Thursday, 19 January 2017
I want to ask when the Minister will expand the rent pressure zones and why he has taken such a softly, softly approach to the whole question. Rents are rising at a faster rate in places like Kildare, Meath, Laois and other areas adjacent to Dublin, in the suburbs of Cork and in areas adjacent to Galway, Limerick and Waterford cities but the Minister has not extended the rent pressure zones to those areas. I also ask the Minister to comment on the actual rates of rent.
When we debated this issue before Christmas, Deputy Cowen, in particular, and several other Deputies, raised the issue of the need to expand this beyond Cork and Dublin quickly. I intend to do that but I want to do it on the basis of sound data rather than on the basis of making decisions to be popular. We simply did not have the data needed, on a local electoral area basis, to be able to designate areas that are experiencing real rent pressures at the moment. They were not designated as such because the only data we had was on a local authority area basis. When the figures were aggregated, this meant that towns that had huge rental pressures did not qualify because of rural areas in the same local authority area which did not have such pressures. We will have data in the next few weeks - indeed, information is already starting to come through - that will mean we will be looking at designating at least 15 new areas, in terms of local electoral areas. We will get assessments of those areas done quickly so that we can create new designations for rent pressure zones as quickly as possible.
I gave commitments that we would do that quickly and would not delay so that people who are in areas that have real pressures will see that the Government is serious about extending rent pressure zones. The areas we are focusing on are cities like Waterford, Limerick and Galway as well as areas adjacent to Dublin and Cork city. This includes counties like Wicklow, Kildare, Meath and places on the outskirts of Cork City like Carrigaline, Ballincollig and so on. If areas qualify under the criteria with which everyone is familiar, they will be designated as rent pressure zones and the rules will apply. We will limit rent inflation in those areas to 4% annually.
The Minister said that before Christmas and the entire nation was gobsmacked when he said that there was no data to show that rents were rising, if not rocketing, in those areas. There are countless Deputies here who can attest to that and the Minister could just look at www.daft.ieon any day to see the level of rent in those areas.
I also want to ask the Minister about the rate of rent. His private rental strategy contains a proposal that has not been very well advertised, namely, to fast-track evictions on the basis of non-payment of rent. Most people get into rent arrears because rents are so high. It has been reported by the National Competitiveness Council that people are spending 41% of their income on rent. That is not sustainable, particularly for families. Obviously, for those in receipt of rent allowance, the amount they must personally pay has increased dramatically.
The Dublin Tenants Association responded to the Minister's strategy as follows: "The strategy introduces ‘fast track’ evictions for tenants who are unable to pay their rent. This is the last thing we should be doing during a homelessness crisis." It is a very strange decision on the part of the Minister.
It is not strange at all. We need to have a faster dispute resolution process for tenants and landlords. Some people in this House only want to make the case for one side of the rental debate. Of course, we need to introduce changes to protect tenants from spiralling rents and to address the matter of security of tenure to ensure that landlords are not abusing tenants, but we also need to have a policy that is balanced towards landlords. Otherwise, we will not have any landlords. My job is to introduce a balance here that can allow the rental sector to function. I must ensure that the State increases its input into the rental sector by increasing the amount of social housing that we have, while also ensuring that we have a private rental market that is functioning properly. If there are disputes, if someone breaks the law or if someone is being treated unfairly in the private rental sector, I want the Private Residential Tenancies Board, PRTB, to be able to deal with that quickly. That is all we have legislated for and that makes sense for both tenants and landlords.
The Minister gives the impression that if tenants do not pay their rent, it will take years to evict them but in fact the process at the moment is that they only have to be given 28 days' notice, plus 14 days during which they are given the opportunity to pay their arrears, regardless of how small. While I accept that there can be a variety of reasons for disputes between landlords and tenants, the main reason people fall into arrears is because their rents are rocketing and the Minister has done nothing about that. There is a 4% cap on rent increases in Dublin and Cork, but there is no such cap anywhere else. Indeed, I would argue that 4% is still quite a lot. Is the Minister going to allow wage demands of 4% to be met in order to allow people to meet rent increases?
We will always have a problem with rents as long as we continue to house low-income people in the private rental sector. That sector should be shrunk in this country, not enlarged.
This is the source of evictions, poverty and homelessness, and only when the Government starts to build public housing on the scale needed, which is in the order of thousands at this point, will we be able to stop people getting into rent arrears.
I agree we need to build thousands of social housing units, and we will do so, but it does not happen overnight. People seem to think we can turn away from a functioning rental market and just build thousands of social housing units overnight at the wave of a hand. This is just not the way it works. We are building capacity in the system to build tens of thousands of social housing units over time, but we cannot do it overnight. We must have a property sector with a balance between a functioning private rental market, where many people are happy to reside if they can get affordable rent. We need to work towards this to ensure that people who want to buy houses are able to afford to do so and live in close proximity to where they want to live and that those who need State intervention through social housing are able to access social housing in a reasonable timeframe. We are working towards all of these aims.