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

I move amendment No. 1:

To delete all words after “That” and substitute the following:Dáil Éireann, while recognising the acute pressures that tenants are under and the importance of strengthening security for tenants, and to move towards longer term tenancies, declines to give the Anti-Evictions Bill 2016 a second reading for the following reasons:

(a) the proposals in this Bill were discussed and debated in detail in Dáil Éireann in the context of the recent passage of the Planning and Development (Housing) and Residential Tenancies Act 2016 which, together with the Government’s Strategy for the Rental Sector published in December 2016, gives effect to the Government’s policy on the rented sector;

(b) the issues involved are being addressed comprehensively through the Rental Strategy, including the actions to be taken forward in implementing the strategy consistent with the Confidence and Supply Arrangement for a Fine Gael-led Government and the associated legislative changes introduced under the Planning and Development (Housing) and Residential Tenancies Act 2016, such as the Tyrrelstown amendment, which is already delivering positive outcomes for tenants;

(c) it pre-empts any assessment of the positive impacts on tenants’ security that will arise from the implementation of the Strategy’s Rent Predictability measure in those areas already designated as Rent Pressures Zones and, potentially, in additional priority areas which are to be examined for designation, the overall effectiveness of which is to be reviewed in June 2017;

(d) it does not take account of the Working Group, to be established under Action 5 of the Rental Strategy and report by Q1 2017, to examine the scope for amending legislation to provide for greater protection of tenants’ rights during the receivership process;

(e) the measures in the Bill risk undermining stability and confidence in the rental sector and negatively impacting on existing and future supply of rented accommodation; and

(f) the Bill has potential legal and constitutional implications which require careful consideration.

I thank Deputies Coppinger, Barry, Paul Murphy, Boyd Barrett, Bríd Smith and Gino Kenny for bringing forward this Bill and emphasising once again the importance we attach to the development of the rental sector. This is a major priority for me and the Government. While I acknowledge the Bill's merits in the context of the development of the residential rental sector, the Deputies will appreciate that the proposal once again raises issues that have been addressed by the Oireachtas in the passage of recent legislation and the Government's strategy for the rental sector. In that respect, I accept that there was some co-operation towards the end of the debate on the recent Bill to complete it before Christmas. We also had lengthy debates on Second Stage and Report Stage during which Members had their say on many issues.

The rental strategy is supported by 29 actions under the headings of "Security", "Standards", "Services" and "Supply". It is premature to revisit these issues at such an early stage in the implementation of the strategy and the Planning and Development (Housing) and Residential Tenancies Act 2016, which was signed by the President on 23 December 2016. The measures in the Bill before the House risk undermining stability and confidence in the rental sector and negatively impacting on existing and future supply of rented accommodation.

The rental strategy launched on 13 December 2016 recognises the importance of the sector and was designed to provide for a balanced package of reforms meeting the needs of tenants and landlords to ensure we have functioning rental sector. Every political party, member of the public and stakeholder in the rental sector had an opportunity to contribute in writing to the rental strategy. Many people also contributed verbally at seminars and so on. The strategy sets out a realistic targeted plan for dealing with the many serious issues we are discussing.

I have prioritised the introduction of a time-bound system of rent predictability based on the concept of rent pressure zones for immediate implementation. Under this system, areas where rents are high and rising quickly will be identified and designated as rent pressure zones. In these areas, annual rent increases will be limited to a maximum of 4% for a period of three years. This measure has already been applied to Dublin and Cork city and came into operation on 24 December 2016 following enactment of the Planning and Development (Housing) and Residential Tenancies Act 2016. These areas were chosen as they meet the criteria for a rent pressure zone and because so many households - 150,000 - in these areas depend on rented accommodation.

We are not stopping there, however. The Housing Agency is working with local authorities to identify and propose new areas for designation. The Residential Tenancies Board is further developing its methodology for analysing data on rents to allow local electoral areas to be assessed to determine whether they meet the criteria for designation as rent pressure zones. This will enable us to target the measure more precisely and include specific problem areas within local authority areas which need rent predictability, even if the relevant local authority at aggregate level does not meet the designation criteria. It will also mean that specific areas that do not require the measure can be excluded. This work is continuing apace and I expect that we will see new rent pressure zones being designated in the near future.

On the right to terminate on the ground of sale, I also introduced other significant legislative changes in the Planning and Development (Housing) and Residential Tenancies Act 2016.

The Act includes two significant provisions in regard to security of tenure. Section 40 of the Act, more commonly known as the Tyrrelstown amendment, provides that a landlord may not terminate a tenancy on the ground that he or she wishes to sell a dwelling in circumstances where more than ten dwellings in the same development are being sold at the same time. This provision arises from a commitment in the Rebuilding Ireland action plan for housing and homelessness to deal with situations whereby large numbers of tenants in a single development are served with termination notices at the same time. In addition, section 41 of the Act provides for the repeal of section 42 of the Act of 2004, thereby extinguishing the landlord’s right to terminate a further Part 4 tenancy in the first six months of that tenancy for no stated ground. Yesterday, I signed the commencement order for both of these provisions and they have come into effect as of today.

In drafting the Tyrrelstown amendment, my Department was aware that restricting the use of the ground of sale to terminate a tenancy could be regarded as an interference with constitutionally protected property rights. Therefore, the amendment was drafted to ensure that this interference was both proportionate and justified. I know that there are people in this Chamber who do not agree with the approach we took, but we took it on the basis of legal advice to ensure that we would not lose a legal challenge. I believe that the justification behind the Tyrrelstown amendment, which removes the right to end tenancies on the ground of sale where ten or more properties are involved, is sufficiently strong to protect it from a successful constitutional challenge. The smaller this limiting number of properties, the weaker the justification and the more likely a successful challenge would become. Removing this right entirely, as this Bill proposes, would be a risky move in my view and for this reason alone I am not prepared to support it.

Aside from the legal vulnerability of the proposal, I am also convinced that it would result in a withdrawal of existing supply in the market in the short term. This is not in the interests of any stakeholder, but it would be disastrous for tenants in particular if supply was to dramatically reduce. I also believe there is a need to make a distinction between professional landlords and funds that own large developments and landlords that own one or two properties, which is the vast majority of landlords in Ireland. The Tyrrelstown amendment is a more balanced and proportionate measure but it is a fundamental change to the obligations of institutional landlords and it is already having an impact. We have seen a situation of multiple tenancy terminations potentially arising in Limerick over the last week. Happily, when I made contact with the parties involved and explained the Government’s intent, they withdrew the termination notices and agreed to hold off until the new measures came into effect. In other words, they were willing to take on the spirit of the legislation before it commenced. I thank them for doing so.

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