Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

The amendments we are discussing in an the attempt to get rent control are like putting a sticking plaster on what has been a broken arm for some time; they are not a cure. We are not addressing the scale of the crisis we face.

Without wishing any disrespect to Deputies, many of whom I have listened to, the epicentre of the crisis is probably in Dublin Bay South. It affects every part of the country but the price of rental accommodation in my constituency is sometimes multiples of that elsewhere. It is almost an impossible place, if one is young, to consider living. It is creating a two-tier system. There are some who are working with certain companies who are able to live there because the company pays for it, but for an ordinary person who does not happen to be lucky to work for such an employer, Dublin 2, 4, 6 and 8 are now out of bounds and he or she must ship out and move a long distance away. It is a constituency where if one happens to inherit or have property, one is wealthy and will be wealthy in the future, but if one does not, one is excluded. It is a problem in Louth, Wicklow and Kildare, but it is a particular problem that we see in my constituency. It is exacerbated, as Deputy O'Dowd stated, by the fact that my constituency is where, by and large, Airbnb wants apartments. That has even heightened the crisis, in particular in my constituency.

I listened intently to the Minister and I was happy to read his statement. On the overall approach, he stated that we are making a three-year intervention with the view that afterwards the market will recover to something resembling an equilibrium and that the supply side we put in place will take hold. That is a real sign of the fundamental problem because we do not need to go back to the market-led approach that, as Deputy Wallace stated, we have been applying for the past three or four decades. It is not the right approach. We need to use the opportunity of this crisis to fundamentally change the way we provide housing in our country, particularly in this city. We have to change. We need radical reform, not the idea that, somehow or other, we will have a short-term intervention and go back to market equilibrium. Others have made a similar point. Professor P. J. Drudy, the Trinity College academic, put it well. He stated, "If we see housing as a commodity and rely on the market to meet our needs, then we're finished." Professor Drudy is right as is Deputy Wallace. It requires the State to start building because if we are chasing the tail of the market solving this problem, it will not do it. This is a short-term interventionist measure that will not address the fundamental problem and we will miss this opportunity.

I am disappointed that my party's amendments Nos. 7 and 8 have not been accepted because I think they would work. It was an attempt to achieve a slightly more holistic view that we should not be doing this with merely these limited measures. We should have been advancing the vacant site levy ahead of schedule and we should be changing the derelict site taxation laws. We should be introducing the likes of, as Deputy O'Dowd stated, a tax on vacant properties at the same time as rent controls. If we are serious, it might provide a holistic solution to the problem.

The Minister quoted the ESRI's recommendation that we must do this because one must incentivise the market, but the ESRI said, and I read in the newspapers today, that one also needs to introduce site value taxation. It cannot be all carrot and no stick.

There is no stick to push the supply side and deal with the developers who are sitting on vacant sites and not developing, such as the 38,000 planning permissions in Dún Laoghaire that have been mentioned. One of the reasons for the lack of confidence in these measures is that none of those other measures are included.

I can give another example, and all of this is connected. A Programme for a Partnership Government states, "... the new Government will introduce a new model of affordable rental by working with housing associations and local authorities to develop a 'cost rental' option for low-income families...". That is absolutely right. The Strategy for the Rental Sector published this week states that to progress the concept the Government will set up an expert group involving the RTB, the Housing Agency, NESC, the local authorities and the Irish Council for Social Housing to develop a cost rental model for the rental sector, addressing issues such as funding mechanisms. We know what that interdepartmental working group means. It is "Yes, Minister" talk for not now. It will report in the fourth quarter of 2017. Eight or nine months have already passed and a great deal of work has been done. We have been talking about this cost rental model for some time. It should be in this Bill. The Government should say it will do it, that it knows it will get the funding and that it will have to change the entire rental model. It is not just the private rental sector model that must change, the public rental sector model must also change. The mechanism has been outlined and the Government says it wants to do it, but now it is saying it will take another year to do another study before it will even think about it. The opportunity is lost. That will be a year in which we should be ramping up and building. If we are not doing that, we will miss this chance.

Members of the Irish Fiscal Advisory Council appeared before the budget advisory committee a few days ago. It was quite worrying to hear them say that it appears we are returning to the same conditions that created the housing and economic crisis we had seven or eight years ago. I believe they are right. Part of returning to those conditions is this obsession with market led development in housing, the pump priming we carry out, the tax breaks we still provide in the Finance Act and all the changes to the Central Bank rules. Bending over backwards to try to return to that market led housing model is creating the conditions, as the Fiscal Advisory Council said, that will create the same problem.

I listened to Deputy Ó Broin speak on the 4% proposal and how people will pay it. My concern is that it will require a 4% pay increase for everybody. The first thing a person will say, rightly, is that they will have to have a 4% pay increase. How else will they afford to pay that rent increase? Again, that is a return to the bubble conditions. That is the reason we have tabled amendment No. 64. The clever and smart economic strategy is to say "No" and restrict the rental increases to the consumer price index, CPI, which currently is low or zero. It is the way to keep inflation low and prevent us going down the route of losing our competitiveness and creating an inflationary environment, which is what is being done with this provision in terms of thinking that market prices should go up another 4% per year. It is an inflationary measure that will damage our economic model, as well as costing the people who have to pay it dearly. That is the reason we, along with other parties in the House, came to the conclusion that it should be linked to the CPI. It will prevent the bubble conditions building up again and try to keep the economy strong, instead of pump priming the wage increases that will naturally follow.

In terms of the measures in other areas, and I will not labour the point as other Members have spoken on this, we examined the site value proposal. In doing that we did some work with Ronan Lyons on examining how we would introduce it. It was very easy. He already had the models in place whereby one could look at local district property prices and rental levels. A range of different data can be modelled. It is not difficult with modelling on computers to get that type of data. I could not agree more with Deputy Daly. Her amendment No. 57 is absolutely sensible in terms of providing more data. I can see no objection to that as an example of how we could and should be using data quickly. It is available. It should not have required a three month lead-up consultation period in this process. This type of approach will now be rushed through, but it should have been done in advance. I cannot believe that the data is not available on a range of different sites where we could have done it, so we would not create this anomaly where certain areas are going to see rental pressure above the 4% in the next two months in advance of any other measure being put in place. It would have been better just to have set the whole country within the measure, but if are not going to do that we at least should have put in place a mechanism, before the measures were published, to view which areas would benefit. Bray is not that different from Shankill in terms of rental prices, and it would not be difficult to foresee that Carrigaline would run into difficulty compared to Blackpool or somewhere else in central Cork.

I will conclude, as many Members have spoken and a number of Members are due to speak. I wish to make two points. I attended a recent conference held by chartered surveyors. People at the conference were speaking about a new model of build-to-rent. Hines and other developers are doing it. Are they the right people to be building in Cherrywood? I certainly would not weaken any of the standards. The lowering of standards by the previous Minister with responsibility for housing was a disgraceful decision because we all pay for that in the long run. However, what I was hearing about this new model of build-to-rent is that the developers expect people to stay in the units for a long time. It is long tenure and secure rents. It is not the type of model we have at present in which the tenants do not have any rights and are moving on all of the time. I do not believe that the measures we and other parties have put forward in terms of introducing rent controls, giving longer security of tenure and giving rights to tenants would not have stopped the way the building industry is going on the build-to-rent private market as well as us also proceeding massively with a cost rental State developed social housing rental model, which would include a variety of different tenants. We are not doing that. I cannot understand why the Minister has missed this opportunity to make the big change.

The Department officials must step up here. They appear to be obsessed. Why have they lost confidence in the ability of the State? There is an obsession with the market doing it, particularly at this time after our economy was in crisis. I believe it was Keynes who said during the 1930s that it was necessary to stabilise an economy first before one reforms it. We did the stabilisation part, but we are not doing the reform. That is what I see in these amendments. It is a partial, piecemeal plaster on a broken arm. We need more than that.

See this speech in context