Mick Wallace (Wexford, Independent) | Oireachtas source

Deputy Curran made the point that the average two-bedroom unit in Dublin city costs €1,500 per month to rent. He said that the 4% increase will amount to €60 per month. He was pointing out that a tenant would have to earn an additional €1,500 per year in order to pay that €60, which means that he or she will have to earn close to €5,000 extra after three years in order to deal with the rent increases that this Government is facilitating. We are creating an upward-only rent structure. It is not that long since we were in here going mad and asking why the State could not do something about the fact that upward-only rents in the commercial sector were driving people out of business. Upward-only rents in the residential sector will drive people out of their homes. That is what will happen.

The Government is not going to solve the housing crisis with the policies is has brought forward in recent months or the past few years. I am sorry but I am convinced that it will not happen. The point about the 4% increase is that it is a bit like what was said in respect of the Central Bank when it reduced the deposit requirement to 10%, namely, that it was great because people, particularly young families, would be able to get loans.. The question we must ask is: 10% of what? The prices went up on the night that the Central Bank reduced the deposit requirement from 20% to 10%. The starting figure is too high. The starting figure on the rents is also too high. The whole structure of it is nuts.

I will conclude with some lovely quotes from an interesting individual who has become very wealthy. He originally worked for NAMA and, very interestingly, he gained from the whole process. We will be bringing more information to the Chamber on this in the new year in order to provide greater clarity. Mr. Kevin Nowlan of Hibernia REIT plc had a bit of a go at the Government recently. I thought he was a bit harsh, given that he has done so well out of Government policies and, in particular, his time with NAMA. He was speaking at a real estate stakeholders Brexit summit where he called for an end to the blanket requirement for dual-aspect apartments. Is that not interesting? He does not want dual-aspect apartments. According to a recent article in Irish Independent, Mr. Nowlan also called for the introduction of a wider range of apartment sizes to cater for the differing demands of renters and owner occupiers. The article states:

Laying the blame for the deepening housing crisis on the State, he said: "There's some very simple things that could be done but for some reason our local authorities have a difficulty in understanding the difference between rental stock and apartments that people live in. They're different.

"In Ireland, local authorities think there are only one-bed, two-bed and three-bed apartments and that's it.

"If you go to the UK, you'll see the different asset classes they have in terms of flats. They understand it's about usage, about occupancy levels and what people need those units for.

Citing the example of workers in Dublin's docklands, Mr. Nowlan added, "The majority of people who want to live in our docks are generally younger people who don't spend a lot of time in their apartments.

God help us if they were to sell them on to someone who might want to live in them. The article continues:

"They don't need to be protected by dual aspect and 80 sq m floor areas because they don't spend a lot of time there. We need to understand this and get a little more sophisticated with our residential [planning regulations]."

I would not be able to make that up. He went on to state there was an "amazing, huge amount of demand for rental stock". Government, planners and local authorities have been "unable to engage" with the issue of rent affordability. He further stated:

If you look at London, I can build a two-bed apartment and it has to be 61 sq m; in Dublin, it's around 80 sq. m. In London, I don't pay any VAT on construction; it's zero rated. And in London, the affordability criteria for what people can afford to rent is higher. [Is that not great?] So these are the issues we're dealing with.

Mr. Nowlan said changes need to be made to the dual aspect requirement for apartments and that floor area sizes would need to be made "more consistent". He said the VAT rate on construction would also have to fall to allow for the creation of a stock of "well-managed residential apartment blocks". God knows we have a lot of them, now that the REITs control so many of them. I am sure they are well managed but it is a pity we cannot afford them. He further stated:

The organisations are there to do it now, I-RES is there, we're interested in it and the pension funds, they won't deliver it, but an organisation like Hibernia could deliver them on and sell them on after making a profit.

I believe him. I would say he is dead right.

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