Gerald Nash (Louth, Labour) | Oireachtas source

I welcome the opportunity to speak on this legislation. As I think the Minister of State pointed out, it is one of several interventions this Government and the previous one have sought to introduce to address issues we raise consistently, in this House and beyond, in respect of the enormous difficulties facing our society and our economy in the area of housing provision due to a lack of affordable housing, housing supply and high rental costs. Deputy Gould articulated it very well. He speaks for all of us, that is, both Teachtaí Dála in government and those in opposition. This is the issue that dominates our work on behalf of those we represent. I have seen this grow exponentially, and I mean that in the true sense of the word, over the last three to four years. We are in crisis. A day does not go by when I am not contacted personally, when my office is not contacted or when I am not stopped on the street, as I was this morning by a woman I know very well who is caught in this trap. She is in deep despair because she and her family simply have nowhere to go. I welcome any initiative that seeks to intervene in the rental market and dampen down rent increases.

The last intervention the Minister, Deputy Darragh O'Brien, made was obsolete almost as quickly as it was passed. He was warned that would be the case. We knew it would be. However, the Minister chose not to listen. It would be churlish of me not to recognise a cap on rents of 2% represents a degree of progress. If we consider that inflation in October was at 5.1%, an 11-year high, and has grown consecutively over the last 11 months, and that rent inflation is way in excess of that then at the very least a move to cap rents at 2% represents a degree of progress. However, it is nowhere near enough given the scale of the current rental crisis. Earlier this week my colleague, Senator Moynihan, pointed out that under the proposed legislation landlords will be allowed to hike rents in excess of current caps by combining years where they have not increased the rent, to put it in plain terms. That is another loophole designed for landlords before the legislation has even passed. On behalf of the Labour Party, I look forward to identifying ways we can address that problem on Committee and later stages. What renters need is no more delays to a comprehensive solution to this very manifest problem. What they need, and what we need as a society, is a plain and simple rent freeze like the one introduced by the then-Minister, Deputy Kelly, back in 2015. It is possible.

We know a precarious rental market leads to precarious lives. It leads to a precarious economy and to a precarious society. People need security. It is a basic human demand and inbuilt in the human condition, especially at this time. However, no-one can plan for a future where rent increases are forcing people from their homes. We often speak about housing in a social context and that is the right one in which to discuss and debate it most of the time. However, even if a person is not interested in the provision of public housing, affordable housing or rent controls, or his or her ideology insists he or she is not, that person may still have an interest in how our economy operates. We know the biggest issue facing the competitiveness of our economy is the one around the provision of affordable housing and housing supply more generally. If people do not want to listen to me, they should take the advice of IBEC, the American Chamber of Commerce and a range of think tanks that have reminded this Government and its predecessor of the impact a lack of supply of housing and the crisis situation we are having at the moment is having on workers, businesses and on our economy more generally.

We are also aware of the impact it is having on our young people. I recently read the story on rte.ieof 21-year-old Ciara Moroney who makes a one and a half-hour journey each way from her family home in Drogheda to college in Dublin. It is a journey, she states, that costs both money and time. Ciara, like many other students across the country, has no choice. Students like her must commute such distances from Drogheda or even as far away as Dundalk each day because they simply cannot afford skyrocketing rents in the capital. This creates a massive, if often silent, form of social inequity whereby those students privileged enough to live in the capital or on campus get the complete college experience and the development of the networks they will enjoy in later life and all that involves, while others are left living at home with their parents on a Thursday night. In short, this serves to perpetuate the class conveyer belt prevalent in this country and prevents real social mobility here, which has been pointed out by the OECD and others. This contrasts with the more universal student experience of peers in other EU countries like Denmark and Sweden, which we like to compare ourselves with when it suits us. In those countries, students can avail of affordable rents and secure tenancies in purpose-built student accommodation no matter what a student's background or income is. Alternatively, they can avail of private sector rents that are properly-controlled, fair, reasonable and secure. Instead, what is proposed in this legislation is another set of meek half-measures. It really is no surprise that Ireland has among the highest rates of people in their 20s living at home during the past decade. That really contrasts with the experience in Nordic countries and elsewhere in other states that may be regarded as progressive across the European Union.

We have had RTB and daft.iereports released in recent months which show rental inflation hitting 7% nationally with very worrying trends outside our urban areas too. This is not a phenomenon restricted to the kinds of urban areas I represent. There is nowhere in the country where rent has not at least doubled since the bottom of the market back in 2013. That is an objective fact. I represent County Louth and part of County Meath. They are two of the ten counties that now have average standardised rents well in excess of €1,000 a month. Louth alone saw rent increases of 6.2% as of quarter 2 of 2020. According to a daft.iereport published earlier this year, the cost of renting a home across Louth has continued to rise at an average of €1,311 per month. The position is much more acute in my own home town of Drogheda and the area of south Louth and east Meath. There is a dichotomy within what is a small geographic area. Rents in my area are much closer to those in Dublin than those experienced in the north of the county, challenging as they are to meet.

Different methodologies are used by different organisations but it is fair to say the trends are clear. We are in a period of very high rental inflation driven by what the Central Bank and others have called supply-side bottlenecks. In other words, there are not enough homes. Put simply, these rent increases are in large part driven and exacerbated by the extraordinarily weak availability of rental accommodation in the country, highlighted earlier by Deputy Ó Broin. That brings us back to the ultimate issue in the housing system, namely, a shortage of housing, be it public, private, affordable or long-term secure rental.

All that brings me back to the next point. While the measures proposed in this Bill might be reasonable in the context of a functioning rental market, the interventions the Minister of State describes in the legislation and that are provided for, do little to solve the immediate crisis of out of control rents. Quite frankly, we need to do the following things. We will remind the Government again what needs to be done. We need to declare the whole country a rent pressure zone. We need a three-year rent freeze, akin to the form of rent freeze introduced in 2015. We need to resource the RTB properly to proactively enforce this.

On the first two points, we have to remember that the proposed 2% annual increase per year is coming at a time rent is already sky high and completely out of sync with wages and the direction of travel of wages. For instance, the gap between the national minimum wage and the living wage continues to increase. How will someone on the national minimum wage, or on low pay generally, be able to afford a 2% rent increase when he or she can barely scrape together enough money to pay the rent as it stands?

It is clear we have to now come strongly down on the side of rent freezes, even for a limited period. Put simply, while inflation rises, we need to introduce maximum rental prices, which will be a proper freeze for a period of time. The Minister of State will say it cannot be done - he has said it previously and the Minister, Deputy O'Brien, says it repeatedly - and that it is unconstitutional and simply impossible. That is not the case. It has been done before and can be done again, if the political will is there. I remind the Minister of State that, when it came to the crunch, it was done during the Covid-19 pandemic. The Department found a way to make it happen, thankfully. That was a very important intervention. We have to again find a way to make maximum rent controls happen.

These controls should not be set in line with, or dictated by, a dysfunctional rental market, which is where we are at present. They need to be set according to the needs of workers and linked directly to wage rates, in addition to the behaviour and direction of travel of wages. That can be done. No full-time worker in this country should be forced to pay more than 30% of their income in rent. That should be the rule of thumb, which was the case, generally, over the years and was considered reasonable by some.

In addition, it is clear there is blatant non-compliance with rent inflation caps and an imbalance between renters and landlords. Frankly, that is the cause of this issue. Enforcement is key. I recall the Fianna Fáil party manifesto and discussions at the time - I am sure the Minister, Deputy O'Brien, will be familiar with this and that it was placed in his manifesto - that 200 additional staff would be in place at the RTB to deal with the issue of enforcement and so on. We will watch very closely to see how the RTB is resourced to enforce the new swathe of legislation that has come from the Department in recent times.

In the context of a market with unprecedented scarcity, I reiterate my party's call to Government to increase renters' rights and to put some power back in their hands. As part of this, the Government must ask that build to rent, BTR, standards are reviewed to include balconies and facilities for more long-term living, as described in the renters' Bill introduced by Deputy Bacik and Senator Moynihan. Building poor-quality housing does not allow people to live there comfortably in the long term. I was never comfortable with any of the changes made in recent years to building standards. I made that point at the time. That ought to be addressed. We need to empower renters to make them feel that their house is their home, tackle the affordability crisis and fundamentally change how we think about renting in this country.

We will not oppose this Bill, but that does not necessarily mean we are giving it our imprimatur either. There is a significant difference. We will outline amendments we believe will improve the situation for renters in the context of this Bill on Committee Stage. We are happy to work constructively, as are other Opposition parties, to make the case for those amendments and to work with the Minister of State and the Minister on them. I hope that the Minister of State and the Minister will ultimately choose to take real action to address the rental inflation crisis. In our view, that can only happen with an across-the-board extension of a longer-term rent freeze and not rent caps.

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