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

As the Minister of State knows, I like to think of myself as a very reasonable person and as somebody who will genuinely listen to the arguments the Government puts forward for the various measures it introduces. When it does something right, I will support it, when it does something poor, I will not oppose it, but I will highlight the inadequacies, and then, on many occasions, when I believe the Government is doing the wrong thing, I will oppose it.

I know this is the season of goodwill but any renter watching the debate so far and who understands the provisions of the Bill can only come to two conclusions. The first is this Government has no notion whatever of what is going on in the private rental sector, specifically in terms of the enormous pressure on renters facing ever-increasing costs of living. At the same time there is a dramatic and non-stop loss of private rental properties from the bottom and middle end of the market. The idea that bringing six pieces of exceptionally poor amending legislation to the Residential Tenancies Act is suggesting this Government is doing something right is further evidence. All of these minor changes, while marginally less worse than the previous set of changes, do nothing to tackle problems but simply add to the confusion out there. The only sentence from the Minister of State's speech that resonated with me was that which referred to the wrong policy choices having the wrong consequences. That is exactly what this and the previous Government have been doing with the private rental sector for so long, and it is why we are in the mess we are in.

A report in The Irish Timespublished just two hours ago indicates this State is the sixth most expensive place in the world in which to rent. Dublin is the third most expensive capital city in the European Union in which to rent. That is the reputation of our rental sector globally. Looking at the most recent Daft.ie report for new rents rather than existing rents for the third quarter of this year, average rents across the State are indicated at €1,500 per month and average rents in Dublin are indicated at over €2,000 per month. On the basis of affordability that puts rent at approximately 30% of net disposable income, people need take-home pay of either €4,500 outside Dublin or over €6,000 in Dublin in order for that average rent to be affordable for a household. That is just out of this world.

Looking at the most recent RTB data, including existing and new tenancies, the picture is not much better. We are still seeing State-wide averages of €1,300 and in Dublin averages of €1,800. A report commissioned by Dublin City Council and produced by KPMG is included as an appendix in the county development plan, which means it is very significant research, and it looks forward to what will happen with housing supply and costs over the next number of years. Based on all the most up-to-date data, including the Government's targets in the new housing plan, it indicates that over the next number of years average rents in Dublin will rise to €2,400 per month, meaning people will need take-home pay of €7,000 for that to be affordable. That is the scale of the crisis facing renters, which is why the bottom line for our party is that renters simply cannot take any more rent increases. They do not have the money, and that is the central problem.

Meanwhile, despite the talk about wanting to increase supply, since 2017, quarter on quarter, landlords and rental properties are leaving the market. These are predominantly accidental and semi-professional landlords taking advantage of positive equity in the market but we have lost over 20,000 rental properties at the bottom and middle end of the market in the past number of years. There is no plan from the Government to deal with this disorderly exit of the properties. At the same time, the new stuff coming into the market is high-end, poorly designed build-to-rent properties way beyond the reach of ordinary working people. Of course, it is one of the main reasons homelessness has started to increase again.

On the other hand, the Government's over-reliance on the private rental sector to meet social housing need because it is not building enough social houses itself means the housing assistance payment, HAP, in particular, but also the rental accommodation scheme, RAS, are absorbing far too much of what little rental supply is out there. The homeless HAP is particularly necessary for people experiencing homelessness but it is inflating rental prices even further.

There is a crisis in the private rental sector like we have never seen before but what is the Government bringing forward? With the rent pressure zones, it has brought forward an appallingly weak proposition. With tenancy security, meanwhile, what the Government is claiming is simply not true. A polite way of describing it would be "dishonest" but I could think of more forceful words. I will explain that with relevant data in a moment.

On the 2% provision, I should first say that 2% is mad because renters cannot afford 2%, 1% or 0.5%. If somebody is paying €1,600, €1,700, €1,800, €1,900 or €2,000, any percentage of an increase is completely unacceptable. The Government has not told people it is seeking to reverse a slightly positive change that the Minister, Deputy Darragh O'Brien, introduced in the previous Residential Tenancies (Amendment) Bill, meaning landlords will again be able to accumulate year-on-year rent increases if they had forgone them before. If, on the passage of this Bill, I am in a rental property and the last rent increase was in 2016, the actual rent increase that the landlord will be able to hit me with is not 2% but rather the inflation rate from 2017 to now, which is 5.6%, because that is lower than the 8% figure from using the 2% calculator. The Government is not capping rents at 2% at all for tenants who did not receive rent increases in previous years despite the Minister promising to get rid of that loophole; he got rid of it but only a few months later the Government is ripping up that provision and throwing it in the bin.

On top of this, the cap will not work anyway because RPZs have never worked. First, the cap does not apply to the third of rental tenants outside RPZs or the new stock coming to the market. It is impossible to police between tenancies, or when one tenant moves out and another moves in while the landlord charges above the limit. I want to be very clear that large numbers of landlords obey the rules but there is too much scope in the RPZ process for them not to do so. On that basis, not only is this legislation a bad idea if it did work but it is an exceptionally bad idea, because like its predecessors, it will not.

Let me deal with the Government's claim of introducing so-called tenancies of unlimited duration. It is not what is in this Bill and it is simply not credible to come here and say that. A tenancy of unlimited duration occurs if I sign a contract and the deal is that so long as I pay my rent, maintain the property and avoid engaging in antisocial behaviour, my tenancy is secure indefinitely. This would eliminate no-fault evictions and it is a standard procedure in almost any other civilised rental market.

The Government, meanwhile, is seeking to remove a small technical provision of the Residential Tenancies Act whereby at the end of a six-year Part 4 tenancy, a landlord cannot evict without grounds. I have no problem with its removal. According to the latest data I have from the RTB, for the past three years only 3% of notices to quit have been on what are known as section 34(b) grounds, or the grounds the Government is seeking to remove. Meanwhile, 77% of all notices to quit are on two other grounds, which relate to sale of property and use of property by a landlord or a landlord's family member. So long as those two provisions remain on the Statute Book, tenancies of unlimited duration will not exist in this State; that is a fact and not an opinion.

If we go to other more civilised and better regulated rental markets, we can see that people would rent a property, abide by the contract and get to stay. If the landlord wants to sell, he or she can do so with the tenant in situand the tenant cannot simply use the property for a family member because it is ultimately a rental property and not for mixing and matching between private residential and private rental.

It is time for the Government to be honest with people. It is making a small and technical amendment to the legislation. Yes, it is acceptable but it is nowhere near what is required to give tenants security of tenure. If the Government was serious, it would get rid of those other parts of section 34 of the Residential Tenancies Act. We can provide an opportunity for the Minister to do that on Committee Stage with our amendments. As the Minister of State made clear with his very questionable remarks in the Seanad about blood being thicker than water, he has no intention of doing that whatever.

The claim we cannot have real tenancies of indefinite duration because of the Constitution is bogus. It is the most bogus use of the private property protections in the Constitution I have ever heard. The Constitution protects people's right to the property itself but it in no way limits how the State regulates the use of that property, as we know from planning permission, zoning and this legislation. Unless the Government is willing to publish the advice from the Attorney General, which I doubt has been properly drafted, I will continue to believe the claim is bogus. Such action will not happen not because it is not legally possible but rather because the Government does not have the will to introduce what it now claims it is introducing, which are tenancies of indefinite duration. Shame on the Government for repeatedly claiming it is doing something it patently is not.

The other provision of the Bill is very technical and straightforward and I have no objection to it. If somebody has already paid the registration fee under the old rules, they should not have to pay an annual fee until the Part 4 tenancy expires. I have no objection to any of that. We have worked constructively with the Minister of State on the Maritime Area Planning Bill 2021 and we have worked constructively with the Minister, Deputy Darragh O'Brien, on the Planning and Development (Amendment) (Large-scale Residential Development) Bill 2021. Sinn Féin will not oppose this Bill but do not take that for a single second as evidence we believe anything in this is either good or what is required. It absolutely is not.

What do we actually need if the Government is serious about wanting the kind of rental sector just outlined, which is stable, growing and where both tenants and landlords can have security? It is one where landlords could make a fair return providing a good service and tenants would have long-term security of tenure and affordability.

What do we need to do? First, we have to accept we are in an emergency, and therefore, we urgently need a three-year ban on rent increases and a refundable tax credit to put money in renters' pockets. A refundable tax credit would not be my preferred option; I would much prefer to see rents unilaterally reduced. I do not believe that is possible or deliverable in the short term and therefore, the refundable tax credit is desired required. However, at a minimum there must be an emergency three-year ban on rent increases. Then we need to stop talking about cost rental and pretending we are doing it and we need to ask how much cost rental do we need and how much money it would require. The allocation of a paltry €70 million in budget 2022 to deliver more than 500 cost-rental units is an absolute embarrassment. We need at a minimum 4,000 affordable cost rental units year-on-year at a cost of €300 million plus, which is what Sinn Féin provided for, and even that would take some time to meet the need that is out there.

We also need to plan to halt the disorderly exit of rental properties from the lower and middle end of the private rental sector. The first thing that is required, which I called on the previous Minister, Eoghan Murphy, to do, as I am calling on the present Minister to do, is to commission research by the RTB to find out exactly the reasons those landlords are leaving. There is some survey data from the board, which is very helpful, but we need to go one step further. My suspicion is that many accidental landlords who never wanted to be landlords and semi-professionals who thought that it was an easy, soft investment and realised otherwise after the crash are now taking advantage of positive equity. They are simply getting out. However, there is a bizarre situation, which has happened on 70 or 80 occasions in my own local authority in the past number of months, where a landlord with a HAP tenant issued a notice that quit, the tenant moved out, the landlord sold the property and a mid-sized institutional investor bought that property at between €30,000 and €50,000 above the asking price, then leased it back to the local authority under the long-term leasing scheme at an astronomical price and a different social housing tenant was put in. Eighty such leases have been advertised on our choice-based letting system in South Dublin County Council in recent times. I suspect, knowing where the properties were, a very large number, if not the majority, were previous HAP tenants. It is displacing one group of social housing tenants for another. Here is the crazy thing: the Government, the Minister and his Department will not let our local authority buy those properties which is the most logical thing. If a HAP, RAS or rent supplement tenant is in a property that is being sold, let the State buy it. As long as it is of the right quality and subject to proper price controls, it should be added to the local housing stock. However, there is also a case to seriously consider credible tax reform of the private rental sector. Large institutional investors pay no tax on their rent roll. Some medium-sized investors pay tax at a business rate while semi-professionals and accidental landlords pay much higher tax. That is untenable and, therefore, comprehensive reform where all landlords pay a fair rate of tax on the profits they generate would be much more appropriate. The Minister should do the decent thing. If the programme for Government and the housing plan commit to tenancies of unlimited duration, then he should just do it and introduce the legislation, otherwise we are going nowhere.

On the basis of this Bill, Fianna Fáil and Fine Gael, yet again, cannot be trusted by renters. I expect that they will not be in here to speak to the Bill today to save their blushes but the incredible thing is that the Green Party Members, for all their election promises, will continue in support of bad Fianna Fáil and Fine Gael housing policy. It does not have to be this way. Rental markets in other European jurisdictions function much, much better. That is what we are arguing for. That is what our amendments on Committee Stage will do. If the Minister really meant the things he says about the way he wants the private rental sector to be in the future, he would abandon the failed policies of his own party in the past, embrace the good ideas of ourselves and other members of the Opposition and create a functioning, stable and affordable private rental sector for all, something that we do not have because of him, his party and his coalition partners, but we could have if we had the change in policy that we are outlining.

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