Jan O'Sullivan (Limerick City, Labour) | Oireachtas source

I propose to take Questions Nos. 12 and 38 together.

The Government’s housing policy statement recognises that a balanced housing sector needs a strong and well-regulated private rented sector. In recent years improvements have been made, for example, in regard to security of tenure and the resolution of disputes. The Government recently approved the drafting of amendments to the Residential Tenancies (Amendment) (No. 2) Bill, including provisions for the establishment of a deposit protection scheme and for improved management of rental arrears cases.

The private rented sector is an increasingly important element of the housing market, with the proportion of households in the sector almost doubling in the period 2006 to 2011. Approximately one in five households are now renting their home in the private sector. Against this background, the growing evidence of increasing rents, particularly in Dublin, is a cause for concern. The most recently published data from the Private Residential Tenancies Board, PRTB, showed a year-on-year increase of 6.4% in the Dublin region to the end of September 2013. PRTB figures for the year ending December 2013 will shortly be published and are expected to show a continuation in this trend.

Nationally, the situation is complex, with data indicating that rents outside the Dublin region and the bigger cities are broadly stable while rents in cities other than Dublin are showing increases in the region of 4%. Meanwhile, ESRI data show that the consumer price index grew by only 0.5% in 2013 and is forecast to grow by 0.8% in 2014.

It is clearly a cause for concern that affordability issues are emerging in the private rented sector, given its importance to the overall housing mix. Accordingly, I have sought to stimulate a debate on how to bring greater stability to the sector, in the interest of tenants, landlords and society as a whole. Fundamentally, the situation in Dublin is a function of housing supply. In 2006, housing completions in Dublin had risen to 19,470, or some 21% of the national total of 93,419. In 2013, of the 8,301 houses built nationally, only 1,360, or just over 16%, were in Dublin. The reasons for this are complex and include the current market viability of developing new housing projects, having regard to the land acquisition, development and construction costs of bringing new houses and apartments to the market, combined with the issue of the availability of credit, both development finance and mortgage credit, and certain other factors.

The Government is taking steps to address these challenges in the property and construction sectors. These will include developing an overall strategic approach to housing supply, identifying and implementing relevant improvements in the planning process, and seeking to improve financing options for development and mortgage provision. Resolution of the housing supply situation is a key element in restoring stability to the market. I am conscious of the need to avoid introducing measures that might have unintended consequences on supply and affordability. Nevertheless, I believe there is scope to explore measures that would alleviate short-term difficulties pending a return to equilibrium in the market. Accordingly, I have asked the PRTB to carry out a focused piece of research that will explore options to address the difficulties being experienced in segments of the private rented sector and to report back to me with policy recommendations in that regard before the end of June.

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