of options but I think we can sit down and consider it. There is a commitment on behalf of the Department going forward to try to increase the inspections. Part of that approach is to ensure we follow up on enforcement where a property is in serious breach and in serious non-compliance. Enforcement for landlords who do not take their responsibility seriously will send out a quick message that it is the responsibility of landlords and they have to get in line. Many landlords do comply and if minor non-compliance is brought to their attention they remedy it very quickly. I am not attacking all landlords, it is just a cohort that does not seem to accept its responsibility.
Ms Rosalind Carroll:
I will briefly respond to the point made by Senator Boyhan on partnership. That is the key. We have a fragmented regulatory structure because we have the local authorities on one side and us on the other and I think there is a lot of room for us to improve that. We will work in partnership over the next year to try to address that. It should not matter whether a member of the public refers an issue to us or to a local authority. We can put systems in place to deal with that.
Reference was made to the stock coming back in and also to data intelligence. Mr. Walsh talked about risk-based frameworks. At the moment, when one sees a list of contraventions, that is all it is; it does not identify what is serious versus what might be a minor infringement. In terms of targeting the bad stock we must get to a point where we have a red rating to identify the work that needs to be done. We must put in a framework to address the seriousness of the various issues.
At the moment we are developing a landlord accreditation scheme. The idea behind it is to look at landlords in their overall responsibility. We want them to be able to say they have done a course which says they know not just about the standards but about everything they should be doing and that they would do an exam at the end of it. We think there is potential for the NCT to be pulled in as part of that. There is a lot of potential in that model which we are piloting at the moment. We should be able to report to the Oireachtas on that in the future.
Dr. Aideen Hayden:
I am going to work backwards with Senator Boyhan's comments. I completely agree with his comments on social housing. There is a major issue there in terms of the funding of the maintenance of social housing. We are well aware that an awful lot of what happens in social housing is reactive maintenance. In most local authorities there has not been a stock condition survey since the early 2000s, so we have a major issue with the quality of social housing. A lot of people do not seem to realise that the standards for rented housing also apply to social housing and there is an issue there that must be addressed.
On inspections, it is our experience that a lot of local authorities do reactive inspections. In other words, they inspect HAP properties, for example, or they inspect where there are complaints, rather than having a proactive inspection programme. In terms of resources, I completely agree, the inspection system has to be properly resourced. We have to also accept that there are some local authorities that will not have the resources, in particular smaller local authorities. The shared services model needs to be investigated. We see, for example, the shared services model operating very well in relation to HAP with Limerick city and county councils. There is room to look at that model to a greater extent.
I thank Senator Boyhan for his support for the NCT system. In terms of the partnership model, in our opinion the NCT system works complementarily with the current inspection system, which places the onus on the local authority to prove a landlord does not meet the standards and it is a multi-stage process in many instances. The advantage of a certification system is that one has to have it from the very beginning before one is entitled to rent property. There is really no difference between it and a partnership process but what we propose would make it easier rather than more difficult for local authorities to fulfil their function.
Going back to the issue of properties not meeting standards on a consistent basis, I do not wish to be negative towards some local authorities, but there is a very big difference between them. We are aware of some local authorities that do inspections in a brand new apartment block, carry out inspections on a selection of ten apartments and tick a box for 300 inspections. I compliment Mr. Smyth who is here with us today for the intensified inspection programme Dublin City Council carried out between the canals, which specifically targeted pre-1963 properties that were known to be in multiple occupancy and were far more likely not to meet minimum standards. It is very important that we do have an open and transparent system when it comes to inspections. One of the advantages of an NCT-self certification system is quite simply that when a landlord is registering a property with the RTB, as he or she is legally obliged to do, and he or she does not present a certificate of compliance when the property is registered, clearly, one has a breach. The bottom line is that one can focus on those landlords who are outside of the sector, because if they are outside of the sector in relation to compliance on one level, we know from experience they will be outside the sector in compliance with everything else, be it fire safety, tax or overcrowding. No matter what it is, non-compliance in one area generally signifies non-compliance in another.
Mr. Michael Walsh:
We are legally obliged to meet minimum rental standards for social housing. We are seeking to achieve them and looking to move to a planned maintenance and inspection regime. That is a dialogue that is happening with a separate section of the Department to that of Mr. Dunne and Mr. Maher. There is certainly distinct movement in that space. However, sometimes the political system is a little ambiguous in it. The simple reality is that there is tolerance of any increase in any context in the resource base, through rent increases or otherwise. There is as a consequence a risk of a diminution of overall standards. In other words, everything will meet the minimum standards, as distinct from the other way around. That is a challenge for us because, as local authorities, we want to push up our level of service, but in some respects that comes at a cost. Generally, there is no reflection of this in the income base.
Equally, on investing in our houses generally at a policy level, there is a matter for the Oireachtas and the Minister to consider. In reality, our current policy is that we build houses and within a relatively short period we give them away on a subsidised basis by way of tenant purchase schemes and otherwise. From a policy perspective, investment in an asset that a tenant is entitled to purchase and that will, therefore, be taken from the local authority in the future is not terribly rational. That is all I will say in that context.
I consider the social housing function as being slightly separate. I take the speaker's point to some degree in the context of the local authority housing properties that were mentioned. However, there are different functions. Housing inspections are generally all made within one Department, but the scheme of letting priorities prescribes the circumstances in which a house is to be let in any individual local authority area. As such, it may be that somebody is housed because of the scale of the property required relative to family size or because of any number of other circumstances, as distinct from meeting minimum standards. I do not think one can align the two directly, although I am not denying the essence of the point. However, first, we have to adhere to the scheme of letting priorities. On the other hand, I take the point that perhaps there should be clearer communication that a property needs to be inspected if issues are identified. I can only speak for my local authority, but I know this to be the case - any arm of our organisation that becomes aware of an issue in a rental property brings it to the attention of the inspectors and vice versa. If there is a serious fire standards contravention, for example, we bring it to the attention of the fire officers who, if necessary, can act under the Fire Services Acts. I am not saying that is absolutely uniform, but it is the space to which we are getting. I do not know if Mr. Smyth wishes to comment on the issue.
Mr. Colm Smyth:
I agree that enforcement is the key and that it has to be balanced between being proactive and reactive. Creating risk profiles of properties that are more likely to be non-compliant, which is what we did under the intensified inspection programme, is labour and resource-intensive, but it does actually get results in the long term. It can be a long-term undertaking. For our part, within Dublin City Council we have set up a private rented unit to give a corporate response on properties that are inspected. This means that there is improved joined-up thinking and inspections between planning enforcement, housing standards enforcement and fire safety standards enforcement. They are better co-ordinated, certainly within Dublin City Council, and I presume that is the case within local authorities across the board.
I thank the delegates for the presentations. It is eight months since the "RTÉ Investigates - Nightmare to Let" documentary was broadcast and the Dáil unanimously supported a motion, of which one of the central recommendations was the introduction of a system analogous to the national car test, NCT. While the "RTÉ Investigates" programme obviously showed the very extreme end - nobody is saying that is the reality for the vast majority of those of us who live in the private rental sector - we do have a difficulty. I understand what Mr. Walsh says. He believes the vast majority of landlords are compliant, but the problem is that we do not know that to be the case. That is not me giving landlords a hard time; it is the very opposite, in fact. The issue is we do not have data to confirm it. I think most of us who engage with the private rental sector a lot are of the same view - we just do not know. For example, the data available to us, limited though they are because some of them are a little dated, show that when one looks at the relationship between levels of inspections and levels of compliance, there is actually a far higher level of compliance than some people think. Mr. Walsh is right that there is a spectrum. There is very minor non-compliance which can be rectified very quickly, while there is very extreme non-compliance. We need to be very honest with ourselves in getting a read on what is happening.
I do not understand why it is going to take us until 2021 to get to a 25% inspection rate. In the first instance, that is a matter directed towards the Minister and the Department. If it is only going to cost €10 million over four years to bring up staffing levels, I do not see why that €10 million could not be made available, given the fiscal space that will be available next year. The issue is whether local authorities could ramp up inspection rates to 25% in one year, particularly those that are at the bottom end of the inspection regime. with an inspection rate of 1%, 2% or 3%. The 2016 report of the National Oversight and Audit Commission, NOAC - again, the data are old - showed a large number of local authorities that were already at a figure of 10%, including Mr. Walsh's. To move from 10% to 25% might be more possible in a year or two years. If the Minister was to make a policy decision that €10 million would be made available immediately, from the point of view of the Department and that of the local authorities, how quickly could we move to a 25% rate, accepting that there would be differences between local authorities, depending on their current performance?
Different people have different ideas about the NCT-style system. My preference would be to combine the local authority inspection with the NCT certificate in order that when the local authority carried out its inspection, it would issue the certificate. Dr. Hayden is absolutely right - any new landlord entering the system should have to have an NCT certificate before they let. If 25% of the remainder of the rental stock was inspected in one year, all other landlords would be caught over a period of four years. All new landlords would have to request it and would not be able to let without it and all existing landlords would obtain it over four years. A landlord would then simply have to ensure he or she had it. The certificate would be renewed every fifth year for a relatively modest administrative fee. The scheme would be relatively revenue neutral for the local authorities, but it would not be prohibitive for the landlord or the tenant if it cost between €50 and €80 to have the inspection carried out on a five-yearly cycle. I think a landlord could handle it. If we were to do it in that way, we would get the benefit of the Threshold proposal, that is, putting an obligation on the landlord. There would be a revenue source for the local authorities to cover part or most of the cost of inspections and by the end of a period of four to five years all landlords would have the NCT certificate. Inspections would continue on a rotating cycle. If it could be tied in with the accreditation system, as Ms Carroll says, we could have something really robust within a very short period. It would not be self-certification; it would not be private sector-led and there would not be concerns about spiralling costs. For me, that is the model that combines the benefits of what everybody here is recommending and I would like to see it progressed as quickly as possible.
I support the risk-based model, but coming from a local authority area where we have very few old rental buildings, I note that we have a lot of new rental buildings that do not meet standards. We need to factor this into the risk-based model also. We have lots of developments in Newcastle and Rathcoole and some in Lucan and Clondalkin that were built during the Celtic tiger era and which already have significant standards issues. They should be included.
I am interested in hearing the responses of the Department, the County and City Management Association and the Residential Tenancies Board to the point Threshold is making about overcrowding. It is absolutely right about how we should progress. Moreover, I refer to the penalties for serious breaches. Under the current legislation, someone who is in breach will receive an improvement or a prohibition notice. Again, in most cases of non-compliance that is fine, as an improvement notice will help to sort out most of the problems. However, it seems bizarre that if someone is in significant breach, there is no immediate sanction. I am talking about the small number of very extreme cases. I would like to hear people's views on how we can strengthen that aspect.
The Minister is considering this issue not in terms of the next piece of RTB amending legislation but the one after that. What level of prohibition would be appropriate to hit those instances of extreme non-compliance?
One issue that has not been mentioned but which we raised during the debate in the Oireachtas is the role of estate agents and letting platforms in advertising properties that do not meet minimum standards. There must be a responsibility and a liability on the letting platforms and, in particular, estate agents because while staff of the letting platforms do not visit the properties they advertise, estate agents do. For example, one prominent estate agent is advertising properties in my constituency that have received neither planning permission nor a building certificate. It is a matter of public record. In fairness to the local authority, it has made a complaint to the Property Registration Authority, but I believe stronger legislative sanction is required. What are the delegates' views on how that could be achieved?
I wish to raise two final points. It is unacceptable that people living in social housing do not have access to the same rights and protections as those in the private rental sector. That makes no sense. The only reason it does not happen - Mr. Michael Walsh will panic when I say this - is that the State does not want to foot the bill in having that responsibility in the short term. The cost of giving social housing tenants access to the RTB, particularly on issues related to standards and maintenance, would be phenomenal. Mr. Walsh is correct that there is a problem in meeting the cost in that regard. I am not sure if increasing rents would be the best solution, although it would be one, but ring-fencing rent payments coming into local authorities and only allowing that money to be used for maintenance could help to an extent. There is also the recognition that social housing is subsidised and that the State has a responsibility, as the landlord, to maintain these properties. There is a question mark against the level of financial support given to local authorities to meet these requirements. Take a look at the housing stock to examine windows and see if there is damp. Local authority managers will know this. I am not criticising local authorities, but the system has not been set up in a way that allows local authorities to use the rental income in the first instance. Again, I am interested in hearing the delegates' views on that issue.
The last issue is damp. While overcrowding is an issue, damp is a big issue. It is an issue in older private rental stock, newer Celtic tiger private rental stock and social housing. The difficulty is that tenants are being blamed for damp and mildew on the basis of "lifestyle issues", as they are called. We need to examine the matter from a policy and legislative point of view to provide greater clarity on who is responsible. We had an architect and chartered surveyor before the committee when we discussed this issue. They said a problem was developing in many European countries because the improved energy efficiency of new builds meant they were retaining more moisture. In addition, some of the units are smaller and there are higher levels of occupancy in social housing and some sections of the private rental sector. This combination is driving damp conditions. It is not a lifestyle issue linked with the tenant but a structural problem. Do we need a policy or legislative response? I believe it will be a bigger problem into the future.
Mr. Paul Dunne:
I will start with the 2021 targets. On the provision of support by the Department for local authorities, we do not fully fund the inspection regime. We make a contribution of €100 per inspection to support them; there is, therefore, an additional cost on local authorities to ramp up the resources available. The incremental approach was adopted to allow them and the sector in general to adapt IT systems, look at efficiencies and a consistent approach in implementation and application across all local authorities. There can be recruitment issues in having the necessary staff. An extra €10 million would not be enough because there are many other issues that have to be addressed. As Mr. Michael Walsh said, if we could achieve efficiencies and have a proper risk based approach to properties, the target of 25% might be reached earlier or, as he said, a figure of 20% might suffice.
As regards an NCT type system, we will take a look at it. As I am quite new to this, I am not sure of all that is envisaged. There are different options, as the Deputy said. There are local authority inspections which could lead to certification. We can meet Threshold and the different partners to discuss that issue.
With regard to social housing stock meeting private sector rental standards, as I only deal with the private rented market, I am not fully aware of the social housing side, but there are standards and the local authorities are active in trying to improve them. They engage with the Department in a different forum from the ones with which I am involved.
There are penalties under the enforcement procedures.
Mr. Paul Dunne:
Not a first offence. The penalty is a fine of up to €5,000 and/or six months' imprisonment. Again, when we work with the working groups and partnerships, we can look at penalties to see if there is an easier way to force enforcement and compliance. Introducing penalties is a very tricky subject, but I am willing to encourage it.
Estate agents and letting platforms are not on my radar.
Mr. Paul Dunne:
The Deputy mentioned overcrowding. We are all concerned about it. It is not part of the minimum standards for private rental minimum accommmodation, but there is a case for its inclusion. However, one gets into difficulty with the definition. We all want to deal with severe cases of overcrowding, but we do not wish to penalise families that have an additional member. It is about getting the balance right and giving the right powers to the local authorities to implement and enforce it. We are in ongoing discussions with DCC on some proposals; therefore, it is on our agenda.
The Deputy mentioned dampness. As I am not a technical person, I will have to have a word with our building standards people to see if they can shed any light on it. If there is something we can do in amending the regulation on dampness, we will do so, but I cannot comment on it further than that.
Ms Rosalind Carroll:
The Deputy asked about the RTB's perspective on overcrowding. To echo some of what Mr. Paul Dunne said, we believe there has to be something on overcrowding. There is a definition in the Housing Act 1966 which the CCMA representatives can address. We must also be aware of what is in the Residential Tenancies Act, under which a landlord can serve a notice of termination in respect of somebody who is overcrowded in his or her property. The instance the Deputy mentioned in the "RTE Investigates" programme and some of the very serious incidents we have seen are driven in a totally different way from some of the other instances where people are struggling to afford rents and there might be three children in one room, which would not meet the standards under the Housing Act 1966. We do not want to see something being introduced overnight whereby many tenants would be put at risk of suddenly becoming homeless because we were going to serve notice on them where the local authority had stated it was not in compliance with the regulation. We must be very careful about how we do this.
On our perspective, it is about a definition of serious overcrowding. The Residential Tenancies Act contains a definition of serious anti-social behaviour and one could probably mirror something like it in the serious overcrowding piece.
It is important, particularly because of the type of housing market we have at present, that we try to differentiate between some of the issues which are occurring. A person might need six months or so to find somewhere else that is a more appropriate size or he or she might be working with a local authority to move into social housing. He or she should be not placed in a vulnerable situation in the interim. That is the only thing that we would say requires caution.
To be clear, much of the overcrowding that received media coverage in recent months may not relate to tenancy agreements. It may, in fact, relate to licence agreements. We must consider where they fit within the legislative and regulatory framework. Often, we get cases on overcrowding and it is the landlord bringing the case. It is sometimes down to subletting or to Airbnb. In many cases we have seen, the landlord was not even aware of the overcrowding. We need to examine how this occurs. A landlord might have let to one tenant who went off and made a business and suddenly put ten people into the property. How does that get dealt with in the law? It is a complicated area and we need to be aware of it.
I also wish to comment on the issue of damp and mould. We get many cases coming to us. As I said earlier, over 600 cases came to us last year in terms of standards and maintenance. Another 10% of our cases involved a breach of landlord obligations and many had to do with the standard of the property involved, repairs and so on. Ms Fogarty might comment briefly on the type of cases that come to us and how we deal with them.
Ms Janette Fogarty:
We would get cases for breach of obligations. Landlords and tenants have rights and obligations. Some of the cases for breach of obligations would be in standards and maintenance, for example, that the landlord may not have carried out repairs and replacements. In that regard, our decision makers have the discretion to award damages if there is a breach of obligations. We have seen cases for damp and mould and failure to carry out repairs and replacements. The average award given would be about €1,000, with the maximum of about €7,000 having been awarded to tenants in certain cases where there was a breach of obligations to carry out the repairs and replacements. They would range from damp and mould to not fixing the cooker, etc., to not complying with minimum standards.
Dr. Aideen Hayden:
The issue of damp very much relates to energy efficiency. It is estimated that approximately 20% of rented dwellings have a building energy rating, BER, of F or G, which is pretty low. More than 55% are likely to be considered to have poor energy efficiency, with BERs between D and G. Research by the ESRI has found that households living in relatively energy inefficient properties spend substantially more - up to €419 more per year - on energy than households with better BER ratings. That is a very important factor to take into account when we are looking at issues such as damp, for example.
On overcrowding, we would be in complete agreement. There is an absolute need and requirement to have a definition of overcrowding within the legislation. There are a number of existing definitions, as Ms Carroll has pointed out. There is the 1966 definition and there are also good examples of overcrowding legislation to be drawn from the international framework. However, one way or the other, the fact of the matter is that there are serious examples of overcrowding that go well beyond the enforced overcrowding that we are seeing because of a lack of accommodation. We are seeing situations in our services where shift workers are, for example, sharing beds at different times of the day and night. This is not and should not be a race to the bottom. We have to bear in mind that we have an obligation to ensure that we have robust legislation, particularly around the health and safety of tenants, which has to be our primary consideration.
I am very glad the issue of licensees was raised. We have serious concerns. We need legislation over and above the existing residential tenancies legislation to incorporate the protection of licensees. It is one of the most significant issues coming into our services at the moment and licensees have little or no protection under Irish law. We would like to see the Residential Tenancies Acts amended to include licensees for protection.
On the difference between social and private rented housing, for many years we have increasingly been seeing a fudge on where social housing ends and private rented housing starts. Under the Rebuilding Ireland strategy, two thirds of the social housing requirement is to be provided through the private rented sector. Under the 2009 Act, somebody who is receiving support in the private rented sector is deemed to be in receipt of a social housing support. It is Threshold's position, and has been for a very long time, that social housing tenants and private rented tenants should be brought together under the same regime, particularly in respect of dispute resolution and enforcement of tenancy rights. As matters stand - the European courts have spoken on this - local authorities are acting as judge and jury in the context of their own tenants. There is no independent mechanism for tenants to air their disputes outside of the body that is, in effect, their landlord. From the processes of natural justice, we have taken the position for a very long time that we want to see the residential tenancies legislation extended to incorporate all social housing tenants, whether they be of voluntary housing associations, approved housing bodies, traditional council housing or social housing tenants with their supports provided through HAP, RAS, rent supplement or any other format. We think the distinction between private and social tenancies is really not relevant as we are going forward.
Mr. Michael Walsh:
Mr. Smyth addressed some of the issues so I will just speak to just a couple. In the context of inspection and meeting standards, we are moving towards a similar regime in terms of social housing. For example, a pilot inspection programme was done in County Clare recently. We are taking lessons from that and are in dialogue with the Department to move forward to a specific inspection regime across the country. That will lead to questions regarding the required resources or otherwise but we would certainly see ourselves in that space from next year.
As to the question of why not before 2021, it is partly because of the fact that some are lower than where they are at the moment. In my case, I would see us being at 20% by next year. I think a good number of local authorities will be in that space. The better immediate achievement here would be for everybody to get to 20% by 2020 maybe, so that we are getting very close to it. That is really significant incremental improvement. Taken in context, Dublin city needs another 70 or 80 environmental officers to achieve that. There is an issue with workload. The courts system is failure here in some respects because at the moment we are putting a major emphasis on getting compliance with improvement notices. I do take the point, and Mr. Smyth might reflect on this, that in the extreme cases we do need to have significant sanction. The balance between compliance and enforcement is a continual tension in all enforcement regimes.
There are other things in terms of us moving forward. We need to do it on a relatively planned basis. I am chair of the housing committee and one of the great challenges we have is that the 31 local authorities do not all go off in different directions and that we keep this co-ordinated. There is a role for regionalisation in terms of back office supports in particular, so that we develop the skill sets on the enforcement side of things in terms of going to court and taking the follow-up. We believe there is space for us to do that.
We need to improve our liaison with the RTB. There are simple things such as the unique identifier. We need our reporting to be based on the geographic information system, GIS. Unique identifiers such as Eircode are not available to us in that context. I see a very significant improvement coming by next year in terms of our systems and the reporting that develops from those systems. The targets will ramp up significantly. There was a 50% improvement last year and there will be a 50% improvement this year. Incrementally, it is very good in terms of where we want to get to. We want it to be on a planned basis. The ultimate outcome here is compliance. The ultimate outcome has to be that the landlord wishes to achieve compliance before rather than after the fact. It is happening after the fact at present.
Mr. Smyth has a number of points to make.
Mr. Colm Smyth:
I will address the issues relating to overcrowding, damp and mould. I did a very quick analysis of the intensified inspection programme we did between 2012 and 2016. We did them in approximately 12,000 or 13,000 units and overcrowding was not an issue. It is a relatively recent phenomenon, possibly a result of what is happening in the rental market. This is a complex issue. If legislation is changed, that will have an impact in the context of other legislation. Dublin City Council is very conscious of that. It is important to look at natural overcrowding as a result of increases in family size versus gross overcrowding of properties. We have looked at that. The other issue in recent times is in owner-occupied properties where owners have found it difficult to meet mortgage repayments and rent out a room. It used to be for one person but now it is for two, three or four people. That is another issue. If the owner is living on the property, it does not come under the regulations.
We have looked at private rental accommodation in a general sense and we would welcome a change in the Housing (Miscellaneous Provisions) Act 1992 to include definitions of overcrowding which would consequently be brought into the Housing (Standards for Rented Houses) Regulations under which a local authority can determine occupancy rates in gross and extreme cases of overcrowding. It is not for minor overcrowding.
Instead of going through the District Court, we would like the local authorities to be given powers to take cases to the High Court or the Circuit Court in extreme cases where the property is not compliant with standards, is overcrowded or where there is any issue the local authorities deem to be serious or putting tenants' lives at risk. We feel that would be of benefit.
On damp, mould and condensation, I absolutely agree it is a highly complex issue. It is a highly complex matter to deal with in both new and old buildings. Heating, ventilation, insulation and the use of a property all have a bearing on mould, damp and condensation. It is complex. While retrofitting may increase thermal efficiency, it may also increase the consequences of condensation in the property. I would welcome further discussion on that.
I thank the witnesses for their presentations. I listened to the proposal for an NCT-style system. Such a system would make a huge amount of sense. As Dr. Hayden said, a house is one of the most important things in a person's life. It should go without saying that there could be certain standards to comply with. When Dr. Hayden talks about an NCT-style system, it is really the same as a certificate of compliance. In a sense, the witnesses are all talking about the same thing. It is about setting the standard. Is that correct?
We are talking about overcrowding. Sometimes there is an undercapacity or under-occupancy in social housing. My question for Mr. Walsh is about local authorities auditing occupancy in housing. How often is this done? I am aware of situations of families living in a four-bedroom houses where the mother has passed away and a son has taken over. There was full occupancy at one point but now there are two or three bedrooms in a social house that are not being occupied. How often are audits carried out to ensure, particularly in light of the current crisis in housing, the situation is assessed in order to ensure that social housing is sufficiently occupied and that there is not misuse?
In Dublin, rent accounts for almost 49.6% of a single person's income. Outside of Dublin, the figure for last year was 10.9%. In some cases, most of a person's income is going on rent.
I will leave it at that. Most of the questions have been asked.
Mr. Michael Walsh:
Yes. The data on under-occupancy in social housing are readily available to us. We have cause to know that level of information because of rent assessments so we have it readily available. I do not have the data at my fingertips but there is a level of under-occupancy in social housing. Primarily it is as a consequence of the partners of elderly people becoming deceased. It is quite difficult in a social context. We seek to voluntarily move people into smaller units. There is resistance in many instances for obvious reasons. People are attached to their homes, as they have known them over a sustained period of time. Equally, people have no wish to move away from their neighbours. It is a very sensitive area. We are continually seeking to engage with people. In most local authorities, there are no rights of renewal for a sibling or a child in a scenario in which the person is not the primary tenant. That varies across local authorities. There is an objective across all local authorities to achieve greater occupancy levels rather than the other way around. We have to do so conscious of the social circumstances of our individual tenants and the responsibilities we have towards them.
Dr. Aideen Hayden:
When we talk about an NCT system, we mean an NCT-style system. Senator Grace O'Sullivan is correct in that it is very much to do with certificates of compliance.
One does not wait to be caught by a garda on the road to see if one's brakes fail. We want to know that the brakes work before somebody gets into the car. Similarly, we want to know that the property is safe before somebody resides in it. That is, in effect, where we got the NCT moniker.
With regard to under-occupancy, I will not answer for the social housing sector but it has certainly been a difficulty for a long time. Many single people are living in the private rented sector because, historically, much social housing has been geared towards families and tends to be in the three-bedroom style. It is important that, as we look at the change in demographic profiles, single people should not be confined to the private rented sector. When a three-bedroom property comes back to a local authority, it should be reviewed to see if it can be subdivided into two single units, for example. There is no logical reason to take back a three-bedroom property and put it back out as another three-bedroom property. There is an issue with single people being trapped in the private rented sector.
I am glad that the Senator raised the issue of rent, which is of huge concern to Threshold. It is important that affordability in the rental sector is addressed. We have seen a commitment from Government to the introduction of affordable rental housing. We have yet to see any detail as to what that will be. There is no question or doubt that we increasingly see people come in who are in jobs and are seriously at risk of homelessness because they cannot afford to put a roof over their heads. That has to be addressed. We also want to see effective implementation of the rent pressure zone legislation. We have made numerous proposals to the Government about this. That has to work effectively if we are to have any possibility whatsoever, in a market where we will not see adequate supply for a period, of making sure that people are not forced into positions where they go without food and necessities to pay rent.
I welcome everyone. We have a housing crisis. Rented properties are a massive issue. We have a lack of supply. We are trying to bring in a system to help people. There are cases in my area where landlords will not take housing assistance payment, HAP. They take cash. Since we have a lack of supply, we force people, since they cannot find proper accommodation, into homes where the landlord will not take the HAP. Mr. Michael Walsh said that it should be getting better with current rental policies. I do not see it because there is no joined-up thinking between organisations, and we have a dilemma.
The figures here relate to funding to local authorities for inspections. Since 2004, the Residential Tenancies Board, RTB, has been providing funding for local authorities through the Minister for Housing, Planning and Local Government. There is over €34.5 million, with €1.7 million provided in 2017. There are 31 local authorities. I ask for the facts, figures and breakdowns of who got what and what accountability there is for every local authority. How many inspections and enforcement proceedings happened? There were none. I do not blame anyone here for this but the biggest issue is staffing. Most local authorities are under much pressure with staffing. I hate the summer because every time the summer comes, through no fault of the local authorities, if someone is on holiday, they are lucky to get someone who will do that work as well as their own. They could be trying to do three jobs and they do a great job. I am not blaming the local authority staff. We have excellent staff. It is a problem across all 31 local authorities. I can speak for my own local authority in Carlow. It is understaffed. Can we have accountability in respect of that money? I see that provision has been made for allocation of €2.5 million in 2018 with further increases proposed up to 2021. The Department issued a letter to all the local authorities on 5 February. The letter set out annual targets and requests each local authority to prepare an implementation plan to achieve this, including staffing, resource and other needs. Will the witnesses be accountable about this? Will every local authority come back to them? I understand that each local authority is different, gets different funding, has a different system and has its own book relating to tenants and private landlords. I know that the Minister, Deputy Eoghan Murphy, is having a summit relating to-----
None of were asked so I will let that go. We have all 31 chief executives - I would always call them county managers - there. Can we not all work together on a plan? I have only learned all of this since I have come to these meetings. Dublin is able to say that its policies are different and Waterford's policies are different. If policies are not similar, the only ones who lose out are the tenants and the people in private rented accommodation. What was the outcome of the letter that was sent to all the local authorities? What different issue faces every local authority? Can we have a breakdown of the €34.5 million and €1.7 million provided to the local authorities in 2017?
I am concerned about the rental accommodation scheme, RAS. It is an issue since people are taken off the housing lists and it is deemed that they have a house, yet repairs need to be done. This goes back to every local authority. Activity in respect of my local authority's repair system, whether for dampness or another issue, is very low. Other local authorities do much more work than some. That is not acceptable. The witnesses should get together and have a scheme for all local authorities, whether to fix dampness, a cooker, a fireplace, windows or doors. These are all issues for which local authorities state they do not have funding. Some local authorities are doing it and others are not. That is unfair because in the end, everybody pays the rent. It is the same throughout the country. The cap is €150 to €180. The highest earner pays, whatever the number in the house. The proper money is paid across the country, through the local authorities. We need to look at that. Could the witnesses get a system together and work on joined up thinking?
We spoke about the NCT. It is probably a matter of wording. There needs to be a proper NCT for private rentals. I come across cases relating to private rental not working. Rent pressure zones were introduced recently and I asked the Minister many times how can he expect a rent pressure zone to work when he will not bring it in to every local authority, that is, when neighbouring local authorities have it while others do not? Every local authority should have this. We have none in Carlow. Wicklow, our neighbouring county, has it. That does not make sense and it is unfair on the local authorities that do not qualify for it. I do not understand, when we are in a housing crisis and are told that we need to do things urgently, why the Minister will not bring it in across the 31 local authorities. He says we have to go back to look at phase 2. Some local authorities did not qualify under phase 1, so he has to look at phase 2. He cannot guarantee if the other local authorities will qualify.
That is unacceptable. I am not blaming the witnesses but there must be a joined-up approach and every local authority must get its fair share of funding. I acknowledge they cannot compete with the cities such as Dublin and Waterford but the smaller local authorities need to be looked after. That is where we are failing. I firmly believe that the biggest issue we have is the lack of supply. The rent pressure zones are not working. We need accountability in housing. We have good landlords - there is no point in saying otherwise - and we cannot categorise every landlord as not being good, but we need a balance. I have been to several houses on which landlords need to do work and they are just not doing it. I get on to the council and the council says that is not its remit. We need to look at enforcement and legislation. The biggest issue is staffing. It is a massive issue. I could talk all day about housing and local authorities, but perhaps the witnesses could come back to me on the points I have raised. Figures are important to me in order that I can justify where this money is after going, what it is spent on, where it was spent and what difference it made to people's lives.
I do not want to get into rental pressure zones because the matter is not on the agenda for today but I would appreciate it if the witnesses could answer the questions Senator Murnane O'Connor asked, specifically those concerning today's topic.
Mr. Paul Dunne:
The Senator mentioned landlords not accepting HAP tenants. That is a breach of equality legislation, so there should be a remedy there for people. I just wanted to put that on the record.
Regarding our expenditure and where it goes, we are going through a process at present of validating with each local authority the inspections it carried out for 2017, on which we will make payments. As we probably will have that finished by the end of the month, we will be able to give the Senator a copy of the number of inspections per local authority.
Mr. Paul Dunne:
This raises a point Deputy Ó Broin made about data that I did not pick up on. We must do a lot of work on data and find out exactly what is going on with the private rented sector. We will work on the quarterly return we get from local authorities to expand it. We try to look at a system of minor non-compliances and major non-compliances so we will have better information to influence our policy decisions.
Mr. Neil Maher:
We rolled out the implementation plans on 5 February or 2 February or whatever date it was. We have all the plans in now so we are going through them and will sit down with each local authority. The plans set out specific targets for each local authority to reach the 25% target by 2021. Obviously, each implementation plan we have is different but, generally speaking, team-wise, resources are the major issue. We are coming from a situation whereby local authorities were very badly hit by the recession and lost 25% of their workforce. The reality is that it has taken time to start escalating that back. As a Department, we are supportive of any sanction requests we get from local authorities. They are starting to come in now. I refer to the inspectorate function. That implementation process is very much in train and complements the other processes we are carrying out around streamlining training, for example, as I said earlier. We will have a programme rolled out and standardisation of the application of the regulations and guidelines. This will effectively bring all the inspectorate teams together across a number of programmes in order that out of that, it is hoped, they will also develop a network and we will have a consistency in application of the regulations and guidelines. There are many things going on that are starting to make a difference. Even last year, the indications are that inspection figures were up 4,000 on the previous year. We want to move things forward more quickly, but the changes being made are starting to take effect. I think those are the main issues the Senator raised.
Mr. Michael Walsh:
The joined-up approach is the very essence of what we are trying to achieve through the working groups the Department has set up. Separately, the CCMA housing committee has a number of subgroups that are working to try to join up some of these animals but specifically the private rental standards. The Senator says it is unacceptable that there are different standards in different local authorities. I agree with her only in the sense that we should all seek to meet the minimum rental standards. After that, it is an essential part of local democracy that the budgets be set locally and that there be different cultures and traditions surrounding housing generally across different local authorities. There should be scope within the overall regime. The local authorities are independent corporate entities and in terms of local democracy some element of flexibility is needed but the simple reality is that by law, we must meet minimum rental standards.
Ms Rosalind Carroll:
I wish to clarify the figure of €34 million. The money that goes out every year, and which we are directed to distribute by the Minister, is based on the number of inspections, so the more inspections a local authority does, the more money it gets. The amount of money is therefore a reflection on the number of inspections, not the other way around.
Dr. Aideen Hayden:
The Senator mentioned the issue of HAP, cash payments and so on. Whether it be HAP or rent supplement, paying under the counter and topping up has been a feature for low-income tenants for decades. Obviously, where there is a significant shortage of supply, the pressure on tenants is even greater than when there is more property on the market. I ask Mr. McCafferty, who works on the front line, to add to that.
Mr. John-Mark McCafferty:
HAP refusals are a continued concern for us. The issue comes through in our client case work and has been evidenced in recent weeks by the Irish Human Rights and Equality Commission report. Our advisers are working on it on an ongoing basis. Clearly, where there is, as Dr. Hayden pointed out, such a reliance on the provision of de facto social housing through HAP and other supports, the importance of access and retention within the private rented sector through something like HAP and the importance of it working are real concerns where there are landlords in the current market with limited supply saying they are picking and choosing. This can be challenged through existing legislation.
I wish to say one word about energy efficiency. There is a relatively low baseline in terms of energy efficiency and there is a way to go. As we approach higher levels of energy efficiency - points were raised about intensification and there being more people per housing unit - the issue of damp is coming to the fore more and more. I think it is seen in the likes of Scandinavia. We need to monitor and work proactively on it.
It is important that the partnership we are talking about extends beyond this morning and to an ongoing structured liaison with the local authorities, the Department, the RTB and organisations such as ours on issues of standards raised this morning.
I will make a few comments before we go back for a second round. I thank all the witnesses for their presentations. My comments do not reflect on anyone; it is just the situation we are in at present. We must admit that the current system is not fit for purpose and that something radical needs to happen in respect of the rental market. When I talk about the rental market, I do not just mean the private market; I mean the public side of it as well. One of the disadvantages of this is that the biggest landlord, namely, the State is itself, is outside the regime. It needs to be brought into whatever the future regime will be. The NCT system as a model has been mentioned and is thrown out there a lot. When it was mentioned years ago in the context of the motor trade, it was said it probably was not workable and could not happen. It is now becoming an acceptable part of life, and we now have just over 2 million vehicles registered in Ireland that must go through an NCT system.
We also introduced the building energy rating system, BER, which is now a standard part of life. These things can be done. I agree that it takes time and that resources must be put behind it.
An inspection system would have two different aspects, one of which would be the physical structure of the building and whether the layout, ventilation, fire alarms and so on complied with the regulations. This would a physical inspection that could be carried out. This should be done regularly and no new tenancies should be signed up without that inspection being done. That should be the starting point and it should then be reviewed every so often. Critically, an unannounced inspection regime should also be brought in. We should target 20% to 25% of all properties with unannounced inspections to deal with overcrowding, equipment not being in place and issues around damp. This would be an holistic approach, but with two different systems. It can be done if the will is there to do it. As a society it needs to be done. Social and local authority housing has to be brought into the system but would a local authority inspect itself by being its own inspector? Would we rely on the private sector to do this? Would we rely on the Residential Tenancies Board? In fairness, it would not be very hard for the local authorities to inspect themselves and maybe another approach needs to be taken in how we do it. We must, however, achieve an NCT-style system where the physical structure of the building is inspected before anybody can occupy it, and then we need a target of 20% to 25% of unannounced inspections annually on rental properties, which would deal with day-to-day issues of overcrowding, damp and lack of equipment. These are just a few issues I wanted to raise, and if anyone would like to come back in, they are more than welcome.
It is important that we work with up-to-date data. The difficulty with the data on the Department's website is that the most up-to-date data on the private rental figures is 2013-2014. If there are more up-to-date data, perhaps the Department could forward them on. I assume that the most up-to-date data are the National Oversight and Audit Commission, NOAC, annual performance and indicator reports. If there are other sources that we do not know about, maybe the witnesses would let the committee know because it saves them having to give it to us.
With regard to the rent issue, as raised by Mr. Walsh, the most up-to-date figures from one of the NOAC reports tell us that rental income during 2014 across the local authorities was €348 million. The costs of maintenance, rent administration and the community function was almost €297 million. The Waterford local authority had rental income of €11 million but the maintenance and administration was €7.1 million. Clearly there is money there. I am not saying that the €6 million spent in 2014 was sufficient, and perhaps the Waterford local authority would have wanted to spend more if it had had it. Is it a problem that rents are being diverted to other areas of local government expenditure or is it that rents could not cover the level of maintenance that is required? I ask this in order for us to understand the issue properly.
Mr. Michael Walsh:
It is a complex question to answer. I will refer to the situation in my area. In general terms and keeping it very simple, the housing function plus central management as the overhead of the organisation and the maintenance function is generally managed in the overall budget. There are other areas such as community services where there is a significant imposition of costs, with much of it focused on local authority estates and otherwise where there is expenditure.
We are looking at resources overall. The answer to the Deputy's question will, in some respects, come from the inspection system. We must have a standardised inspection system. I take the point about local authorities conducting inspections, but regardless of who does it, the inspection system must be standardised and uniform in the private rental and the public rental sector. As an indictor, that cost comes in at around €150 per inspection contracted out. It is not an insignificant amount when applied to 130,000 or 135,000 houses. It needs to be done nonetheless because ultimately it is all about information and data. If that inspection regime were in place now, one could start assigning costs to remediation of the issues that have been identified. Resources are not that bad in the space but we would need to be able to prove that, and one of the problems is that post Celtic tiger and post recession, we have been forced through a diminution of resources into reactive maintenance and so on. The optimum scenario is to have a planned maintenance regime that people clearly understand that is targeted to achieve the minimum rental standards.
All of that is very positive but my core question is, on the basis of the NOAC report, when maintenance, rent administration and the community functions are added together, the total cost for all the local authorities is still less than the total rent that is collected. Is rental income being diverted into other areas of service delivery or is all the rental income remaining within the housing function, especially the maintenance, administration and estate management functions?
Mr. Michael Walsh:
In my own case there is a small diversion into other areas. This has been forced by the general financial situation. The simple reality is that post 2008, the sum of the income has declined significantly and it is a question of trying to manage the overall income base annually. That is the reality.
The NCT is one of the best systems we have and it makes a lot of sense. It is very simple. In a few simple words, how do we progress NCT-style rental property inspections from here? The Department has said that it is anxious and that it is keen to look at it, but we need stronger commitments than that. These proceedings are televised and many people who are involved in social and affordable housing, the rental sector and tenancies tune in to these and they are very interested in engaging with these meetings, albeit externally. How can we go from this room today and progress the issue? We all know the problems. Everyone is talking about the problems. Nobody is saying that there is not an issue or a problem, but I am interested in hearing from the County and City Management Association, because its members are at the coalface of the problem, about the NCT-style inspections. I would also like to hear from the Department and from Dr. Aideen Hayden of Threshold on what they would like to see in place with regard to rolling out the NCT-style inspections.
Dr. Aideen Hayden:
We would see such a system rolling out over a period of years. An NCT-style inspection certificate for a property could be valid for a period of years, as with the car NCT certificate. Deputy Ó Broin raised an interesting point that it could be done over a period of years through the local authority inspection programme if it could be guaranteed to reach all rented properties over a period of time. We would not be remotely prescriptive on that.
Threshold has done some work, through a subcommittee of Dublin City Council and with the Royal Institute of the Architects of Ireland. A report was produced for the housing strategic policy committee in the council. One of the proposals was that the current requirement for a BER certificate for all rented properties could be expanded very simply to include minimum standards and, as illustrated by the "RTÉ Investigates" Nightmare to Let programme and issues such as overcrowding, it would include requirements for fire safety.
Rather than a BER certificate, there would be a combined certificate which covered all the areas with which the landlord was required to comply. We believe that certificate should be valid for a specified period, unless something happened. It would be similar to how if one has a car crash and the vehicle is wreck, a national car test, NCT, certificate does not remain valid to put it back on the road. If something comes in the way, such as some sort of significant damage, the certificate would cease to be valid.
Prima facie, if one has a certificate, it is valid for a period, it is displayed on the wall of the rented property and can be seen by a prospective tenant to the effect that the property complies with minimum standards. It might be signed by a local authority, or there could be a list of qualified persons who could provide a certificate of compliance similar to when a property is surveyed for conveyancing purposes. That would be attached to any tenancy registered with the Residential Tenancies Board, RTB. When the landlord puts in his or her registration details, ideally at the same time as lodging his or her deposit, although a deposit protection scheme might be an issue for another day, he or she would also lodge a copy of the certificate or the certificate number which goes with the registration. That would provide evidence that the property had been sufficiently inspected and had the certificate of compliance.
People cannot be expected to do this overnight, but as the bedsit ban was rolled out over four years, we think four years would be a reasonable period to roll this out. This could be cost neutral for a landlord. There is no reason it should cost significantly more than a BER certificate. It ought to be tax deductible similar to other costs and expenses. There is no reason a reasonable landlord should regard it as an additional imposition.
Mr. Michael Walsh:
I am not entirely sure what is intended here. Cost is the issue that concerns me but we are happy to explore it. We want to get to a standardised inspection regime that is recorded through IT. It should not be that difficult ultimately to transition that into a certificate. The question is how we get there. We argue with the Department about the cost of inspections which we say cost us €150 to €200.
The Vice Chairman referred to unannounced inspections. They are nearly impossible. One will be knocking on a door with no one there to open it. Our difficulty is that it is desperately resource intensive in trying to get access and get around the place. Neither is it only the inspections, as they lead to further work, whether it is issuing a certificate or otherwise. If I recall correctly, there are more than 300,000 rental properties. If each costs a couple of hundred euro to inspect, that is a total cost of €60 million that must come from somewhere.
Ms Rosalind Carroll:
To return to the NCT-type certificate, the RTB is very concerned about standards and is supportive of change around them. It is probably supportive of the idea of certification. We must look holistically across what we are doing in the rental sector. We are in the middle of looking at legislative change in rent pressure zones, sanctions and registrations, and we need to factor in everything in the sector. One cannot deal with one aspect alone at any time. We have 340,000 tenancies and 174,000 landlords. Dr. Hayden spoke about bringing it in over several years. For certainty in the market, there should be a clear idea of where we are going, what we are doing and when things will be brought in. Speaking to the stakeholders with whom I work, they feel that considerable surprise is brought upon them, along with the number of properties contracted last year for the first time in several years, which worries me. It might seem like a cost but sometimes it is what can come across as very anti-landlord rhetoric. We have all said here that we are discussing a small minority. We need to ensure that we are doing this in way that is supportive to the sector and in such a way that landlords can deliver and comply.
We must also acknowledge that there is a huge lack of knowledge. Both I and Ms Fogarty spend a lot of time with stakeholders trying to give them information and education. Most landlords do not know the standards. They do not know that they had to bring in window restrictors or that they need to install carbon monoxide detectors. We have to start with basics.
There is much focus on the property but behind every property is a landlord and a tenant which is why we are focusing on a landlord accreditation scheme. The NCT-type scheme needs to come in under that. We have looked at models in Wales, for instance, where there is an accreditation scheme which is all about the landlord. If the landlord does not comply with the standards, he or she does not get a licence. It is not about the property, but about the landlord. Without that licence they cannot act as a landlord to the property. They must give it to an agent or someone else who must be accredited.
To answer the Senator's question, we must go away and map out how this will work along with the other things we are introducing. We need to look at legislative change. Dr. Hayden says that it would come in and the RTB could do something but we could not do anything without legislative change. If an NCT-type scheme were introduced, we would also have to go back and consider the Act which regulates the RTB. It is a complicated framework but we are very supportive of getting to the right place.
While I do not disagree with most of what Ms Carroll said, there has been nothing in the discussion that could be construed as anti-landlord. In fact, having a strong NCT-type system is good for compliant landlords because it prevents what we hope is the majority of compliant landlords being undercut by rogue traders. We had this type of conversation with the Irish Property Owners Association the previous day. They came in assuming that the committee was anti-landlord when we are not. Like everybody else, we are looking to find the right balance. I would say that we are expecting two pieces of legislative reform from the Minister, so part of the reason we are having these conversations is for precisely the reason Ms Carroll mentioned, namely, to ensure that what is in those legislative packages assists us all in achieving it.
While I know that Ms Carroll was not saying that any of us were being anti-landlord, behind every non-compliance is a tenant who is left to try to police that by taking cases to the RTB. It is important that we get that balance.
Ms Rosalind Carroll:
Sorry, I did not try to infer that. What I mean is that what emerges from all our discussions, whether here or elsewhere and often when it is in the media, can be construed in that way. I spend a lot of time with stakeholders who feel that, whether it is right or wrong. We need to find a way to ensure that they see the NCT-type scheme referred to as a support, something that they can deliver over a period, and to which we bring some certainty. The Deputy is right and I did not want to make inferences on the committee, so I apologise.
Mr. John-Mark McCafferty:
In response to Senator Victor Boyhan's remarks about where we go from here, we are very clear about the policy we should adopt, so it is a question of the process. We are keen to engage with policymakers, local authorities, the Department and the RTB on this and would welcome any further engagements, both inside or outside of the Oireachtas, to progress the matter of standards.
Dr. Aideen Hayden:
I take Ms Carroll's point. The system of landlord accreditation in Wales put a much heavier burden on landlords and a much greater onus on them than any ten NCT-type certificates. It requires them to receive training and education along the lines of continuing professional development.
I do not see members of the Irish Property Owners Association, IPOA, jumping up and down welcoming that one.
Through the NCT system, all we are doing is asking landlords to comply, not with additional burdens, but with what they are already required to do. There is no additionality. As Mr. McCafferty said, we are making it easier for the bulk of landlords who, as we are well aware, are compliant. Threshold is just as concerned about the loss of small-scale landlords in the system as anyone else. It is our tenants who are most at risk of small landlords leaving the private rented sector. Real estate investment trusts, REITs, and institutional investors do not want our tenants - low-income tenants on State supports like HAP. They are coming into the market at the top end and are not interested. I am not here to defend landlords but those trusts and investors are getting preferable tax treatment under the current system.
I am not suggesting we impose greater obligations on compliant landlords. I am simply saying there is a system with which people are supposed to be complying. All we are asking them to do is pay more or less the same money they are paying at the moment, which they can use to reduce their taxes, to get a certificate that says they are complying. This will maker it easier for local authorities, the RTB when it gets its enhanced powers, and the Department to identify those who are not complying, because that is the bottom line.
I thank Dr. Hayden. We all have a common objective in this regard. We might differ on how to achieve it but we all agree that something needs to happen. I thank the witnesses for attending and engaging with the committee.
At the committee's next meeting, we will review the role and remuneration of elected members of local authorities. There will be less money for housing when we do that for them.