Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I move: "That the Bill be now read a Second Time"

We all know that we are in the middle of a serious homelessness crisis. All of our efforts, as a Government and as an Oireachtas, are being directed towards solutions that will help bring this crisis to an end. Fundamentally, supply must be - and is being - increased, thanks to the policies that this Government is spearheading through Rebuilding Ireland. As supply increases we also have to ensure that we are protecting people who are currently struggling with housing affordability and security issues. This places a particular focus on the need to continue to reform our rental sector. The rental sector in Ireland still needs to develop and mature in order to provide a viable, sustainable and attractive alternative to home ownership, rather than serving as a temporary refuge or a staging post on the route to home ownership.

Our rental market is not like that of other European countries yet. It is true that we do not have a mature rental sector. We are trying to transform the sector, but we do so at a time of under-supply which makes it very challenging. We do not have a cost rental market. In other countries, provision of cost rental accommodation provides 20% to 25% of total accommodation. We are at the very early stages of building a cost rental sector. If we get it right, the long term benefits are obvious. What we do have is the Residential Tenancies Board, RTB, which provides strong protection to both tenants and landlords. A professional landlord sector similar to other European countries is beginning to build in Ireland, but the majority of our landlords, some 86%, own only one or two properties. Many are accidental landlords following the financial crash in this country, which is still having an impact today on housing, banking and public and private debt levels. The make-up of our landlord sector, with its over-reliance on small and accidental landlords, has to be borne in mind. We have to be careful, in making changes to Irish tenancy law, that these changes do not inadvertently cause an unsustainable exit of landlords from the rental sector, which would only make things worse.

Recent data from the RTB tells us that landlords have left the market. Over 1,700 have done so since 2015. This is a real and legitimate concern that all of us must keep in mind as we progress new reforms in this sector. We have to work with what we have and secure continued participation in the residential rental accommodation sector, as we improve and reform it. This will require participation from the traditional landlord as well as participation from the larger, institutional landlords, some of whom have only recently begun to participate in this sector here.

The Residential Tenancies Act was passed in 2004 and represented the most significant legislative reform in the private rented sector in over a century. Prior to 2004, the rental market operated in a crude and fragmented manner. There was little or no security of tenure for tenants and recovery of possession presented a nightmare scenario of long and expensive court proceedings for landlords. Even minor disputes arising during the course of a tenancy had no avenue of resolution other than the courts. The combination of these factors resulted in the absence of a secure, regulated rental market that could offer a real, attractive longer-term housing solution to people searching for a home. Rented housing represented a tenure choice of last resort for many. It was perceived as being only for student housing, for bedsits, as a short-term solution or, indeed, the only solution for the most marginalised and vulnerable in our society who could not afford anything better. This, thankfully, is not the private rented market of today. More people are renting now than ever before. Figures from the RTB show more than 339,000 tenancies registered from both private and approved housing body landlords at the end of 2017. People are not renting solely because they cannot afford to buy a home, though I recognise this is a challenge for many in Ireland today. Many people are renting because they prefer the flexibility that renting offers, because they do not want to take on the significant debt that is a mortgage, or the liability that home ownership can sometimes be. It is also true that Irish life is changing, and has been for some time, resulting in people staying in education longer, marrying or committing to a partner later and putting down roots in a community at an older age than my generation’s parents might have. These factors are also leading to a growing demand for rental properties, different types of rental properties to the ones we may have seen before, and a better functioning rental sector.

Not only in our rental policy have we sought to meet this demand, but also in the new planning and building guidelines that we have developed in the past 18 months around build to rent apartments, more cost effective apartment delivery and the introduction of new concepts like co-living. These reforms are now leading to an upsurge in planning applications for new apartments.

While it is the case that renting has been a negative experience for some and has not meant a secure and safe home, for the vast majority renting works and we need it to continue to work, but work better than it has been working, with greater transparency and accountability for tenant and landlord. The Residential Tenancies Act 2004 introduced real security of tenure for tenants in the private rented residential sector for the first time. It set out minimum obligations for landlords and tenants and provided access for both tenants and landlords to a cheap, informal and independent dispute resolution service. The Act laid out conditions for rent reviews and prohibited the charging of rents in excess of market levels. It set out fair procedures for the termination of tenancies and provided for notice periods linked to the duration of a tenancy. Under Rebuilding Ireland, rent caps in the form of rent pressure zones were introduced to limit what had until then been very steep increases in rents, particularly in high demand areas. What we have seen in these areas to date has been a moderation of rent inflation, particularly for existing tenancies, but rent inflation, and rents themselves, remain unacceptably high in many parts of the country.

People earning a good salary for a hard day’s work are being pinned to their collar because their rent is too high.

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