Brendan Howlin (Wexford, Labour) | Oireachtas source

That man is commuting daily from Dunmanway, which is 54 km each way. It is hilarious, is it not? That man cannot rent in the city in which he works. His story is typical of many people who have been failed by Fine Gael's strategy for the rental sector, the policy that introduced rent-pressure zones. The effect of those zones is "to limit rent increases, both within existing tenancies and between tenancies, to 4% per annum for a specified period", yet the housing affordability crisis is getting worse. More than 10,000 people are experiencing homelessness at present. Since the policy was brought in, we have seen more and more areas designated as rent-pressure zones because rents have been shooting up in the areas alongside rent-pressure zones. This is the case in Galway, Maynooth and Drogheda. Housing officers in local government have told me directly that rent-pressure zones are the single worst thing to have happened to the private rental sector. Rather than capping rents, the policy has given a signal to landlords to increase rents by 4% per year. Landlords believe that as every landlord is doing the same thing, they should too. Rent inflation is at 4% in the rent-pressure zones, but inflation outside of the zones, in the contiguous areas, is even worse. The policy is a failure and the reason for that failure is that the benchmark used for rent affordability is wrong.

Affordability must be benchmarked against earnings, what people can actually afford to pay. Average annual earnings for full-time workers grew by 1.7% between 2016 and 2017. Rents in rent-pressure zones are capped at 2.5 times the growth in earnings over the same period, which makes no sense whatsoever.

The minimum wage set by Government rose by 1% in 2017 and another 3.2% in 2018. The minimum wage in turn affects sectoral wages in cleaning, security, retail, hairdressing and other low-paid occupations. Many people working in these areas are renters. The Government is setting wage increases at far less than the 4% rent increase that it is not only tolerating, but in many cases encouraging. It is effectively encouraging a 4% annual increase in rents. Why did no one make the link between a proposed cap on rents and actual increase in earnings? Who came up with the 4% figure? Does the Taoiseach honestly believe that such a level of rent inflation continues to be acceptable or sustainable?

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