Cian O'Callaghan (Dublin Bay North, Social Democrats) | Oireachtas source

I will not use my full ten minutes. I wish to make just a few points. First, I wish to address the issue of supply of rental units. There is something of a narrative that if rental income levels are not increased, that will hit supply. The one thing we can say with certainty about this is that rental incomes have gone up considerably in recent years, particularly during the period before RPZs were brought in but also since they were brought in. In most areas, rental incomes were increasing beyond the percentage allowed for under the RPZ legislation. We have the statistics on this from the Daft reports. Insufficient rental income is not causing problems with rental supply. In most parts of the country, rental income is well above the cost of a mortgage in the area. The landlord or investor in most instances is, therefore, able to cover his or her repayments and make his or her tax contributions, whereas in the past landlords sometimes had to supplement their mortgage repayments based on rental income.

10 o’clock

Income is not the problem. There are problems with infrastructure and constraints in the development of new housing. There are issues with land supply and who controls development land, and the lack of affordable, social and cost-rental housing schemes. However, rental income is not the issue.

In 2004, the RTB was set up, limited regulations were brought in to address the private residential sector and modest improvements to security of tenure were introduced. At the time, there was a strong narrative to the effect that this would lead to a big exodus from the private rental sector. This is what we were told. What happened after 2004 in terms of rental supply? Did it contract? Was there an exodus? The opposite happened. Between 2006 and 2016, there was a doubling in the number of households that were renting following the introduction of those modest measures that we were told would lead to an exodus. Much of that increase happened after the collapse of the Celtic Tiger and it is clear that some of the issues relating to supply are not connected to rental income because many of the increases in rental supply that happened at that time took place while rents were not increasing.

We know from the ESRI study that was published in July that, before the pandemic, one in three households in the private rented residential sector had insufficient income after paying the rent to meet basic costs of living. Rental costs are having a major impact on people’s lives and their ability to do the basics. I refer to families making a decision about whether they can afford to pay for a GAA camp for their children over the summer and so on. They may not be able to meet those costs because of rental pressures.

I am glad that a number of Government Deputies raised constitutional issues. I am also glad that there is the commitment to a referendum on housing in the programme for Government, and I welcome that the Tánaiste confirmed that there will be a referendum on the right to housing on Leaders' Questions earlier. This is significant because that was ambiguous in the programme for Government. I urge the Minister to ensure that referendum is brought forward as quickly as possible. If the Government has concerns about constitutionality, it is in their power to bring forward the referendum, which would balance constitutional rights to private property and would mean, in all these areas, we could do more to protect tenants and to balance those rights. That is within the gift of the Government.

In addition, on the issue of constitutionality, significant intervention is made by the Exchequer and the Government in the private rental sector that increases and inflates rent. The massive amounts put into the rented sector, which have to be provided because there is a lack of social and affordable housing, through various housing subsidies, HAP, rent supplement and other schemes have an upward pressure on rents. If such Government intervention was not made, rents would be much lower. On that basis, it is justified and proportionate for the Government to take measures to control rent because there is such a large amount of taxpayers' money going into the sector and distorting rents. The Government has a responsibility to do that in the interests of those who are renting and not in receipt of State subsidies. They are paying higher rents as a result of the State's failure to provide sufficient social, affordable and cost-rental schemes on housing. There is a strong argument on that basis that this would be constitutionally justifiable.

I will conclude there in the interests of time and I look forward to the response from the Minister.

See this speech in context