Jan O'Sullivan (Limerick City, Labour)
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48. To ask the Minister for Housing, Planning, and Local Government if the cities of Limerick and Waterford will be included in the rent pressure zones in view of the rate of increase in private rents in both cities over the past year; and if he will make a statement on the matter. [54554/18]

Jan O'Sullivan (Limerick City, Labour)
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I raise the exclusion of the cities of Limerick and Waterford from rent pressure zones as a result of the formula used. It is over two years since the legislation passed that set up the system of identifying areas that qualify as rent pressure zones. In the past year, whether one looks at the daft.ieor RTB rent indices, Limerick city has the highest rent increases of any city in the country. They are way higher than Cork and Galway, for example. Will the Minister take action to ensure Limerick and Waterford can be included in rent pressure zones?

Eoghan Murphy (Dublin Bay South, Fine Gael)
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Section 24A of the Residential Tenancies Act 2004, as amended, provides that the Housing Agency, in consultation with housing authorities, may make a proposal to the Minister that an area should be considered as a rent pressure zone. Following receipt of such a proposal, the Minister requests the director of the RTB to conduct an assessment of the area to establish whether or not it meets the criteria for designation and to report to the Minister on whether the area should be designated as a rent pressure zone. For the purpose of the Act, "area" is defined as either the administrative area of a housing authority or a local electoral area within the meaning of section 2 of the Local Government Act 2001.

For an area to be designated as a rent pressure zone, it must satisfy the following criteria set out in the Residential Tenancies Act 2004 and the Planning and Development (Housing) and Residential Tenancies Act 2016: the annual rate of rent inflation in the area must have been 7% or more in four of the last six quarters and the average rent for tenancies registered in the area with the RTB in the last quarter must be above the average national rent. The most recent average national rent available for this purpose is taken from the third quarter of the 2018 RTB rent index report which records an average national rent of €1,122. Local electoral areas in Limerick and Waterford cities do not currently fulfil the rent pressure zone designation criteria under the legislation. The Housing Agency will continue to monitor the rental market and may recommend further areas for designation. Where, following the procedures set out in the Act, it is found at a future date that additional areas meet the criteria, they will be designated as rent pressure zones.

Jan O'Sullivan (Limerick City, Labour)
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I want to pursue the detail of this. If one looks at the rent index published by the RTB in December, just before Christmas, Limerick city west and Limerick city east both have average rents of over €1,000. In the case of Limerick city east, it is €1,103.57. The national average is €1,122. They both meet the criteria for the number of quarterly increases of over 7%, which is required under the legislation. They are almost there in both cases. Both of those local electoral areas include rural areas which have low rents. As I understand it, the Minister can make regulations that would use electoral districts rather than local electoral areas to determine inclusion in rent pressure zones. I ask the Minister to look at it. I took two of the three Limerick city local electoral areas, both of which have very high rents in places like Dooradoyle and Castletroy. They are areas where rents are very high, where there are quite a large number of rental properties and people are under huge pressure. If the formula was applied to the district rather than the local electoral area then those areas would qualify because the rents are higher than the national average and they have more than reached the 7% increases in four of the last six quarters. After two years of this legislation, I ask the Minister to review the process so renters in Limerick can have the pressure taken off them.

Eoghan Murphy (Dublin Bay South, Fine Gael)
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I note the positive, which is an acknowledgment by the Deputy that rent pressure zones are working, hence the request that additional areas be included in them.

Jan O'Sullivan (Limerick City, Labour)
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There were some qualifications to it.

Eoghan Murphy (Dublin Bay South, Fine Gael)
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Why would the Deputy want them to be in rent pressure zones if she did not think rent pressure zones were working? That is the logic of the request. In quarter three we saw a difference between existing tenancies and new tenancies which showed that further work may be required on rent pressure zones. The picture is not necessarily consistent within rent pressure zones. The Deputy is right to point to Limerick. Unfortunately the legislation does not allow for rents that are almost there as it is currently drafted. When one looks at Limerick and the data from quarter three of 2018, we see that in five quarters out of the previous six Limerick city west and Limerick city east recorded an increase of more than 7% but Limerick city north did not, with lower rents there. We saw a similar picture in Waterford in that not all parts of the city recorded increases in four quarters out of the previous six to allow them to be designated under either of the criteria let alone be designated under one of them. We are seeing significant rent pressures in areas like Limerick that are outside of rent pressure zones but the legislation as drafted does not allow for me, the Housing Agency or local authorities to take a different approach.

Jan O'Sullivan (Limerick City, Labour)
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Will the Minister either change the legislation, which would be a very small change, or introduce regulation under the legislation? It is not fair. If one looks at the areas in Dublin, by and large an urban area is an urban area. A local electoral area is either rural or urban but if one looks at a place like Limerick or Waterford, both have extensive rural parts of their counties included in the local electoral areas we are talking about. It means renters in the urban parts of those local electoral areas have to put up with really high rent increases that are causing homelessness. The Minister needs to look at it.

I remember the Minister's predecessor stating that he expected parts of Limerick to be included in the rent pressure zones very quickly. There is clearly a need to look at this again. We passed this legislation at some ungodly hour of the night in December 2016.

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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Deputy Kelly was Minister at the time.

Jan O'Sullivan (Limerick City, Labour)
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We argued over the formula and had to amend it because it was wrong. It is now determining that people are not protected from rent hikes. I ask the Minister to look at it again.

Eoghan Murphy (Dublin Bay South, Fine Gael)
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We have to be very careful about our approach in this regard. One of my predecessors gave a signal to the market that he was going to do something about rents. It did not happen but during, I suppose, what one might call the period of dithering, rents increased quite dramatically to the detriment of tenants. What we have are rent pressure zones that were brought in under legislation. We cannot take an "almost there" approach; we have to follow the law as it is drafted. Rent pressure zones are still new in the scheme of things but have been shown to work in those areas where they are being implemented for existing tenancies. We have to be very careful of all the data we receive from the RTB, including the data that tell us we are losing landlords. Since 2015, we have lost over 1,500 landlords. Some of them own more than one property, which means even more tenancies than that have been affected. In everything we do, we have to make sure we are protecting the tenant as best we can. We are not protecting a tenant if we are bringing in measures that are forcing landlords out of the market. That would be making the situation worse.

Jan O'Sullivan (Limerick City, Labour)
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I am not asking the Minister to do that; I am asking him to be fair.

Eoghan Murphy (Dublin Bay South, Fine Gael)
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We have to be careful how we consider matters. We have to ensure that everything we do is based on sufficient data in order that we might be sure our actions are in the best interests of all those experiencing housing pressures at the moment.