Dáil debates

Thursday, 8 July 2021

Residential Tenancies (No. 2) Bill 2021: From the Seanad


5:20 pm

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein) | Oireachtas source

Sinn Féin is not opposing these amendments. I will not repeat the broader debate we had on whether this is the right policy as we had that debate during Private Members' time this week. However, I will raise a number of concerns I would genuinely like the Minister to consider following the enactment of the amendments to the Residential Tenancies Act he has just outlined.

In the press release announcing the change from the 4% RPZ cap to linking rent reviews to the harmonised index of consumer prices, the Minister said that the average HICP figure over the past four years was around 0.7%. That is factually correct. However, the problem is that, according to the latest figures from the Central Statistics Office, the annual change in the HICP is 1.9%. It has clearly been on an upward trajectory for the past nine or ten months. There is a wider European debate going on about where inflation is going to go, and many people believe it will continue on that upward trajectory for the next 12 to 18 months. There is also some discussion about changing the nature of the HICP calculation to include domestic home purchases. Given the nature of house price inflation here, that could further boost it upwards. I urge the Minister and his officials to keep a close eye on that. Rather than wait for the HICP to hit 4%, the Minister should intervene much earlier. If he does that, he will have the full support of Sinn Féin. We differ on the policy we would like to see implemented but any easing of the pressures on renters will not be opposed by our party.

The second issue I urge the Minister to reconsider, in the context of further amendments to the Residential Tenancies Act due in the autumn, relates to areas outside the rent pressure zones. The Minister knows very well that when a rent pressure zone is established, the area immediately outside it experiences a higher than normal level of rental inflation and eventually gets incorporated into the RPZ. The Minister shared that view when he was in opposition. That has been the experience of the RPZs since 2017. Landlords close to the RPZ become fearful that at some point they will be incorporated into it and they set rents at the rent review accordingly. It is a self-fulfilling prophecy because they raise rents repeatedly until the area meets the RPZ criteria. We also know from recent rent indexes from the Residential Tenancies Board and Daft.ie's quarterly reports on asking prices that some of the most significant rental inflation has occurred outside the urban centres, particularly in midlands counties and some parts of the western seaboard. I have a real worry that, because the Minister is leaving biennial rent reviews based on existing market rent in place, it could have a disproportionately negative impact in those areas. Again, all I am urging the Minister to do is to get his officials to monitor closely what is happening and intervene where necessary.

My colleague, Deputy Buckley, will speak to his own amendment but I want to make one point on it. I understand very clearly that the original legislation set the area as the local authority or local electoral area, LEA. However, as the Minister knows, there are a certain number of rental markets that spill over the edge of a local electoral area. That happened in Limerick and Deputies from Limerick city pleaded with previous Ministers to take action on that issue. It was only when rents spiralled out of control that RPZs were eventually expanded to the LEA. There has to be a way of taking sub-LEA data from the RTB rent index. The RTB has told us those data are available at the level of district electoral divisions, DEDs. Between now and when he next amends the Residential Tenancies Act, I ask the Minister to consider an amendment to that legislation to allow, in those small instances, the inclusion of DEDs that are clustered beside an LEA where there is clearly an increase in rental activity particular to the DED and which does not extend across the LEA. This would ensure people at the edges of cities and towns do not fall foul of unfair rent increases.

It is very important that renters have complete clarity. Is the Minister in a position tonight to tell us the date on which these changes to the legislation will take effect? That clarity would be helpful. As I said, we are not opposing this legislation. We have a different view on what should be done now but we certainly would not oppose anything that gives any level of relief to renters, even if it is not the full level of relief we would prefer.


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