Darragh O'Brien (Dublin Fingal, Fianna Fail) | Oireachtas source

Between those two extremes are the vast majority of renters who want to own their home but are caught in up the financial mire of renting. Survey after survey has shown that tenants want out. They want to break free of the rent trap and get a place they can truly call their own. We need to consider the long-term consequences of this trap and the financial impact it entails. The cost and consequences of the rent trap being set by Fine Gael, based on its obsession with the new continental model, will be disastrous. Likewise, the wish list economics of Sinn Féin, which has its own fixation on locking people into a social rental model, would have dire long-term repercussions. In contrast, Fianna Fáil believes in home ownership. It is good for individuals, families, communities and the country at large. We believe that tenants stuck in a rip-off rental market should be given the opportunity to break free of the rent trap and purchase their own home. That is why we are supporting the Bill on Second Stage, as a measure to help break free of this suffocating rent trap.

There are several reasons that we are better off with home ownership. Financially, housing soaks up much of the disposable income of workers and is a key asset in building up wealth. Owning one's own home is cheaper than renting and allows a store of value to build up wealth. This wealth can be transferred on to the next generation to give that generation a better start in life. With rent levels soaring by 81%, as I noted, the financial case against long-term renting in the private rental market is proven. Paying off a mortgage is a foresaving mechanism, particularly after the first few years when interest repayments are replaced by equity. Each repayment is an investment in the future, as well as a charge on accessing that accommodation. By contrast, renting is a monthly cost, essentially a charge for using a service with no return on the money spent at the end. With buying consistently cheaper than renting, owners have the benefit of saving and investing more.

The recent emphasis by the State on private rental also ignores the ticking time bomb that goes off when a generation of renters reaches old age. The shifts we are witnessing now will mean that, in a few decades, private renters no longer earning wages on entering enter retirement will be reliant on heavy State subsidies to afford high rents in a competitive market where they are pitted against younger workers.

Beyond these clear financial benefits, there are also real social benefits to promoting home ownership. Giving individuals and families a clear stake in an area and a sense of place that they can transfer to their children is a stabilising force in society. Greater community participation and increased general well-being are consistently captured as the results of home ownership in academic research. The instability of renting is no substitute for that. Home ownership is the most secure form of tenure. That is why we need affordable housing for working people.

These factors are all part of a broader reason that Ireland historically promoted owning the roof over one's head. It is the reason that, in survey after survey, young people still overwhelmingly aspire to buying their own place. That is why Fianna Fáil wants to help renters break free of the rent trap.

As I said, Fianna Fáil will support this Bill on Second Stage. Allowing this legislation to proceed to pre-legislative scrutiny will give an opportunity to tease out its ramifications. For example, as the Minister stated, the constitutionality of the Bill may be disputed. Its impact on supply and the fact that it covers the entire country, not just the existing rent pressure zones, also need examination. Furthermore, it will give us an opportunity to discuss in detail the rent tax credit cost and its impact on the rental market.

We need to strike a balance between restraining the extortionate rents tenants are paying and keeping ordinary landlords in the system and not penalising those who have not hiked up their rents in recent years.

I will focus briefly on the impact on small landlords. There are 150,000 landlords in Ireland, 80% of whom have either one or two rental units. They do not enjoy preferential tax treatment in contrast with the real estate investment trusts, REITs, and cuckoo funds this Government has cultivated. Fine Gael has focused on attracting REITs and Irish real estate funds, IREFs. Institutional landlords which are the norm in countries like Germany have begun to rapidly expand into Ireland but will not fill the gap left by the traditional landlord. REITs are heavily concentrated on the high income accommodation sector of the market, leaving large cohorts behind.

Haemorrhaging properties from a severely pressurised market further drives up prices, freezing out low income workers and vulnerable households which, in turn, is generating our abysmal homelessness crisis. Despite this, the Government has done nothing other than accelerate mortgage interest relief under pressure from my party to address this embattled sector. Instead, it has pressed its thumbs on the scale in favour of institutional investors.

The Minister may remember the publication in 2017 of the report of the working group on the tax treatment of landlords. That remains unfinished business. At pre-legislative and Committee Stage of this Bill, Fianna Fáil will ensure that the report's proposals on alleviating the burden on small landlords are addressed. The proposed rent freeze should not be a further spur to losing badly needed homes from that sector. A rent freeze alone will not address the multiple facets of the rent crisis, which goes much deeper than that. A new national rent deposit scheme will help address the disputes around deposits. A local authority rent accommodation quality certificate will help to improve standards. Rolling out cost rental to scale after years of missed deadlines is a badly needed step. Broader steps to tackle construction costs, reduce land prices and get bricks and mortar in the ground to boost supply are vital. Ultimately, however, we need to give renters an opportunity to realise their dreams and ambitions to own their own place. The Fine Gael vision of a private rental sector is both economically and socially unsustainable. The Sinn Féin model of total social rental is equally damaging. We should not be afraid to actively support people to own their own home.

The Bill should not be viewed in isolation. Fianna Fáil support for it is a recognition of the pressure and strain the rent trap is placing on the shoulders of tenants across Ireland. We will work on Committee Stage to further refine the Bill and ensure the playing field is levelled out for small landlords. Most important, we will ensure this Bill forms part of a suite of measures to help renters smash out of the jaws of the rent trap and buy a place of their own. Fianna Fáil's Planning and Development (Amendment) (First-Time Buyers) Bill 2019 passed Second Stage last week. Our affordable housing scheme, supports for renters to save for their deposit and shared ownership models must all form part of a campaign to arrest the decline in home ownership and break the rent trap once and for all.

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