Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 43: To ask the Minister for the Environment, Heritage and Local Government if his attention has been drawn to the fact that under the Residential Tenancies Act 2004, landlords are only permitted to raise rents once a year; if his attention has further been drawn to the fact that rents rose by an average 10% in 2006 with some people experiencing 20% increases; and the plans he has to rectify this situation by introducing a new system of rent caps. [28621/07]

Batt O'Keeffe (Cork North West, Fianna Fail)
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The Residential Tenancies Act 2004 provides that rents in the private rented sector cannot be set higher than the open market rate and that rent reviews cannot normally occur more frequently than once a year. Any tenant who considers that the rent sought exceeds the market rate or who has a complaint about a rent review can refer the issue to the Private Residential Tenancies Board for resolution. These and other provisions of the 2004 Act are based on recommendations of an independent commission on the private rented residential sector. The commission carefully considered and rejected all forms of rent control, which it found to have generally been counter productive.

The Central Statistics Office rent index indicates that rents in the private rental sector have increased by 12% in the 12 months to October 2007. However, the longer-term trend is relatively moderate with an annual average increase over the five years from October 2002 to October 2007 of 2.4% per annum.

It is a function of the PRTB to review the operation of the relevant legislation, particularly the provisions relating to rent, and to make recommendations regarding any amendments considered necessary. There are no proposals currently to amend the provisions relating to rent levels.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Threshold has stated that the poor were affected most by rent increases, particularly those dependent on social welfare payments. Those people will be squeezed out of the private rental market, but there is now a smaller social housing stock, so this will create overcrowding and homelessness. Will the Minister of State ask the PRTB to look again at the system of rent caps? There is an upward trend for rent, while the price of housing has dropped substantially, sometimes by up to 30%.

What steps can be taken to ensure that those who are availing of rent allowances do not have to top up in the black economy by paying cash to landlords? These people are under pressure because there is no other accommodation available to them. What steps will the Minister of State take to ensure that tenants are aware of their full rights for rent reviews under the 2004 Act?

Batt O'Keeffe (Cork North West, Fianna Fail)
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Rent is generally set on the open market. It has regard to the rents charged in equivalent properties in its area. If people feel that the rent is excessive, then they have the right to refer the matter to the board, which has the right to order a reduction in that rent. However, only 1% of all cases referred to the PRTB in 2006 dealt with rent, which is an interesting figure. If a cap was put on rents between 2002 and 2005, many of those in rented accommodation would not have benefitted from the serious reductions that took place. In other jurisdictions where caps were put in place, the experience has been that it has not worked in the interest of the person renting.

The Government is anxious that enough housing units are available. Up to 700,000 new housing units have been built in ten years which means there is adequate availability of rented accommodation.

Ciarán Lynch (Cork South Central, Labour)
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The basis of the question is the issue of standards in the renting market. While landlords can increase rents, there is no measure to increase property standards because of the absence of a licensing system. Local authorities operating the rental accommodation scheme have informed me that when tenants move from rent allowance to the rental accommodation schemes, the properties available to them are not up to scratch. There is a standard in the rental market for rent allowance recipients. As Deputy Ó Snodaigh stated, the State is subsidising substandard properties and is party to these rent increases.

Does the Minister of State intend introducing a licensing system that will guarantee core requirements of whatever rent is set? Is he aware that with the roll-out of the rental accommodation scheme, properties being let out through the HSE do not have the same standards as those properties available to rent allowance recipients?

Batt O'Keeffe (Cork North West, Fianna Fail)
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The important issue raised by the Deputy is that of standards. The Department is anxious that the standard of accommodation is raised to improve the lifestyle of those renting. Recently, I increased the amount of funding to local authorities to examine rental properties and ensure they are up to scratch. There has been a significant increase in local authority inspections in 2006 with 9,835 inspections reported, an increase of 44% from 2005. I have allocated moneys on the basis of target inspections from local authorities. Local authorities putting an emphasis on inspecting private rented accommodation, ensuring it is up to standard, will be rewarded with more funding. There was a 50% increase in the amount of funding given this year.

The system of rent supports is a matter for the Department of Social and Family Affairs. An agreement was reached——

Ciarán Lynch (Cork South Central, Labour)
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With respect to the Minister of State, when will he introduce a licensing system? Will he answer the question?

Batt O'Keeffe (Cork North West, Fianna Fail)
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——and an increase that will take from mid-2007 to June 2008.

Ciarán Lynch (Cork South Central, Labour)
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Will the Minister of State put the script down for a second and answer the question?

Batt O'Keeffe (Cork North West, Fianna Fail)
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This will be an adequate amount of money as deemed in this arrangement.

Ciarán Lynch (Cork South Central, Labour)
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I got no answer to my question. I will keep my supplementary concise. Does the Minister of State intend to introduce a licensing system with regard to standards in the private rented sector?

Batt O'Keeffe (Cork North West, Fianna Fail)
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There is a system already in place that anyone renting private accommodation must be registered. If they are not registered, they are breaking the law.

Ciarán Lynch (Cork South Central, Labour)
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On a point of order, that is a registration system, not a licensing one. They are two different matters.

Batt O'Keeffe (Cork North West, Fianna Fail)
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Accommodation that is not up to scratch should be reported to the Private Residential Tenancies Board, PRTB, which will ensure registration and that the property in question meets the required standards. If those are not met, penalties can be imposed by the board.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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That is if they answer the telephone in the PRTB.

Ciarán Lynch (Cork South Central, Labour)
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At the risk of being out of order——

Brendan Howlin (Wexford, Labour)
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I would not want to encourage that.

Ciarán Lynch (Cork South Central, Labour)
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——and with respect to the Minister of State, he is either being evasive or he does not understand his brief. The point is that one system is registration and the other is licensing. When the PRTB was established, it deliberately avoided the licensing system. A licensing system manager may not be a role for the board but does the Minister of State intend to introduce such a system? If I leave a dog at boarding kennel over the weekend, it must be licensed for standards. However, it is not the same for rented accommodation. The State is ploughing millions of euro through the rental accommodation scheme and rent allowance but there is no set standard because of the absence of a licensing system.

Batt O'Keeffe (Cork North West, Fianna Fail)
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Obviously, the Deputy has not listened to the answer. It specifically states that it is a function of the PRTB to review the operation of the relevant legislation, particularly provisions relating to rent and to make recommendations and amendments that are necessary.

Ciarán Lynch (Cork South Central, Labour)
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The Minister of State should stop being a public relations man and give an answer.