Clare Daly (Dublin North, United Left) | Oireachtas source

Yes, but I think we are discussing my amendment - amendment No. 3 to Seanad amendment No. 47. I tried to ask the Ceann Comhairle. The way this is done is head-melting, but I think this is right. Unfortunately, I have a large number of amendments and I am working my way through them in this section. It is very difficult. Amendment No. 3 to Seanad amendment No. 47 belongs to the Socialist Party, but it is linked with my amendment, amendment No. 5 to the same amendment, and amendment No. 4. These three amendments to Seanad amendment No. 47 all try to get rid of the self-destruct clause the Government has placed in this legislation. The clause says that the measure around rents can only be reviewed and increased every two years instead of every year and that it will cease to have effect in four years time. This grouping of Dáil amendments deals with that issue.

I am aware that he other Deputies from the Socialist Party have taken a different interpretation of this, namely, to delete this section in its entirety. I seek to do something that is slightly different. I believe the idea of a self-destruct clause is ridiculous. Why is it four years? Why not three, two or one and a half years? It does not make any sense. While deleting subsection (5) is one way of dealing with it, what I am proposing instead is to put forward a review of these measures in four years time. I would be happier if this review took place in a year's time, but if this amendment is passed, we will go with four instead of one.

The review proposed in the amendment creates the possibility that the next government will review these measures and possibly decide that they are not good enough and do not go far enough. The amendment specifically provides for this as any review must be carried out with a view to the housing situation in the country at the time, the social good and the principle of housing as a human right - none of which seem to have been considered by the Seanad amendment. While deleting the subsection entirely is one approach, I believe a review in the hope of enshrining the principle that the rental market and the housing market as a whole should be subjected to serious and regular oversight by the Oireachtas is not a bad thing. It should be comprehensive and bound up with the social good, which is what my amendment seeks to do. It is a bit rich that the Government inserts a self-destruct clause and comes up with a random four-year idea. It is completely meaningless and insulting to the Oireachtas because it is an outgoing Government. The next Administration will decide whether the legislation stays in place. I hope the next Government will abolish it and start again from scratch, but there does not seem to be any sense in this.

Amendment No. 6 to Seanad amendment No. 47 would make it impossible to raise the rent during a tenancy above the rate of inflation or 5%, whichever is lower. The figures used are based on the practice in Germany, which is widely seen as one of the most tenant favourable countries in the world. There are two types of rental contract in Germany - index rental contracts and stepped rental contracts. Index rental contracts are linked to inflation while stepped rental contracts allow for a certain percentage increase each year up to a maximum of 20% over three years in some parts of Germany and 15% over three years in other parts where there might be more rental demand. This amendment seeks to combine both approaches. It would mean that rents could not increase above inflation and that if it ever came to pass that inflation sky-rocketed, rental increases would be controlled to below 5%.

Ireland has had inflation of negative value since 2014, but at the beginning of the last quarter, annual inflation in terms of rents stood at 9.3% nationally and was 15% in Dublin in mid-2014. It is now 13.5% higher than a year ago. It is 12.2% in Cork city, while it stands at over 11% and 9% in Galway, Limerick and Waterford. Rent increases and increases in wages are wildly out of sync. A couple earning €42,000 per year who want to rent a three-bedroom house in Dublin will have to spend 47% of their after-tax income on rent at current prices. The situation is completely unsustainable. This is a couple on €42,000 who are probably doing better than many others. We need more than rent certainty; we need rents to be controlled.

We have all heard the stories of landlords upping the rent by phenomenal amounts, 20% and more, in a short space of time and saying to tenants that if they do not like it, they can move out. This is obviously contributing to homelessness, causing huge social disconnection for families, with children having to move schools and so on. In 2014 the report of the Private Residential Tenancies Board, PRTB, on rent stability in the private rental sector stated rent controls would destroy supply, something which has been echoed by various Government spokespeople since. There is, however, a very curious line in the report, explaining why, in its view, rent controls would do this. It states the difference between the control price and the market price is essentially a subsidy for consumers and that, therefore, consumers demand more of the product than is necessary. I have never heard anything like it for ludicrousness, that rent controls will lead to decreased supply because tenants will get greedy and start to want to rent more properties than they need. That is obviously utterly ludicrous and completely against the notion of housing as a human right. We know also that huge rent increases mid-tenancy have knock-on effects on the alleged market rate, that landlords can point to comparable properties nearby which command higher rents thanks to huge mid-tenancy increases and that they can start a new tenancy at an upper limit. This will not do what it says on the tin and assist tenants in that regard.

In this group of amendments we have not pushed for the type of rent controls that have been introduced in Berlin where at the commencement of tenancies rents cannot be set higher than 10% of the local area average, but that is the direction in which we need to go. The amendment has been put forward as a modest gesture to which the Minister of State could not object. I do not see any reason why he would.

Rent controls are ultimately the only way forward. We need to take our complicated housing mess into account. We have a variety of landlords operating in the State, from the big real estate investment trusts, REITs and the professional landlords to the hard-pressed person who has an apartment, cannot sell it, is in negative equity, got married and moved to another place and is letting the apartment just to pay the mortgage and is not even succeeding in doing that. There are many buy-to-let properties in arrears, but the issue of the reluctant landlord needs to be addressed. I appreciate that it is not possible to address one aspect only and that there is a bigger picture, but we need more than is being done and the amendments would seek to help to do so.

The last group of my amendments to Seanad amendment No. 47, amendments Nos. 8 to 11, try to achieve the same thing. They seek to insert a retrospective clause into the rent certainty measures being discussed. Rents rose at the fastest rate since the boom in the months before the Government’s introduction of this measure. Due to the dithering and the public row in the media the Government has succeeded in making things worse for tenants with this legislation. This group of amendments seeks to fix this a little bit and make it such that increases that take place 60 days or less before the legislation comes into effect would be null and void. The Government’s strategy and the way it handled this issue were so bad that it could not be that incompetent and divided. It is hard to draw any conclusion other than that the dilly-dallying was deliberate to allow rogue landlords to drive up their prices and in a backdoor way to appease them. Sadly, the hard-pressed tenants are the ones who will pay the price for this. These are the most important of my amendments.

I have also tabled amendments to Seanad amendment No. 48 which also, unfortunately for me, are included in this group. They are generally of a more technical nature. The first seeks to inserts a provision that a landlord must make a statement to the effect that any rent increase mandated after a rent review is not more than the rate of inflation or 5%, whichever is lower. That would help to alleviate a dispute.

I may come back to some of the other amendments included in the group.

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