Pat Casey (Wicklow, Fianna Fail) | Oireachtas source

The Bill was introduced to the Dáil prior to the passing of the rental pressure zone legislation in December so it is somewhat out of date. That is not to imply the situation in the rental market has in any way improved for the great majority of renters, especially tenants who have had to move to a new property or those looking to rent. It is not clear that this Bill offers any new solutions not already included in the Government rental pressure zone measures. Fundamentally, the 4% cap on upwards rent increases implemented in the rental pressure zones measures has probably helped ease the pressure on some sitting tenants from significant rent increases. It has created greater certainty for sitting tenants. According to Ronan Lyons, there is evidence landlords have passed on rent increases to movers. According to the latest daft.iereport, for many sitting tenants there have been no dramatic increases in rent. This may mean the rental pressure zone system is making things worse rather than better by amplifying the insider-outsider nature of the rental sector. Again we are back to the issue of supply. Rent caps and other rent regulations will not fundamentally alleviate the crisis renters face. The message has to be that much greater supply is needed. The Bill proposes to empower the Minister to designate fair rent zones in which the rent shall not exceed the market rent on the fair rent valuation date of 1 October 2011 by more than 5% above the CPI. By my calculation it would mean many areas in Dublin would probably experience an average rent reduction but not by much. Whether we like it or not, forcing a reduction in rents, as this Bill attempts to do, would infringe on property rights which would be unconstitutional. It would also probably make the situation a lot worse for people who are looking for accommodation.

On the other main point of the Bill which seeks to improve tenants' occupancy rights, we have a lot of sympathy. If we want to tackle the rental crisis and in particular the lack of tenant security in the sector, it has to be done in a meaningful way and in a manner that is legal and constitutionally sound. Fianna Fáil supports in principle the removal of sale as a reason for ending tenancies and we are working on measures that would provide greater security of occupancy for tenants in this regard. We will also support the reduction, in the Tyrrelstown amendment, to five units or even fewer. Mike Allen of Focus Ireland argues that eviction for reasons of sale is now the number one source of homelessness. He estimates that one third of households becoming newly homeless is as a result of evictions for this reason. We saw such evictions recently in Balally, Sandyford and Tallaght.

I will address some of the specific issues with the rental pressure zone legislation that will need to be addressed in the review in June. I will discuss where we are going wrong on the supply side and what measures are needed truly to accelerate supply. From rent inflation data in quarter one of 2017, it is clear the 4% rent caps are only having a very limited effect on stabilising rents for those in situ. They should be considered a short-term stabilising measure. Rent regulations will not be the solution to the rental inflation of housing prices generally. It is clear there are flaws and inconsistency in the methodology used in the designation of rent pressure zones. Many towns with both the highest rents and highest rent inflation, such as Maynooth in Kildare and Greystones in my county, are not covered under the rent cap legislation due to the flaws in the approach used to decide on the designations. Meanwhile many areas within these counties and others that have been designated do not have particularly high rent pressures, such as many rural locations.

Other issues with the rental pressure zone model include its effect on investor uncertainty. This is because designations are decided upon in such a piecemeal manner. If there were a wider or even national roll-out, of rent caps it would be better for investor certainty in the short term. The threat that rent caps can be implemented in any quarter has a bigger impact on investor capacity than the rent caps themselves. We will be ensuring the review in June goes ahead and the flaws in the methodology are rectified to ensure towns and other rental pressure zones can be included.

The publication of the three recent reports on the acceleration of house price inflation, continual rent inflation in 2017 and the lack of progress being made on new social housing construction demonstrate the plan is failing the key test of expanding new housing supply. The Minister, Deputy Coveney, continuously ignores areas where we could deliver significant new housing while introducing procyclical measures that are causing very extreme house price and rent inflation which are clearly creating conditions for the next housing bubble. It is acknowledged that building houses is a time-consuming and difficult undertaking. The constant assertions that targets of new housing supply are being met when apparently the opposite is the case is doing nothing to change policy that will impact the dysfunctional housing market.

Census 2016 results show that Ireland has 2 million homes, a net increase of just 9,000 homes since 2011. Given that there were 170,000 extra people in the country in 2016 compared with 2011, it is quite easy to see why we have a housing crisis. The Government continues to overlook areas which could deliver significant construction cost savings. It could, for example, reform our defective self-certification system of building control introduced by the last Government. Instead, it has introduced pro-cyclical measures aimed at private developers that are causing price inflation and has clearly created the conditions for the next housing bubble.

As has been well documented, the most recent census revealed almost 260,000 vacant homes across the country, representing 15% of the total housing stock. This is both shameful and wasteful but this figure may well be a significant underestimation of vacant properties throughout the country. There are thousands of square feet of liveable space above shop units, for example, as anyone who walks around our cities and towns will see clearly. A vacant building study completed by UCC revealed that the typical city centre conversion of vacant sites' upper floors could increase the residential population in urban centres by over 260%. In Dublin this could translate into over 2,000 additional residential units in a very short space of time. The policy priority should be to focus on returning vacant spaces into use as accommodation. Most vacant spaces have the potential for conversion to residential use in older buildings but it is next to impossible to get sign-off because of the building standards for new builds. Building control and planning regulations make the spaces in older or commercial buildings virtually impossible to convert for residential use and must be changed if we are to make a dent in reducing the levels of vacancy and dereliction.

I see no acceleration in the supply of social housing. In the past six years, the State has built just over 4,000 social housing units, which is fewer than were built in almost every year between 1994 and 2009. This not only affects the families who are eligible for social housing but also impacts on housing supply across the board. Traditionally the State has acted as the largest single house builder in the country, adding significant levels of new supply annually. However, under Fine Gael Governments, this situation has been reversed and the absence of new supply coming from the State affects all who are in search of affordable housing. There have been no new approvals for large scale housing projects since January 2016. The most optimistic reading of the latest data suggests that fewer than 1,000 new social homes will be constructed in 2017. It is indicative of the Department's strategy that of the 276 social housing projects that have passed the pre-planning stage, just 15 include 50 or more individual houses or apartments. The largest scale housing project proposed is for 100 homes, of which there is only one in the country. Approximately 80% of the projects involve just 30 units or less. There can be no doubt that the preference for small scale housing developments of between ten and 30 units is holding back the delivery of social housing. While no-one is suggesting that we build social housing developments on the scale of Ballymun or other post-war social housing projects, it must be acknowledged by the Minister that the preference for small social housing developments is costly and time consuming and is not appropriate in the context of the current drastic housing situation. Further, it does not address the needs of families throughout the country.

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