Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

A strong and viable private rental sector can play an important role in the housing market and our wider economy. It can provide a housing option to those who either cannot or choose not to enter the owner-occupied market but still have sufficient means to meet their own accommodation needs. It can provide a housing option to meet increasing demand and it can promote flexibility and better alignment to a more mobile labour market, making it easier for individuals and families to pursue job opportunities or adapt their accommodation to changing family circumstances. It can also reduce the macroeconomic risks of an over reliance on home ownership. We have witnessed examples over the past decade where states with relatively large private rented sectors such as Germany and Switzerland were better insulated against housing booms than states with small rented sectors such as Ireland and Spain. Indeed, the rental sector in Ireland has traditionally been regarded as a residual sector in which households who would prefer either to own their own home privately or access permanent social housing must serve time on their way to their true tenure of choice.

The rental sector in Ireland has doubled in size over the past two decades. Almost one fifth of the population now lives in the rental sector. Growth in the sector has been driven by a range of factors, including a reducing reliance on home ownership as a tenure of choice, as well as demographic factors, including inward migration from the EU and decreasing household size increasing rates of new household formation. Notwithstanding this, the rental sector in Ireland still needs to develop and mature to provide a viable sustainable and attractive alternative to home ownership rather than serving as a temporary refuge or a staging post. Severe supply pressures, increasing rents, security of tenure issues, limited but nonetheless unacceptable examples of poor accommodation standards and a shortage of professional institutional landlords are impediments to delivering on a strong, stable and modem rental sector that offers choice for individuals and households while contributing to economic growth.

There have been some improvements. Important amendments to the Residential Tenancies Act introduced last year mean that the minimum period between rent reviews for tenancies has increased from 12 to 24 months. This will apply for a four-year period, until 2019. In addition, the minimum period of notice of new rent is increased from 28 days to 90 days and longer notice periods for the termination of long-term tenancies have been introduced. However, acute pressures persist in the rental market. These pressures are driven by a number of factors, including increasing demand, a fundamental lack of supply and high costs that indebted landlords face in servicing their loans. There is no doubt that the problems in the rental sector are part of a bigger problem. Ireland is in the midst of a housing crisis and the problems caused by high rents reflect, and are reflected in, the other issues facing the housing market, including insufficient homes for first-time buyers, increased demand for social housing and unacceptable levels of homelessness. While many factors contribute to these problems, the one factor common to all of them is the prolonged and chronic lack of supply of new houses.

The core issue behind almost all of the pressures throughout the housing market is a lack of supply. Ultimately, the most effective way to reduce and stabilise rents in the medium to long term and benefit the entire sector is to increase supply and accelerate delivery of housing for the private and social rented sectors. In publishing Rebuilding Ireland, the Government has set out a practical and readily implementable set of actions to create a functioning and sustainable housing system. However, I acknowledge that it will take some time for supply and demand to reach equilibrium. In the meantime, however, it is essential that measures taken to address rental prices do not jeopardise supply. While I appreciate the motivation behind the Bill, it does not contain any mitigating measures to protect supply and, therefore, it is likely that it would have a negative effect on both existing and future supply of rental accommodation. Without counterbalancing measures, there is a risk that the measures proposed in the Bill would force existing supply to exit the market and discourage future supply for the sector.

That is why Rebuilding Ireland commits to developing a real and meaningful strategy for the rental sector, with a major focus on supply but also including new mechanisms for both setting and reviewing rents, and we are committed to that. Every political party, members of the public and stakeholders in the rental sector have had an opportunity to contribute in writing to the rental strategy, which I will launch in a fortnight. Many Members, including Deputy Ó Broin who also attended and contributed to the consultation day, have done so. I accept his is a detailed submission. I will launch the rental strategy in a fortnight and it will set out a realistic targeted plan for dealing with the many serious issues that we are discussing.

Fianna Fáil has tabled a detailed amendment to the Bill, for which it is seeking support. We have also tabled an amendment to be voted on tomorrow.

There is much in the Fianna Fáil motion that I am comfortable with but I do not want to commit to that kind of detail until we launch our own strategy. We will not oppose the counter motion but we will abstain on it.

From my perspective, I have made my position very clear on this issue since the summer. What I said was that after a consultation process, we would launch a new rental strategy before the end of the year. We will do that. I appreciate the pressure that the Deputy needs to keep me under to make sure we deliver on promises. I accept this Bill is an effort at continuing to raise the issue of rent certainty. Deputy Ó Broin knows I cannot support a Bill two weeks before we launch a comprehensive strategy which will perhaps be given legal effect by legislation that is about to come into the Dáil in terms of the Planning and Development (Housing) and Residential Tenancies Bill. If we are going to introduce measures, we have an opportunity to do that and I hope the Deputy will help us. I cannot accept a Bill that is essentially a one-sided argument albeit dealing with a very genuine issue. We need to have a balanced approach to protecting tenants because without landlords we do not have a functioning rental market. We need to do both and that is what we will endeavour to do before the end of the year.

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