Tuesday, 3 November 2015
Topical Issue Debate
Private Rented Accommodation Costs and Controls
In the five years since this Government took office, private residential rents have increased by a staggering 35%. Rents have increased by 10.3% this year. This is not just causing severe hardship but is pushing families and single people into homelessness. It is for this reason that more people are becoming homeless each month. The housing shortage is the reason they stay homeless. Rent costs are the reason they end up being homeless. I have been asked for help by the parents of young children and young single people - both working and unemployed - who were fighting to hold back the tears as they presented me with letters from their landlords informing them of rent increases. Their incomes are down and the standard of their accommodation is low but the price goes up continually because landlords know they can do this. Those to whom I refer are tired of being kicked around and treated like dirt.
The only solution is to regulate the private rented market, thereby controlling rent levels now and into the future in order to ensure fairness. Sinn Féin has long called for such measures. I was pleasantly surprised when the Minister for the Environment, Community and Local Government said he wanted rent freezes to be put in place. That was 11 months ago, which was already very late in the day but at least it was something. Unfortunately, this has come to nothing and it seems clear that Fine Gael is not willing to concede any ground. It stands by the landlords.
The proposals from the Government that are being floated in the media are nothing short of pathetic. Rent regulation can work if it is properly and strictly implemented across the private rental market. It will do nothing if it is piecemeal and both Fine Gael and the Minister know that. One proposal was to put in place rent certainty on rent supplement tenancies, thereby limiting future increases available to landlords. This would only increase the number of landlords refusing rent supplement tenants and reinforce the two-tier housing system built by Fianna Fáil and continued - with gusto - by this Government. Another proposal was to increase the eviction notice period, which would do little or nothing for tenants who cannot afford their rent as that would be seen as a break in the tenancy agreement. It also fails to recognise that most tenants are not in their homes for such long periods due to the instability of the private market. A few weeks more for the few tenants with tenancies of five years or more who are being evicted does practically nothing. Requiring landlords to justify rent increases based on the market rate is another nonsensical idea and it is really just a rewording of the existing rules, which do nothing but which can be spun to sound like something.
The solution is not just rent certainty across the board to limit future increases but control measures to decrease rents right now. The Private Residential Tenancies Board should be empowered to set local standard rates with a maximum deviation based on the size of the accommodation. These standards could be imposed by existing tenants via a rent review request when one becomes available and new tenancies would be required to meet these standards immediately. Berlin has implemented a similar model with great success and there has already been a decrease of approximately 5% in rents in the city. Rents are too high now. If they were frozen, they would still be too high next year. This is the reality for all tenants in Ireland, especially those in our capital. It is up to the Government to solve this. It is not just about building homes next year. By then, many more families will be homeless, rents will have increased again and the cost of homelessness will have risen also.
I thank the Deputy for raising this matter. The structure of the property market in Ireland has changed dramatically in the past decade. In 2002, 11.4% of households and families were accommodated in the private rented sector. Today, that figure is well above 20% and it continues to grow each day. Effectively, the number of Irish households renting privately has doubled in recent years. As a society, we must adjust to that. With more and more Irish people being housed in private rented accommodation, it is vital that rent remains affordable and that people renting have an appropriate amount of protection and security in their tenancy.
The most recent data from the Private Residential Tenancies Board for quarter 2 of 2015 show that on an annual basis nationally rents were 7.1% higher than in quarter 2 of 2014. These annual rates of increase were driven mainly but not exclusively by the Dublin market. Overall, in the 12 months to the end of quarter 2 of 2015, rents were higher by 9.2% in Dublin and similarly large increases have been experienced in Cork, Galway and other urban centres. A combination of the shortage of supply in appropriate areas, continued population growth and increased levels of employment and earnings is driving this increase in rents across the State. The shortage of supply is being addressed through the Construction 2020 strategy for the building industry, which is aimed at addressing issues in the property and construction sectors and ensuring that any bottlenecks that might impede the sector's ability to scale up the supply of residential units are addressed. This is particularly necessary in the Dublin region, where both population and employment continue to grow strongly. This is placing further upward pressure on rents.
Another important element in bringing more supply on stream is the €3.8 billion in Exchequer funding to 2020 that I secured to fund the social housing strategy. This will provide 35,000 new residential units and support 75,000 households in finding accommodation through schemes such as the housing assistance payment, HAP. The implementation of this strategy is progressing well and my Department is liaising closely with local authorities to ensure that new social housing units are delivered as swiftly as possible. I have also provided funding to local authorities to take on an additional 300 staff to speed up the delivery of social housing and construction in general as they had been moved out of this space by previous Administrations.
The problems in the property market and, in particular, the ongoing situation concerning the numbers of families in emergency accommodation is deeply concerning to me and to the Government. I increased the funding allocation for homelessness services to €70 million in 2016, an rise of €17 million from this year. I also recently ordered an increase in the homeless HAP pilot in Dublin. These changes mean that families who find themselves homeless will now be able to access private rented accommodation to a value of 50% above the regular rent supplement limits in Dublin, helping many families in emergency accommodation to find suitable housing.
While these measures are all important in dealing with the current problems in the housing sector, the continuing increase in rent levels is of deep concern to me and poses a serious challenge. Working closely with my Government colleagues, I am exploring options which will give more security to tenants and families in the private rental sector.
Ultimately, the solution to the issue of the rapid rise in rents, and to the problems in the housing sector generally, will require a whole-of-Government response. While some of the levers for dealing with this problem lie outside my Department, the Government remains determined to tackle this problem in a forthright manner. Discussions on measures which will give more security and certainty to tenants are ongoing, and I believe they will conclude shortly.
I thank the Minister but it is very disappointing that he is still saying the discussions are ongoing. He has not indicated what he has in mind to tackle this out of control rental market. Many people on rent supplement end up homeless as a result of landlords putting up rents because they can get more money on the private market. We have to stem that flow and control the increases in some way, maybe through the consumer price index because not only are 5,000 people on the waiting list for homes but 80 new families a month are joining it. Many of them have come off rent supplement and the rental accommodation scheme, RAS, as a result of these increases. The solution is to build more social housing but Fianna Fáil in government started this ball rolling, relying on the private rental market. I am glad we are trying to get back to building more social housing because that will keep the rents down. However, we need emergency measures now to deal with this. The Minister does not seem to be making progress with his Fine Gael colleagues. It is very worrying that they have a vested interest in protecting a particular group.
There is also a major crisis in student accommodation because the rent has gone beyond the reach of many students. I recently spoke to a person who had a good job but could not afford private rents because they are so high. Even in other countries they have not reached these levels. There are 130,000 families on the housing waiting list, nearly double the number there were in 2008. It is scandalous.
I thank the Deputy for raising this critically important issue. There is no issue I take more seriously or spend more time on. Homelessness and housing services take up the bulk of my time as I try to ensure that people have a home and a decent living standard. It is very personal to me. This Government will do everything it can to help people. We have been caught in the perfect storm of the property crash. The industrial sector is dysfunctional. There have been years of privatisation of social housing and I agree with the Deputy on that. Local authorities also needed to be brought up to speed.
The biggest issue is the growing economy, according to figures today. It has created this pressure. There are also problems in the private rental sector because there is a small percentage of unscrupulous landlords. There are real estate investment trusts, REITs, buying up property and announcing they will have annual returns, which are not sustainable and in some cases are morally unacceptable. We need to ensure that tenants are protected and that their rights are promoted, that they have security and certainty. I am working with my colleagues to ensure that is put in place and that we will have measures in the near future to ensure they are protected.
I compliment the Dublin Regional Homeless Executive, Cathal Morgan and all his team. The Deputy will agree they do a fantastic job. I meet and speak to Cathal regularly. He also agrees with me that dealing with the rental sector is paramount and the most important issue facing us, given the issues he deals with day in, day out, in Dublin. Other people working in the sector have made similar comments.