Paul Murphy (Dublin South West, Anti-Austerity Alliance) | Oireachtas source

We have had a hokey cokey on this legislation, which is posed as an amendment, all day. Now we have it. The debate was on and then off. The Dáil was a bit of a farce earlier on and was treated like a farce as Fine Gael and Fianna Fáil, behind the scenes, were trying to work things out. They have worked things out and we have the legislation before us which is almost exactly the same as what was presented yesterday, for all of Fianna Fáil's huffing and puffing. That is no surprise whatsoever because both parties, Fine Gael and Fianna Fáil, are landlord parties. Both parties represent the interests of landlords and not the interests of tenants. Both genuflect before the free market, including in housing, and are unwilling to tackle that free market. Both parties are unwilling to take the action necessary to deal with the crisis facing tenants.

All of that is and has been dressed up in the debate over the past few days and again today in a number of different ideas. One is the idea of balance, that there must be balance in this debate between the needs of tenants and landlords and that everyone must benefit from whatever legislation is passed. That was epitomised by Fianna Fáil's approach which attempted to doff the cap towards the needs of tenants by saying that it was in favour of a rent increase cap of 2% rather than 4%, something that was very quickly forgotten, and for extending the cap to other areas while in the same breath, the same statement and the same amendments, talking about the need for further tax incentives for landlords, one of the groups in our society that gets more tax incentives than anyone else apart from the major multinationals and those in the IFSC.

We reject that idea of balance. There is no balance in society between tenants and landlords. If one is a tenant right now, paying €1,500 per month and one is asked to pay €2,000 per month, if one does not have anywhere else to live or nothing else to fall back on, then one has no choice. There is not a balance in power between landlords and tenants. There is a complete imbalance of power, particularly as there is a shortage of supply, as the Government is fond of reminding us, and all of the cards are in the hands of landlords. When the State is not building houses which people can afford to live in, then people have very little choice. The relationship between tenants and landlords is the very opposite of balanced, economically.

There is no balance politically either. Mr. Tom Parlon, the Construction Industry Federation and the landlords organisations are able to get access to Ministers and to the Government. During the three month period of consultation that we heard about, how many tenants were spoken to? The reality is that the Government listens to the landlords. That is reflected in this House, where approximately one in four Deputies is a landlord, which is five times the rate among the general population. Landlords are represented in this House but tenants, for the most part, are not. The idea of balance is a joke because all of the power lies in the hands of landlords and that will continue to be the case.

The other idea used to justify the Government's approach and its unwillingness to introduce rent controls, which is what is needed, is that of supply. It is a trickle down theory of housing supply and of dealing with the housing crisis. The idea is that the Government must incentivise landlords and builders, via profit, in order for ordinary people to be able to access what should be a basic right - the right to a home. That finds its zenith in the discussion about landlords. The idea is that if the Government does not allow them to get an extra 4% per year, then they will go. The Government uses the same argument about Apple and many other companies. They make the case that Apple will leave and bring jobs with it but what are landlords going to do? Are they going to leave the country? Are they going to put their houses in their suitcases and take them out of the market? The houses are still going to be there. They are going to exist and people are going to live in them, unless the Government is saying that they will remain empty. It is another genuflection before the altar of the free market. The belief is that only by incentivising landlords and allowing them to maximise profit will they deliver. That belief has been a failure. This free market approach is the reason so many people are spending an average of 40% of their income on rent, which is completely unsustainable. It is the key factor driving people into homeless and it is why all of us are meeting people on a daily basis who are faced with rising rents which they simply cannot afford to pay, with wages that are nowhere near to keeping up with those rents and who are in crisis situations.

Let us look at what the Government is actually proposing, which is a 4% cap on rent increases. The Minister was on the radio this morning and was emphasising that the 4% figure was evidence based and that he did not just pluck it out of the sky. When asked what evidence it was based on, he just reached for a figure that was also four but it was a different figure. It was a figure for the amount of yield landlords would like to realise. We are talking about an increase in rent, right now, of 4% per year but this market is the most profitable for landlords in all of the European Union. We have the highest rental yield for buy to let properties in Europe at 6.54%. This market has been created because of the absence of governmental action to deal with the issue of supply, which means investment in building homes using funds from the National Asset Management Agency, NAMA, and the Ireland Strategic Investment Fund, ISIF. The absence of such investment and the absence of rent controls means that rents have gotten completely out of control. There has been a massive transfer of wealth in our society from workers who cannot afford it to landlords, from people with no property to those who have, in many cases, multiple properties. The result, as the CSO statistics show, is that profits on rents on dwellings rose from €1.6 billion in 2010 to €2.7 billion in 2015 - an additional €1.1 billion in profits going into the pocket of landlords. That is what they are getting now, at current rates. The Government and Fianna Fáil think it is okay, in the so-called rent pressure zones - forget about the rest of the country - for landlords to get an extra 12% over the course of the next three years. That will costs tenants in Dublin, for example, in the region of €4,000 and many will simply be unable to afford that.

There is no basis for the 4% figure. The Minister has not produced any basis for it, just as Fianna Fáil has not produced any basis for its 2% figure. It looked at the 4% figure and decided to go for something lower. There is no basis for setting a cap other than on the Consumer Price Index, CPI. There is no basis for anything other than linking rent increases to inflation which, right now, is 0%. We would also argue and have argued repeatedly that it should be backdated. Rents should be linked to the CPI and backdated to 2011, which was when rent was somewhat closer to being affordable for people.

The other main point I want to make relates to the other areas of the country that are not deemed to be rent pressure zones. As part of this deal between Fine Gael and Fianna Fáil, they have said that they are going to speed up the process of looking into naming other areas as being in need of rent control. What is that but a green light? A green light has already been signalled to landlords in all parts of the country, apart from Dublin and Cork, to get their rent increases in now. The two year rent review rule applies to some and that is fine but over the course of the next year, a lot of tenancies will be due a rent review and landlords will go for as much as they can possibly get from their tenants; they will jack up the rent as high as they can. That is the signal that has been given to landlords right across the country. What signal has been given to landlords in Limerick, Galway, Waterford and the commuter belts around Cork and Dublin? If tenancies are due for a rent review in the next month, what are those landlords going to do? They are going to increase the rent but not by 10% or 15% as they might have done prior to today. Now they are going to go for 20% or 25% because they fear that the 4% cap will kick in soon. That is what has happened here and that is what Fianna Fáil has contributed to.

There is an alternative. It is contained in the amendments we and others have put forward. It is that the Minister could immediately link the consumer price index, CPI, for the entire country and designate other areas, if that was the approach he intended to take, instead of doing very little. That is not even to mention the rest of the measures in the Minister's proposal, which go further in terms of the balance of power. In the context of landlords, for example, there is eviction for non-payment of rent and the absence of dealing with the key issue of eviction. Ignoring all that, however, there is the complete inadequacy of the 4% measure the Government and Fianna Fáil have signed up to as an honest reflection of their position. They are under pressure because this is the major crisis in society. They want to be seen to be doing something but even all that pressure has not changed their basic approach, which is to represent the interests of the landlords and dress it up in an ideology which states that as a result of landlords profiting, tenants will eventually benefit. All the evidence is that the latter is not the case.

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