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

I will start where Deputy Duncan Smith finished. He made a very good point about the impact on children whose parents are renting. It is what I have heard from parents who are renting and are subject to rent increases that they cannot afford or are given a notice to quit, an eviction notice. It is exactly as Deputy Smith described. Their children do not know if they are going to see their friends again, if they will see the other kids in the GAA club again or if they will have to move school. In some cases, it may have taken the children a long time to settle into school and make friends. The parents finally overcome all those hurdles and deal with all of that - it may have taken two or three years to get to that point - only to be served with a rent increase or an eviction notice and that is it. They cannot find another home in that locality and community and they have to move and start from scratch all over again. It is absolutely heartbreaking for those parents and their kids.

That is a matter of political choice. It is the system that is designed here and allows for that. In fact, it encourages and facilitates it. It is one of the things that goes to the heart of why the Bill that the Minister is talking about is so weak. We do not need 12 months to know what the impact of the legislation will be; we know what the impact is now. It has two impacts. It allows for rent increases at a time when we have some of the highest rents in Europe. At the same time, it allows for the loopholes that mean that people get evicted. It is exactly as Deputy Duncan Smith has described. It is the system of a landlord serving their tenants with an eviction notice, renovating the home, sometimes just by repainting it or whatever, and then increasing the rent by as much as they want. That is the system we have in place currently. It adds to all of that insecurity and heartbreak for families and children. It is a system that is not in any way defensible. It should be changed. We should have legislation on that now to shut down those loopholes.

I agree that the key challenge here is about how we get rents down. This Bill is a welcome step in that direction by providing for a rent freeze and rent certainty for the next three years, which will buy some time and give renters space. However, the challenge is how to reduce rents and get proper security for renters in this country, as is the norm in most other northern European countries. There is no reason we cannot do it now. In fact, rents are so high here and rental returns are so high that any arguments that changes here would affect investment are completely spurious. The rental sector in Ireland has tripled in size over the last 20-odd years. There is no issue with investment being affected there. We also know from rental yields, which are higher in Ireland than any other European country, that there is no issue or concern for people in terms of investing and the rental yields they receive.

They are way above the yields they would receive from bonds, deposits or other kinds of investments. Therefore, the arguments are highly spurious. They are also spurious because not only are the returns to investors on rent in Ireland so high but the capital investment alone probably justifies an investment given the significant increases in house prices. It is a win-win for anyone investing now. There has been an exodus by some landlords over recent years. That is mainly driven by debt resolution in respect of mortgages on buy-to-let properties in financial distress. In addition, as the properties of those who never intended to be landlords came out of negative equity, it was possible to sell them on. That has been the main driver. The investment by investment funds has distorted house prices.

The Minister referred to cost rental and the proposals that will be before us later this week. I have a serious concern related to cost rental. As stated explicitly by the Green Party before the last general election, since cost rental is not about profit but based on the cost of building and maintenance, rents should be set on that basis. Despite that, this Bill is allowing cost rental based on the cost of building and maintenance but also based on profit and equity returns. Allowing in the for-profit sector is not what the Green Party advocated before the election and it is not what cost rental is generally understood to be about. It is understood to involve a not-for-profit arrangement. Our ambition should not be to focus on having 25% of rents below market rates; what we should seek to achieve, given how rents are and how the objective could be met on a not-for-profit basis, is a rate around half the full market rate, certainly in the Dublin area. That is what the scale of our ambition should be.

On property rights, which the Minister raised, it is worth saying that previous Governments have argued against introducing measures to limit rent increases, claiming it would not be constitutional or that it would interfere with property rights. Over the years, under pressure, they have introduced such changes, including the RPZs and the 4% limit. We also saw the measures owing to Covid, including the temporary ban on rent increases and the ban on infections. We have now heard the announcement of a restriction based on the consumer price index. The current and previous Governments have proved, through their actions, under pressure, that measures to limit rent increases are, in fact, possible. There is ample legal opinion to the effect that the Government can act in the interest of the common good. That is constitutional.

Dr. Rachael Walsh of the school of law in Trinity College Dublin, in an article entitled “Housing crisis: There is no constitutional block to rent freezes in Ireland”, states:

There is significant scope in our existing constitutional order for property rights restrictions, the extent of which can be uncovered only through the introduction and testing of new measures.

[...]

[W]here a clear objective is identifiable for a restriction on the exercise of property rights that plausibly secures the common good and social justice and is procedurally fair, there is every chance of such legislation surviving constitutional challenge. There is no absolute right to begin or continue any profitable use of property guaranteed by the Constitution.

[...]

[W]e require judges to make difficult decisions about the fairness of the distribution of the benefits and burdens of collective life. Faced with this challenging task, they often defer to solutions to complex social problems that are arrived at through the democratic process.

Dr. Walsh's strong opinion is clearly that, in a democracy, the legislature has a right to legislate in the interest of the common good under the Constitution. In this regard, there are strong provisions that can be used. We have seen this in the various measures introduced over the years. It is a question of why the Government will not go far enough. It cannot be that the Minister is unaware that rents have almost doubled over the past decade and that he is unaware of the rental yields. It cannot be that he is unaware that only 26% of renters are renting by choice. He cannot be unaware that, according to the recent Threshold survey of renters, not a single respondent aged over 54 wants to be renting. The Government cannot be unaware that most renters are effectively trapped paying unaffordable rents when they want to own their own homes, and that they are simply unable to compete with investment funds that are bulk-buying homes. The Government cannot be unaware that 40% of renters do not feel secure and that 20% report having a bad relationship with their landlord.

According to the National Oversight and Audit Committee, NOAC, performance indicators report for 2009, just 10% of rented properties had been inspected in that year. Of the 10% of properties rented, 93% were not compliant. Therefore, people are paying incredibly high rents for properties that are, in the vast majority of cases, non-compliant with basic regulations.

The lack of action from the Government on this matter is not because it cannot address it legally. There are no credible excuses. We have a housing emergency. Unaffordable rent is one of the main reasons people who end up losing their homes end up homeless. They cannot afford rent in the private rental sector. Why is the Government not supporting this sensible Bill and saying it needs 12 months to know the reality of what is going on? It can see that reality now.

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