Friday, 3 December 2021
Residential Tenancies (Amendment) (No. 2) Bill 2021 [Seanad]: Second Stage
I move: "That the Bill be now read a Second Time."
I am grateful to the Chair and to all Deputies for facilitating debate on this urgent rental legislation in Dáil Éireann. I also wish to record my thanks to the Chief Whip and to the members of the Joint Committee on Housing, Local Government and Heritage for enabling the Residential Tenancies (Amendment) (No. 2) Bill 2021 to be read a Second Time here, following its passing in the Seanad last week.
I am asking the House to pass the Bill to enable its early enactment to provide for the transition to providing residential tenancy protections on the basis that any new tenancy that commences six months or more from the passing of this Bill shall continue as a Part 4 tenancy for an unlimited duration, unless terminated within the first six months of its commencement; amendment of the current prohibition on any rent increases in a residential pressure zone, RPZ, from exceeding general inflation, as recorded by the harmonised index of consumer prices, HICP, to insert a new condition that the last rent set cannot inflate by more than 2% per annum pro rata; and a temporary fee waiver in the immediate aftermath of the roll-out of the requirement for annual registration of tenancies with the Residential Tenancies Board for certain tenancies registered.
The Government is particularly keen to enact and bring into operation the new rent increase caps in rent pressure zones without delay. The most recent HICP inflation data for Ireland shows an inflation rate of 5.1% for October 2021 and the November data is due to be published in mid-December. The fast-rising inflationary trend requires fast counter-action by Government. This Bill, once enacted, will stop rent inflation beyond 2% per annum in RPZs.
It is not lost on me that this is the sixth time since the formation of the Government that we have asked Dáil Éireann to amend our residential tenancy laws urgently. Most recently, the Residential Tenancies (No. 2) Act 2021 introduced new measures in July 2021 to better protect tenants with affordability challenges by extending the operation of RPZs until the end of 2024 and prohibiting any necessary rent increases in an RPZ from exceeding general inflation, as recorded by HICP.
The link to HICP aims to safeguard continued investment in the sector by existing and new landlords to deliver the much-needed supply of high-quality rental accommodation, while protecting against significant increases in rental inflation in the coming years.
When introducing these measures, the Minister was clear on the need to monitor inflation carefully. At that time, inflation had averaged 0.73% per annum over the previous three years. We needed to revise the RPZ rent control relatively quickly in July on a basis that could be independently verified. The quarterly economic commentary for autumn 2021 of the Economic and Social Research Institute, ESRI, outlines that despite the ongoing effects of the Covid-19 pandemic, both domestic and foreign sources of growth have contributed to the Irish economy's robust performance in 2021. As public health measures are eased considerably, the ESRI anticipates a return to more normal economic activity by the end of the year. The recovery has contributed to inflationary pressures, along with global supply chain problems and energy prices. While the current expectation is that these factors are largely temporary, further domestic inflationary risks remain relating to the rapid recovery in household spending. At this juncture, the ESRI expects that inflationary pressure will peak in quarter 4 of this year and then abate during 2022. However, the ESRI also cautions that any sustained easing of the inflation rate could be compromised by a continuation of global price pressures for energy products, as well as by a faster than expected recovery in the domestic economy.
Section 3 of the Bill aims to address the rent affordability challenges that are building on foot of the unexpectedly fast-rising inflation rate by introducing a cap on rent increases in RPZs of 2% per annum to operate in conjunction with the current restriction based on HICP inflation. As Minister of State, I only want to see the supply of rental accommodation increase, and thus I intend to implement legally and economically sound policy proposals onto the Statute Book. Every action the Government takes in the rental sector causes a reaction. We must also recognise that the very tenants whom we are trying to help could be left worse off if the wrong policy choices are made.
With the time available, I will outline the specific provisions of the Bill, which contains eight sections.
Sections 1 and 8 contain standard provisions dealing with definitions, the Short Title and collective citation of the Bill.
Section 2 provides a consequential technical amendment to section 6 of the principal Act, which relates to the service of notices.
Section 3 amends section 19 of the principal Act in the context of the setting of rent subject to a maximum permissible rent increase in an RPZ. This proposed section, if passed, would amend the current prohibition on any rent increase in an RPZ from exceeding general inflation as recorded by HICP to insert a new condition that the rent set increased by more than 2% per annum pro rata. This will mean that rents may only increase by the rate of recorded HICP inflation or 2%, whichever is lower. The new cap on rent increases in RPZs is considered necessary, given the prevailing high level of inflation. An inflation rate of 5.1% was recorded in the year to the end of October 2021. With inflation on the rise, the original 4% rent increase restriction provision in RPZs has been breached by reference to the October HICP values and is likely to also be breached by future HICP values into 2022.
The operation of the new 2% cap will be subject to a review after 12 months, with a written report to be provided to the Oireachtas after a further three months. This amendment of the principal Act also provides for the deletion of the Minister’s power to prescribe an index other than the HICP for the purposes of restricting rent increases in RPZs. This power is no longer necessary, given the new provision of the 2% per annumpro ratarent increase cap. Consequential technical updates are also provided for.
Section 4 of the Bill provides technical referencing amendments consequential to section 3, section 22 and Schedule 2 of the principal Act.
Section 5 proposes to amend Part 4 of the principal Act, regarding security of tenure, to provide for enhanced tenancy protections on the basis that after six months duration a Part 4 tenancy is established for an unlimited duration, and not subject to expiry at the end of a six-year term should the landlord exercise his or her right to terminate the tenancy as currently provided for under section 3B of the Principal Act. This is a commitment under Housing for All - a New Housing Plan for Ireland, and is being addressed in accordance with the advice of the Attorney General and taking account of constitutionally protected property rights. The provision will apply prospectively in respect of tenancies commencing six or more months after the passing of this Bill. The intention is to enhance security of tenure for tenants and to simplify the operation of the 2004 Act.
In addition, where any existing six-year Part 4 tenancy is renewed, rather than commencing a further Part 4 tenancy, it will become a tenancy of unlimited duration. Existing tenants may also seek the consent of their landlord to have their current tenancy treated as a tenancy of unlimited duration. However, the landlord will not be compelled to grant his or her consent. Where consent is not granted, the existing protections of the Act will apply. The aim is to transition to tenancies of unlimited duration, while respecting the constitutionally protected rights under section 4 of the Residential Tenancies Acts, 2004 to 2021. Only new tenancies commencing six or more months after the passing of this Bill must be on the basis of an unlimited duration. Naturally, however, all Part 4 tenancies over time will be of unlimited duration. As existing and further Part 4 tenancies terminate, expire over time or are renewed, this process will involve the creation of a new tenancy of unlimited duration in respect of a dwelling, should it remain in the rental sector.
Section 6 provides for technical amendments to sections 3, 29, 30 and 64B of the principal Act to reflect the transitions to tenancies of unlimited duration. In particular, the amendment to section 64B provides that the duration of tenancy under any tenancy of unlimited duration and under any preceding Part 4 tenancy and-or further Part 4 tenancy would be treated as one tenancy in calculating any termination notice to be given. This is an important technical amendment to maximise the tenancy termination notice period to be given to a tenant. Section 6 will commence at the same time as section 5, namely, "on the day that falls 6 months after the date of the passing of" the Bill.
Section 7 amends section 134 of the principal Act, regarding the obligation to apply to register a tenancy, to provide that, subject to conditions, where a landlord applies to register a further Part 4 tenancy before the commencement date of the requirement for annual registration under sections 22 and 23 of the Residential Tenancies (Amendment) Act 2019, regarding a commencement date expected in quarter 1 of 2022, and where that tenancy still exists on that date, no annual registration fee shall apply in respect of that further Part 4 tenancy only. Any new tenancy of unlimited duration that commences will be liable to an annual registration fee.
To be eligible for the temporary fee waiver, any outstanding registration fee associated with the relevant application to register a further Part 4 tenancy prior to the roll-out of the annual registration must be paid within one month of the commencement of the requirement to register tenancies annually. The temporary annual registration fee waiver is being provided for existing further Part 4 tenancies in recognition of the registration fee payments already made to date in respect of relevant tenancies. The intention is to commence section 7 of the Bill at the same time as the commencement, in quarter 1 of 2022, of the requirement under sections 22 and 23 of the Residential Tenancies (Amendment) Act 2019 for annual registration of tenancies with the Residential Tenancies Board, RTB.
As legislators, we have shown how we can work together quickly and react to suppress the spread of Covid-19. In that spirit, I again thank Deputies for all their co-operation on this Bill, which will make a real and significant improvement for renters upon enactment. I commend the Bill to the House.
As the Minister of State knows, I like to think of myself as a very reasonable person and as somebody who will genuinely listen to the arguments the Government puts forward for the various measures it introduces. When it does something right, I will support it, when it does something poor, I will not oppose it, but I will highlight the inadequacies, and then, on many occasions, when I believe the Government is doing the wrong thing, I will oppose it.
I know this is the season of goodwill but any renter watching the debate so far and who understands the provisions of the Bill can only come to two conclusions. The first is this Government has no notion whatever of what is going on in the private rental sector, specifically in terms of the enormous pressure on renters facing ever-increasing costs of living. At the same time there is a dramatic and non-stop loss of private rental properties from the bottom and middle end of the market. The idea that bringing six pieces of exceptionally poor amending legislation to the Residential Tenancies Act is suggesting this Government is doing something right is further evidence. All of these minor changes, while marginally less worse than the previous set of changes, do nothing to tackle problems but simply add to the confusion out there. The only sentence from the Minister of State's speech that resonated with me was that which referred to the wrong policy choices having the wrong consequences. That is exactly what this and the previous Government have been doing with the private rental sector for so long, and it is why we are in the mess we are in.
A report in The Irish Timespublished just two hours ago indicates this State is the sixth most expensive place in the world in which to rent. Dublin is the third most expensive capital city in the European Union in which to rent. That is the reputation of our rental sector globally. Looking at the most recent Daft.ie report for new rents rather than existing rents for the third quarter of this year, average rents across the State are indicated at €1,500 per month and average rents in Dublin are indicated at over €2,000 per month. On the basis of affordability that puts rent at approximately 30% of net disposable income, people need take-home pay of either €4,500 outside Dublin or over €6,000 in Dublin in order for that average rent to be affordable for a household. That is just out of this world.
Looking at the most recent RTB data, including existing and new tenancies, the picture is not much better. We are still seeing State-wide averages of €1,300 and in Dublin averages of €1,800. A report commissioned by Dublin City Council and produced by KPMG is included as an appendix in the county development plan, which means it is very significant research, and it looks forward to what will happen with housing supply and costs over the next number of years. Based on all the most up-to-date data, including the Government's targets in the new housing plan, it indicates that over the next number of years average rents in Dublin will rise to €2,400 per month, meaning people will need take-home pay of €7,000 for that to be affordable. That is the scale of the crisis facing renters, which is why the bottom line for our party is that renters simply cannot take any more rent increases. They do not have the money, and that is the central problem.
Meanwhile, despite the talk about wanting to increase supply, since 2017, quarter on quarter, landlords and rental properties are leaving the market. These are predominantly accidental and semi-professional landlords taking advantage of positive equity in the market but we have lost over 20,000 rental properties at the bottom and middle end of the market in the past number of years. There is no plan from the Government to deal with this disorderly exit of the properties. At the same time, the new stuff coming into the market is high-end, poorly designed build-to-rent properties way beyond the reach of ordinary working people. Of course, it is one of the main reasons homelessness has started to increase again.
On the other hand, the Government's over-reliance on the private rental sector to meet social housing need because it is not building enough social houses itself means the housing assistance payment, HAP, in particular, but also the rental accommodation scheme, RAS, are absorbing far too much of what little rental supply is out there. The homeless HAP is particularly necessary for people experiencing homelessness but it is inflating rental prices even further.
There is a crisis in the private rental sector like we have never seen before but what is the Government bringing forward? With the rent pressure zones, it has brought forward an appallingly weak proposition. With tenancy security, meanwhile, what the Government is claiming is simply not true. A polite way of describing it would be "dishonest" but I could think of more forceful words. I will explain that with relevant data in a moment.
On the 2% provision, I should first say that 2% is mad because renters cannot afford 2%, 1% or 0.5%. If somebody is paying €1,600, €1,700, €1,800, €1,900 or €2,000, any percentage of an increase is completely unacceptable. The Government has not told people it is seeking to reverse a slightly positive change that the Minister, Deputy Darragh O'Brien, introduced in the previous Residential Tenancies (Amendment) Bill, meaning landlords will again be able to accumulate year-on-year rent increases if they had forgone them before. If, on the passage of this Bill, I am in a rental property and the last rent increase was in 2016, the actual rent increase that the landlord will be able to hit me with is not 2% but rather the inflation rate from 2017 to now, which is 5.6%, because that is lower than the 8% figure from using the 2% calculator. The Government is not capping rents at 2% at all for tenants who did not receive rent increases in previous years despite the Minister promising to get rid of that loophole; he got rid of it but only a few months later the Government is ripping up that provision and throwing it in the bin.
On top of this, the cap will not work anyway because RPZs have never worked. First, the cap does not apply to the third of rental tenants outside RPZs or the new stock coming to the market. It is impossible to police between tenancies, or when one tenant moves out and another moves in while the landlord charges above the limit. I want to be very clear that large numbers of landlords obey the rules but there is too much scope in the RPZ process for them not to do so. On that basis, not only is this legislation a bad idea if it did work but it is an exceptionally bad idea, because like its predecessors, it will not.
Let me deal with the Government's claim of introducing so-called tenancies of unlimited duration. It is not what is in this Bill and it is simply not credible to come here and say that. A tenancy of unlimited duration occurs if I sign a contract and the deal is that so long as I pay my rent, maintain the property and avoid engaging in antisocial behaviour, my tenancy is secure indefinitely. This would eliminate no-fault evictions and it is a standard procedure in almost any other civilised rental market.
The Government, meanwhile, is seeking to remove a small technical provision of the Residential Tenancies Act whereby at the end of a six-year Part 4 tenancy, a landlord cannot evict without grounds. I have no problem with its removal. According to the latest data I have from the RTB, for the past three years only 3% of notices to quit have been on what are known as section 34(b) grounds, or the grounds the Government is seeking to remove. Meanwhile, 77% of all notices to quit are on two other grounds, which relate to sale of property and use of property by a landlord or a landlord's family member. So long as those two provisions remain on the Statute Book, tenancies of unlimited duration will not exist in this State; that is a fact and not an opinion.
If we go to other more civilised and better regulated rental markets, we can see that people would rent a property, abide by the contract and get to stay. If the landlord wants to sell, he or she can do so with the tenant in situand the tenant cannot simply use the property for a family member because it is ultimately a rental property and not for mixing and matching between private residential and private rental.
It is time for the Government to be honest with people. It is making a small and technical amendment to the legislation. Yes, it is acceptable but it is nowhere near what is required to give tenants security of tenure. If the Government was serious, it would get rid of those other parts of section 34 of the Residential Tenancies Act. We can provide an opportunity for the Minister to do that on Committee Stage with our amendments. As the Minister of State made clear with his very questionable remarks in the Seanad about blood being thicker than water, he has no intention of doing that whatever.
The claim we cannot have real tenancies of indefinite duration because of the Constitution is bogus. It is the most bogus use of the private property protections in the Constitution I have ever heard. The Constitution protects people's right to the property itself but it in no way limits how the State regulates the use of that property, as we know from planning permission, zoning and this legislation. Unless the Government is willing to publish the advice from the Attorney General, which I doubt has been properly drafted, I will continue to believe the claim is bogus. Such action will not happen not because it is not legally possible but rather because the Government does not have the will to introduce what it now claims it is introducing, which are tenancies of indefinite duration. Shame on the Government for repeatedly claiming it is doing something it patently is not.
The other provision of the Bill is very technical and straightforward and I have no objection to it. If somebody has already paid the registration fee under the old rules, they should not have to pay an annual fee until the Part 4 tenancy expires. I have no objection to any of that. We have worked constructively with the Minister of State on the Maritime Area Planning Bill 2021 and we have worked constructively with the Minister, Deputy Darragh O'Brien, on the Planning and Development (Amendment) (Large-scale Residential Development) Bill 2021. Sinn Féin will not oppose this Bill but do not take that for a single second as evidence we believe anything in this is either good or what is required. It absolutely is not.
What do we actually need if the Government is serious about wanting the kind of rental sector just outlined, which is stable, growing and where both tenants and landlords can have security? It is one where landlords could make a fair return providing a good service and tenants would have long-term security of tenure and affordability.
What do we need to do? First, we have to accept we are in an emergency, and therefore, we urgently need a three-year ban on rent increases and a refundable tax credit to put money in renters' pockets. A refundable tax credit would not be my preferred option; I would much prefer to see rents unilaterally reduced. I do not believe that is possible or deliverable in the short term and therefore, the refundable tax credit is desired required. However, at a minimum there must be an emergency three-year ban on rent increases. Then we need to stop talking about cost rental and pretending we are doing it and we need to ask how much cost rental do we need and how much money it would require. The allocation of a paltry €70 million in budget 2022 to deliver more than 500 cost-rental units is an absolute embarrassment. We need at a minimum 4,000 affordable cost rental units year-on-year at a cost of €300 million plus, which is what Sinn Féin provided for, and even that would take some time to meet the need that is out there.
We also need to plan to halt the disorderly exit of rental properties from the lower and middle end of the private rental sector. The first thing that is required, which I called on the previous Minister, Eoghan Murphy, to do, as I am calling on the present Minister to do, is to commission research by the RTB to find out exactly the reasons those landlords are leaving. There is some survey data from the board, which is very helpful, but we need to go one step further. My suspicion is that many accidental landlords who never wanted to be landlords and semi-professionals who thought that it was an easy, soft investment and realised otherwise after the crash are now taking advantage of positive equity. They are simply getting out. However, there is a bizarre situation, which has happened on 70 or 80 occasions in my own local authority in the past number of months, where a landlord with a HAP tenant issued a notice that quit, the tenant moved out, the landlord sold the property and a mid-sized institutional investor bought that property at between €30,000 and €50,000 above the asking price, then leased it back to the local authority under the long-term leasing scheme at an astronomical price and a different social housing tenant was put in. Eighty such leases have been advertised on our choice-based letting system in South Dublin County Council in recent times. I suspect, knowing where the properties were, a very large number, if not the majority, were previous HAP tenants. It is displacing one group of social housing tenants for another. Here is the crazy thing: the Government, the Minister and his Department will not let our local authority buy those properties which is the most logical thing. If a HAP, RAS or rent supplement tenant is in a property that is being sold, let the State buy it. As long as it is of the right quality and subject to proper price controls, it should be added to the local housing stock. However, there is also a case to seriously consider credible tax reform of the private rental sector. Large institutional investors pay no tax on their rent roll. Some medium-sized investors pay tax at a business rate while semi-professionals and accidental landlords pay much higher tax. That is untenable and, therefore, comprehensive reform where all landlords pay a fair rate of tax on the profits they generate would be much more appropriate. The Minister should do the decent thing. If the programme for Government and the housing plan commit to tenancies of unlimited duration, then he should just do it and introduce the legislation, otherwise we are going nowhere.
On the basis of this Bill, Fianna Fáil and Fine Gael, yet again, cannot be trusted by renters. I expect that they will not be in here to speak to the Bill today to save their blushes but the incredible thing is that the Green Party Members, for all their election promises, will continue in support of bad Fianna Fáil and Fine Gael housing policy. It does not have to be this way. Rental markets in other European jurisdictions function much, much better. That is what we are arguing for. That is what our amendments on Committee Stage will do. If the Minister really meant the things he says about the way he wants the private rental sector to be in the future, he would abandon the failed policies of his own party in the past, embrace the good ideas of ourselves and other members of the Opposition and create a functioning, stable and affordable private rental sector for all, something that we do not have because of him, his party and his coalition partners, but we could have if we had the change in policy that we are outlining.
This is a huge missed opportunity. We were optimistic that with this Bill, the Government would finally tackle the issue and support renters. In the past four weeks, 14 families have come to me with notices to quit, which are really eviction notices. In one day in my clinic, which is held every Monday, five families came to me with notices to quit. They will become homeless in the new year. Where in this Bill is the protection for families like that, when landlords say they are going to sell a property or that they will use it themselves? If the landlord wants to sell the property, that is fine but why must the tenant move out? That is an excuse that is still being used, which the Government has not protected renters against.
We are in the middle of a pandemic yet families are being forced out of their homes and into emergency accommodation under the Minister's and the Government's watch. A gentleman came to me last week. His landlord tried to put him out with 24 hours' notice, contrary to advice from Threshold. The RTB said it was wrong. He rang the Garda because he was worried that the landlord was going to come down and force him out. I actually drove out to his house to try to comfort the man because he was so nervous. Then his landlord sent him an email to say he must be out on 22 December. What kind of a country do we live in? There are a lot of good, decent landlords out there but there are also unscrupulous landlords who will evict people Christmas week even though they are breaking the law. This landlord will still do this. Where are the protections for renters?
People are sick to their back teeth of the Government making false promises. People are looking to the Minister and the Government for help, hope and light at the end of the tunnel. Once again, they are failing to do that. I was dealing with a man who was supposed to be out of his home last Saturday night. There are 12 units in the property and 11 tenants have moved out. This property is being sold. This is at the heart of the matter. People are being forced out of their homes so landlords can sell up, developers can do them up and then they are advertised at much higher rents. Where is the protection of tenancies of unlimited duration? That man has been living in his home for years.
The Minister’s mentioned RPZs, which have been a complete failure. We see that with the way that rents have increased. In Cork alone, rent has gone up by 7% in the past 12 months. Where is the 4% limit that should have been protecting people? It is not only in the past 12 months; it has been every year. Rents have increased in Cork from the time of the financial crisis by 108%. Sinn Féin is offering real solutions. My colleague, Deputy Ó Broin, wants to protect renters for three years and ban increase on rents. We want to put a month's rent back into people's pockets.
The Minister spoke about renters, inflation and a 2% cap. The Minister may reduces the maximum increases to 2% but if a tenant’s rent is unaffordable already, it will still be unaffordable. He is not fixing the problem.
It is time to put ordinary people and renters first. This was an opportunity to do that. We hope that when we table amendments to the Bill that the Minister of State and the Minister will consider them. We want to work constructively. We have a job to do here. People have put us into this Chamber to try to solve problems and make their lives better. This Bill will not do that. We want a policy to support renters. Deputy Ó Broin mentioned that we do not have the data for new properties coming online. I know of an apartment complex in Cork where all the tenants had to leave because the landlord was selling it. When new tenants were put in after it had had a lick of paint and a small bit of maintenance work, they had to pay €400 a month more than the previous tenants.
This is a missed opportunity. I hope when we bring forward amendments that the Minister will work with us positively.
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.
I am always interested in what Deputy Nash has to say. His contributions are always reflective and he is practical, reasonable and objective. Even he will recognise that his party leader, who is a former Minister for the Environment, Community and Local Government, took a couple of steps regarding the size and scale of apartments that had a pretty devastating impact on property development in Dublin and the living conditions of people who ended up renting those apartments. It is not something to be proud of and is not a positive legacy.
I have a lot of respect for Deputy Ó Broin. We share some ideas, but I do not necessarily imbue him the same kind of messianic talents as some in the media. I was very taken this week with the fact that he was invited to contribute on Sinn Féin's position on the mica redress issue. He said at the time that he would contribute comprehensively to it. He was invited by the Minister to do so and he did not. I wonder how he explains himself to his colleague in County Donegal, Deputy Mac Lochlainn, in that regard? What kind of conversation have they had on that issue? That must have been very interesting.
In my experience of 22 years in politics, I have never seen a Minister as open as Deputy O'Brien to inviting spokespeople from all parties and none to contribute to policy development on housing. He has been Minister for 14 months. When we look back at the raft of changes and the history of this period in the context of housing is spoken about, we will see that it represented not the destination of where we wanted housing policy to be, but certainly an advanced part of the journey to where housing policy was going. I represent a constituency that is quite varied in terms of income brackets, socio-economic class, to use that cliché, and the challenges that face people. People in my constituency would look enviously at rental costs of €1,300 a month that previous Deputies mentioned. The rent for a three-bedroom house in my constituency can be up to €2,500 and we are not necessarily talking about the leafy suburbs.
When we look back on this period, and this is not to suggest that there is not much more left to do because there is, we will see the introduction of a cost-rental model for the first time in the history of the State. Today, we see the first steps being taken to freeze rents and cap rent increases on rental properties. We see, in particular, unlimited duration tenancies, which never existed before. Please acknowledge that significant steps are being taken and that in 14 months, this Minister has made dramatic changes and has shown he can deal with an evolving situation. I agree that there is a crisis, there is much more to do on this - I have talked to him privately and the Minister knows this - and many more measures will need to be taken.
I was taken by what Deputy Nash said. I agreed with much of it, as a constituency politician, and with what was said by previous speakers on this side of the House, on the precarious nature of living in rented accommodation and the uprooting of families when a landlord decides that he or she wants to sell a house. This might involve a family that has set down its roots, whose children have set roots down in schools, colleges and local employment and, suddenly and without warning, that is threatened. I am dealing with a family at present that has had to make such a move on four occasions in their lives.
We need to get on top of the condition of some rental properties once and for all. I ask colleagues to appreciate that I am restricted in time so what I am about to say will sound like a pro-landlord piece; it is not. I ask them to take this in the context that I accept all the support for this Bill and the support for tenants that needs to be provided. More supports need to be in place but I have come across, as have all of us in this Chamber, tenants who have treated properties appallingly.
They are in a very small minority, but we do need to make provision for landlords in those situations. If a landlord can demonstrate that a tenant has abused a property or is damaging the property or leaving it in nowhere near the state in which the renter took it on, the landlord or the RTB need powers to impose in that regard. I say that just as an aside.
I welcome the start of this conversation. It is part of an evolution in housing policy in Ireland. There are destinations in housing policy articulated by members of the Opposition that I want to get to equally, that would see enhanced tenants' rights, security of tenure, on which first steps are being taken today, and rent predictability, that would allow people, while not necessarily owning their home or being tenants of a social home for life, to get to a point at which they could consider a private house, their home for life, without fear of eviction but with the ability to live comfortably and in security and the power to raise their family rather than having to uproot them every number of years.
In today's housing crisis it is clear that many people, as things stand, will probably never be in a position to own their own home. House prices have risen so high that many people find it difficult even to put together a deposit. I hear regularly in my constituency office how a professional couple earning what would otherwise be regarded as good incomes are struggling even to get a mortgage. If the couple have any children, the additional cost of childcare makes it almost impossible under current Government policies to get on the property ladder. Therefore, many people are now forced to rent rather than buy and are faced with spiralling rent costs. Many rents are greater than what monthly mortgage repayments would amount to. In this precarious and dysfunctional housing and rental sector, many people are no more than a rent payment away from being made homeless. Rental prices in Dublin average €2,000 per month. The national average monthly rent stood at €1,443 in the first quarter of 2021, a rise of almost 95% in a ten-year period. Rents across the country have risen on average by 7% in the second quarter of 2021.
There has always been an element of insecurity for renters, who are dependent on landlords. In the current dysfunctional environment, insecurity of tenure has never been greater. Renters need greater security over their tenancies. They need proper rent controls and proper regulation over their rents. Renters face ever-increasing financial burdens as the cost of living increases, with renters having to pay for childcare, school costs, healthcare, transport costs, bigger bills for utilities and much more. Sinn Féin has put forward proposals to help hard-pressed renters who need a break. We can go some way towards helping renters by freezing rents for three years and banning rent increases for all new and existing tenancies. Sinn Féin has also put forward proposals that would put a month's rent back into every renter's pocket through a refundable tax credit.
Rent pressure zones have failed and should be scrapped. Recent reports have highlighted the lack of compliance by landlords with rent pressure zone legislation. Pressure on the sector is increasing as recent figures show a decline in the availability of low-cost properties as landlords exit the sector. The 2% cap on rent increases will have a limited effect on rising rents as there are too many loopholes, which leaves the door open to runaway rents, as will linking rent increases to inflation. If inflation continues to rise, so will rents, so neither of the proposed measures in this Bill will be as effective as a rent freeze and neither will give renters the relief they urgently require.
I was worried, coming in here, about the Government's entire approach to this and how out of touch it is with the problems faced by renters and the problems in the private rented sector. Having heard the self-congratulatory comments from the Government, as if this Bill is the answer to all the problems in the private rented sector, overselling a technical change in respect of the provisions on indefinite tenancies, I am much more worried. We have to start with an honest analysis of the problems, an honest acceptance of the problems and an honest analysis of this Bill and its limitations. It is not something to be proud of that this is the sixth piece of legislation in less than two years on the private rented sector. That is a sign that the other legislation has not done the job that was needed. We see temporary measures, emergency measures and the measures that were implemented in the summer, tying rent increases to the harmonised index, which we all warned at the time would not work as inflation is going up. We see the Government behind and out of step on this. What we need is one Bill to correct the problems in the rental sector and to give certainty. Several different pieces of legislation is only a way to sow confusion. It leaves landlords, tenants and everybody else confused as to what the regulations are in the sector. It is the worst possible way to do regulation or legislation. No Government should be proud of coming back in here every few months with different Bills when it should be coming in once to sort out the problems. It is very clear to me that the Government does not understand the pressures faced by renters and the problems in the sector.
It was said earlier that Dublin is the third most expensive capital city in the European Union in which to rent. In fact, it is worse than that. Dublin is the third most expensive capital city in Europe in which to rent and the most expensive in the European Union. In Europe, it is behind only London and Monaco.
While I am assessing the Bill, I wish to bring in the voices and personal testimonies of renters because it is important we analyse the Bill and how it is affecting people in their real-life situations. When talking about renters we are talking often about people on low incomes paying very high, unaffordable rents. We are also talking, increasingly in recent years, about people on middle incomes and good incomes who would like to be able to buy their own home and who are squeezed out of doing so. The average household income of a first-time buyer is now €82,000. It is higher again in Dublin. Households below that level are simply being squeezed out of being able to buy and forced into a rental trap for years. What happens in the rental sector affects people on low incomes particularly in affordability terms. We need to look at this Bill in terms of how it affects renters in that regard. I wish to quote from one personal testimony. These personal testimonies are compiled by Dr. Rory Hearne. One states:
I just signed a lease to rent a two-bed house for me and my two children. I'm a single parent. It is almost €2,000 per month and, to be honest, I have no idea how I'm going to make ends meet. I'm a full-time permanent employee and have been renting privately since I was in my early 20s. I have modest savings but nowhere near enough to even think about a deposit for a mortgage. Let's face it: I have no hope of getting one. I'll be eating into those savings over the next while anyway to make ends meet, and then what? So I'm in a situation where the bank says that I can't afford mortgage repayments of about €1,300 so I pay nearly €2,000 a month in rent instead. It feels so hopeless, and trying to shield the kids from the stress is unbelievably hard.
That personal testimony is something that all of us as Deputies will be very familiar with, unfortunately.
The Bill allows for 2% rent increases when we already have some of the highest rents in Europe. These measures are completely insufficient. As others have said, they will allow for cumulative increases beyond 2%, which people will not be able to afford. In addition, they will apply only to those parts of the country covered by rent pressure zones.
I have amendments in to address all those points. There is only two hours for Committee Stage next week because that is all the Government has allowed, so whether we get to all our amendments is uncertain.
On rent caps, the Minister of State and others have referenced that the 4% cap did not work, has not been enforced and has been breached in every county. If that did not work, why does the Government think the 2% cap will work? We have been told nothing about why this new cap will not be breached when the 4% one was breached all over the country. Despite the comments from the Minister for Housing, Local Government and Heritage on this, insufficient resources have been put into the Residential Tenancies Board and there has been insufficient enforcement of the existing rules. Figures released to me by the Residential Tenancies Board show that in 2020, more than 90% of the investigations conducted by its investigations and sanctions unit related to rent increases above those allowed for by rules governing the rent pressure zones, RPZs. That worked out at about 225 approved investigations into breaches of rent pressure zones. In the year to July 2021, only 28 landlords received a written caution, monetary fine or both for breach of the RPZ rules. That is just over 10% of sanctioned investigations resulting in action against landlords, showing how weak the system of enforcement is.
The alternatives needed to high rents include cost rental. Unfortunately, the delivery on cost rental to date has been paltry. It is not accurate for Government Deputies to say they introduced cost rental because the work on that was done by the previous Government, which introduced it, and by the National Economic and Social Council, NESC, and others arguing for a cost rental model for years. The take-up and roll-out of it has been extremely slow. We heard in the previous general election, especially from the Green Party, that if it got into government we would get the Vienna model of cost rental. Cost rental rents in Vienna come in for a two-bed apartment at between €650 and €750 per month. The newer builds come in at about €750 per month. That is what we were promised. We need thousands of cost rental homes per year and, if we are to get affordable rents, we need to avail of and leverage low-cost financing rather than using private speculative models of development. We also need to do what they did in Vienna, namely, ensure lower land costs by having zonings that allow just for affordable housing to be built on land zoned for it.
I want to nail a few things on the head concerning rent regulation and the issues around it. First, we have some of the highest rent levels in Europe and the European Union. That has to be taken into account. Second, when an investor looks at investing in rental accommodation, rental income is not the only thing he or she looks at. If the investor is making a rational investor assessment, which he or she often is not, the capital appreciation is a key consideration. Capital appreciation at the moment is good with house prices rising quickly. If the investor is making a rational assessment, he or she also looks at rental yield and, in Ireland, the rate of return received on the money invested is amongst the highest in Europe. A German investor who was reported this week to have bought up 72 homes in Clonskeagh was asked why they chose Ireland over other European countries for one of their first investments outside of Germany and said it was because rental yields in Ireland are higher.
It is important to say that, especially when it comes to landlords who own one property and that type of investment, it is not purely driven by maximum rental return. There is a bias in people who invest in rental homes towards wanting to get a tangible asset - bricks and mortar, if you like. Often in different countries people invest in rental properties instead of stock shares because it is a tangible asset. If there is a complete economic crash, bank shares can collapse in value, while house prices will fall but not collapse to the same extent. That point was made decades ago when this rental sector was being assessed by economist Peter Bacon. He said it was not all about rational investment and that has to be taken into account when policies are being tailored. We saw that traditionally in Ireland when a good number of landlords followed the practice of not increasing rent if they felt they had a good tenant in situ. It was not always about maximising return.
Important research was done in the UK recently on economic return and landlords which shows that small landlords generally do not compare rates of return on investment in rental properties with stocks and shares. That research was from the London School of Economics. Some two thirds of landlords in Scotland with tenants in arrears said they did not intend to seek an eviction on pragmatic and moral grounds. Landlords often develop a relationship with their tenants not solely driven by economics. Some 55% of landlords in Scotland supported emergency legislation to protect tenants from evictions. There is no reason to believe landlords in Ireland are different. That should be borne in mind when we talk about rent regulation.
A disappointment I have in the Government concerning the rental sector, with this legislation and more generally, is that the issue of deposits being withheld from tenants has not been addressed. There has been legislation in place since 2015 for a deposit protection scheme but the Government has chosen not to get that up and running. Tenants lost out on about €200,000 from the rental company, Period Door Properties, when it went into liquidation and they failed to get their money back, despite determinations and judgments from the Residential Tenancies Board. We have had tenants losing deposits of €1,800 and in some cases being owed up to €2,700 and tenants left without heat in the middle of winter and failing to get their deposit back. The Government is doing nothing about that.
On insecurity, I will quote from a personal testimony compiled by Dr. Rory Hearne:
Was renting with two kids (one with autism and learning difficulties) in 2017 when landlord raised rent beyond means. Then said he was giving place to daughter. Before 3 months were up it was back on the rental market. Took it to the RTB who found in my favour and fined €9000. He took it to tribunal and basically talked the whole time not giving me much time to speak and they found in his favour. ... Anyway moved 9 times in 12 years and effect on child with autism devastating. Hates changing. Went to ask for HAP or some stability and told I earn too much. Over 70% of [my] salary on rent. So basically no help from [local authority] or RTB or this government.
That is the devastating impact, which we are all aware of as Deputies from our constituency work, that insecure tenancies can have on tenants. There is a suggestion that the closing of this loophole is somehow huge progress. I will support it because this loophole should never have been in place. It has been in place since a majority on the commission on the private rented residential sector recommended it more than 20 years ago. I was one of the minority of representatives on the commission to dissent from and oppose that. Its introduction had no logic except the landlord representatives, appalled at the idea of any additional measures to provide security, insisted on it. We need an end to no fault evictions, as in most other European countries. That is needed at this point.
In regard to the breaches of the rent pressure zones, which I spoke about earlier, I want to quote a final personal testimony in that regard:
Was in a rented flat for over 10 years and then the landlord wanted to increase the rent from 1100 to 1600.
I was really struggling at 1100. I explained to him that the limit for rent increases was 4% per year.
His response was “I don’t give a – [I can’t say that word]. I’ll sell if you don’t pay it”.
I mentioned the RTB.
He said “sure they are useless, I wouldn’t register any of my places with them”.
I believe he has at least 8 properties. Maybe 12.
I contacted Threshold and RTB. They asked me to provide what he said in writing as evidence.
Obviously I couldn’t as it was done verbally so they couldn’t help me until I did the work for them and gathered the evidence.
My landlord told me he was advised by his son who happens to own one of the largest property management companies in Ireland.
Then in the same breath telling me his son recently bought a Tesla car for €180k. I’d given my landlord over €100k in the 10 years.
I didn’t have the strength anymore to fight this alone (as the RTB and Threshold couldn’t help) and left the apartment.
That is the reality for people with the bureaucracy around the rent pressure zones. In this case, if the person was finally able to provide evidence - it is hard for tenants to be able to do that - and it was taken up by the Residential Tenancies Board, there is a good chance it has not been brought to any conclusion and no sanctions have been applied because we know from the figures I quoted earlier that, at this point, 90% of cases have not resulted in sanctions for landlords.
On the Bill, I have tabled amendments to various sections which it is hoped we will be discussing next week. In regard to section 3, I have tabled an amendment to provide for 0% increases. Anything short of that will not work, as we have seen in recent years in terms of the failed measures to date that have been breached. We need a simple, clear measure and we need that strongly enforced and in place for a number of years to allow for supply to catch up.
Another amendment to this section deals with gender inclusive language. We should not be bringing to this House Bills that are in breach of the United Nations guidelines on gender inclusive language. I have raised this in regard to other legislation as well. I raised it earlier in the week with the Minister for Housing, Local Government and Heritage, Deputy O'Brien, on Committee Stage of a separate Bill and he responded to me on it. I appreciate that efforts are being made to change the legal definitions in our Bills such that they are gender inclusive. That is welcome. However, that goes only halfway to addressing the issue because we still should not be producing legislation that does not reflect the fact there are many people in Ireland who have a gender identity that is neither male nor female and they should be included in our legislation explicitly. It is welcome that the Government is addressing that in a technical and legal sense, but that needs to be done more comprehensively such that in all legislation everyone is included in the language therein. We are approaching the end of 2021 and we should be able to do that.
I am also bringing forward an amendment to extend the rent pressure zones throughout the country. We have seen some of the strongest rent increases in recent times in areas outside of the RPZs. Nobody can afford those kinds of rent increases. I urge the Government to accept some of the amendments from the Opposition, it is hoped next week. I will not be opposing the Bill because the very limited measures in it are better than them not happening, but we should not be under any doubt that this Bill does not go anywhere near far enough to address the very substantial pressures renters are under. We also need to be tackling heavily the exits from the rental sector. If we do not have more fair and balanced tax treatment between different types of landlords, whereby large corporate landlords pay very little or no tax and small landlords pay a huge amount, we will not be tackling those exits.
I welcome the Bill and I thank the Minister, Deputy O'Brien, and Minister of State, Deputy Burke, for bringing it forward. I have been listening to some of the debate over the past while. Most of those who have spoken come from urban constituencies. I come from a rural constituency and maybe I hear very different testimonies from those being heard by other Deputies.
Some Deputies opposite believe there is an easy solution to this issue. There is no easy solution. If an easy solution were available, this would have been resolved years ago. I was taken by the contribution of the previous speaker, Deputy O'Callaghan, in regard to the tax treatment of large and small landlords. I had intended to say something similar but I thought that in saying it, I would be seen as pro-landlord. I believe something needs to be done in terms of a tax break for the small landlord who is being charged 50% versus the tax paid by some of the very large corporate landlords. If we had a reduction in the 50% for the small landlord, we would have a far better rental sector than we currently have. I am a landlord, which I disclose in my annual returns. I have two rental properties, so I would consider myself to be a small landlord. I hope I am considered to be a good landlord. That said, we have excellent landlords and excellent tenants, but we have some terrible landlords and some terrible tenants.
Deputy Ó Broin treats every landlord the same, that is, they are pariahs, they are terrible and they should not be in the field.
I can cite for the House many terrible experiences I have heard about with regard to tenants, where landlords have been really fair and have invested in the properties in respect of which the tenants have shown abuse. There should be more protections for the landlord than are currently in place. In this regard, I often question the Residential Tenancies Board and some of its outcomes which have been very unfair on the landlords involved.
I am lucky that I own my own house and that in the evening I can go home to my family and I do not have the worry as to when I might get that telephone call and I will be uprooted and have to move. Some families have had to move on several occasions. It is a huge upheaval for a family, in particular where the mother or father might be working in a local area or a child or young person is at school or college in the local area. It is a huge concern. We have an awful lot more to do in this area for tenants.
An issue that has come to the surface over recent years is that of student renters. Previously a student might have been able to rent a single bedroom but now he or she might have to double up with another person. This is a huge problem which requires progressive plans and actions from Government. I call on the Minister of State, Deputy Burke, in conjunction with the Minister, Deputy Harris, to ensure much more conversation take places between the college authorities and the Government regarding college accommodation for students.
At the moment, most colleges are unable to accommodate even their first years students. From my 20 years in politics, I know that would never have been the huge problem in previous years that it is now. There is much more that can be done for students. I ask the Minister to work on this with his Department and the Minister for Further and Higher Education, Research, Innovation and Science.
There has been much talk about rent freezes, but they bring their own problems. They can lead to a situation where landlords are left with nothing to invest in their properties other than the minimal in terms of renovation, painting and so on. Have the rent caps worked? Yes, they have worked in some areas. Have landlords cheated the rent caps? Some of them certainly have and they have not been penalised for their actions. Going back to my earlier point, we need to look after smaller landlords, that is, the man or woman with one to five properties. In the main, most of them are really good landlords, who treat their tenants well and look after their properties, but they have continuously come in for negative publicity. A huge number of them have exited the rental market in the past number of years because of the changes, such as the 50% tax, and the negative publicity that tars them all with the one brush. They never seemed to get a break in recent years.
I support the Bill. There is much more that should be, and could be, included in it. I have no doubt the Minister will bring those measures forward in due course.
We are back here again trying to address this issue, which is a pity. If the Government had listened not just to what we were saying but what the market was saying, it would not be bringing in this legislation, at this stage, to cap rent increases at 2%. If the Minister had listened to what we said, he would be aware of what the increases in the past were doing and that no increases should be allowed while we are in a housing emergency that is continuing. In fact, it is getting worse, so much so that houses that were built by the then Dublin Corporation are now selling for €350,000. Those homes were built by the corporation in the 1970s and 1980s as part of its housing stock. Whether it was right or wrong to sell them to tenants is a different debate. The fact is they were sold to working-class people, in the main, in places like Crumlin, Drimnagh and Ballyfermot. They were sold to people who were working at the time, and are still working, in professions and who could not afford to buy them today. People cannot afford the prices that are being sought for houses.
The reason I am bringing up the prices of houses for sale is that they are driving young working families to look to rent in areas in which they never sought to rent before because homes were affordable to buy. They are competing with professional families who can outbid them, although only just. Even professionals, if that is even a word we use any more, with two incomes, cannot afford the colossal rents that are being sought in this city. It has the third most expensive rents in the EU, as a colleague noted earlier. To afford the average rent in this city, a couple would need an income of €6,000 a month. It is just not affordable. While it is welcome that the Government is stepping in to do something, it does not go far enough. There should be no increase in rents. A national housing emergency should be declared and we should act accordingly. That has not been done and it does not look like it will be done. That means the couples I am talking about will continue to suffer and we will end up with emigration on the back of a housing crisis. There is no need for that to happen.
I genuinely would like to be able to say I think this Bill will make any difference at all in improving the lot of those who are looking for private rented accommodation, living in such accommodation or facing eviction, or who have been evicted, through no fault of their own, from such accommodation. Tragically, there is really nothing at all in the Bill that will make the slightest bit of difference to the people affected by the absolutely dire crisis we face in private rented accommodation and, more generally, in terms of access to some kind of affordable roof over the heads of the huge numbers of people who need it and are having great difficulty in securing it.
Limiting further increases to 2% or the rate of inflation, whichever is lower, is worse than inadequate. It is worse than useless against a background of rents that already are completely unaffordable. I do not know how many times we have to say this and I cannot believe the Government does not know it. Ministers see the same rent figures we do and I assume they have constituents in the same situation as I do. They must know that if rents in Dublin are €2,000, it means the vast majority of people cannot afford them. In my area, the average rent is €2,200 and rising. This means people need an after-tax income of €26,000 just to pay the rent in my area, or €24,000 in most of Dublin, based on average rents. That equates to 70% of the after-tax income of a worker on the average industrial wage.
How does the Government think this is sustainable and how can it justify allowing for further increases, even if they are capped at 2%? Its response is hopelessly inadequate and does nothing to address the primary reason that people find themselves in housing emergencies or homeless. The vast majority of people who find themselves evicted are in that situation through no fault of their own and not as a result of the expiration of the duration of a Part 4 tenancy. That is not the reason most people find themselves threatened with eviction or made homeless. The vast majority are in that situation because their landlords are allowed to evict them on grounds of sale or substantial refurbishment or because they say they need to move a family member into the home. Those are the reasons this is happening.
I will be impressed with, or even take seriously, the Government's efforts to address the crisis facing tenants or those who want to be tenants but cannot find anywhere affordable, when I stop seeing day in, day out and week in, week out the trail of human misery and suffering that walks into my clinic. People come in week in, week out to tell me the same terrible story about their landlord selling up, to ask me what they are going to do and to say that they simply cannot find somewhere that is affordable.
All of the rents in my area are well in excess of the maximum HAP limits and even the homeless HAP limits. The maximum payment you can get for homeless HAP is €1,900 but, as I said, average rents are about €2,200. You cannot find anything, even with the uplift of homeless HAP. If you find yourself threatened with eviction because your landlord is going to sell, make a substantial refurbishment or move in a relative, you are by definition in a housing emergency, at least in my area and in most of Dublin. You are by definition threatened with the real possibility of homelessness. When people with kids, individuals or families come to my office to express their fears and ask what their options are, I tell them they have to register with the homeless section of Dún Laoghaire-Rathdown County Council. When they go there, the council officials tell them they might be able to get them a hostel somewhere in the city centre. People have a fear of going into shared accommodation, such as hostels in town. They often have kids going to school in our area. They ask how on earth their kids are going to manage in that accommodation. They ask how they will be able to get them to school in the morning.
I will never forget the day a young woman called Kayley came into my office. I could not believe it when she said she had been homeless all her life. I would say she was about 19 or 20 at the time. I brought her case up here a few years ago. When Kayley was born, her mother was homeless and she remained homeless for all the time that Kayley was brought up with her. When Kayley came of age, she tried to become independent - she was at school and she was going to college - but she became homeless. She went from being homeless with her mother to being homeless herself. Never in all her years did she have a secure place to live. Imagine that. While that was a particularly extreme story, I am not exaggerating one iota when I say I see people in dire situations - if not that extreme, not far off it - day in, day out. I see parents with kids who are terrified by the prospect of being made homeless.
This proposal is just not good enough. It is not serious at all. I do not see what the Government thinks it will achieve with this. It will neither touch the crisis that affects my area nor the crisis that affects most of the areas where the rental crisis and the housing and homelessness crisis are most acute. What do we need to do? We saw some of what could be done when it was done in the emergency conditions of the first phase of the pandemic. The Government had to get buy-in from the public in the face of the pandemic and the lockdown measures, so it introduced a freeze on evictions to prevent evictions and it put a complete freeze on further rent increases. Prior to the pandemic, government after government and housing minister after housing minister had said this could not be done. They said they had advice from the Attorney General that it was not possible and was unconstitutional. Lo and behold, faced with a pandemic, it could be done. It was done and it had a positive impact. The result was that the number of families and individuals in homelessness fell. This happened just as those of us who had argued for a freeze on evictions prior to the Covid-19 pandemic, when we were faced with a more general housing crisis, said it would. It is self-evident that the number of people forced into homelessness fell because evictions were no longer possible. The majority of people who are driven into homelessness come from the private rental sector. They are evicted by landlords who sell, substantially refurbish a property or decide to move a relative in. When, for a brief period in the first phase of the pandemic, such grounds for eviction were no longer acceptable, lo and behold the number of people thrown into the misery of homelessness reduced. Similarly, rent increases were frozen so people were not faced with the prospect of rising rents they could not pay.
As I mentioned earlier, the HAP limits are inadequate to cover the cost of the extortionate rents in my area. Insofar as people in the area can get HAP tenancies at all, most of them have to pay top-ups beyond what they would have to pay if they were paying a proper, differential rent in a council house. They simply cannot afford these further top-ups. They often get deeper and deeper into financial trouble because they are paying levels of rent that they simply cannot manage and getting themselves into debt or arrears. Then they find themselves faced with the possibility of eviction if they get into arrears. All of this is sanctioned. It is now official. It used to be unofficial. The council would quietly say, "we know the HAP is not enough so you can top up", but now it is official. The tenant fills out a form to say that he or she needs to top up to pay a rent that he or she cannot afford. Lo and behold, people get into serious trouble. They often get into so much trouble from a financial point of view that they cannot pay the rent and end up threatened with homelessness.
We showed during the pandemic that we can completely freeze any further increases in rent and prevent no-fault evictions, which are currently allowed and are the kinds of evictions that the majority of people find themselves faced with. If we remove those grounds for eviction, fewer people end up in housing emergencies and fewer people end up homeless. Of course, as soon as the Government reintroduced the right to have rent increases and lifted the eviction ban, more and more people started to become homeless and we saw the figures begin to rise. It is as simple as that. All of that is combined, of course, with the continual raising of rents. There has been a 7% national increase over the last year, according to the RTB, on top of the already unaffordable levels. That is the minimum that is required in order to give some security to people in the current situation of utterly unaffordable rents who feel that there is always a possibility around the corner that they could be evicted on the grounds I have mentioned.
That does not go far enough, in my opinion. This is where People Before Profit would go even further than any of the other Opposition parties are suggesting. Given that rent levels are unaffordable, we need to reset rents at affordable levels. That is done in some countries. In Luxembourg, for example, a rent can only be a certain percentage of the capital investment in the property. I am not saying that is the perfect model, but it is a sort of cost rental in the private sector. It limits the amount of profit that the landlord can make, and the amount he or she can charge in rent, based on the investment he or she has made in the property. In other places, rents are set on the basis of particular geographical areas at a level that is considered affordable.
That is what we need to do. If we do not do that, we will not get an affordable rental sector. Even that measure on its own, which we should and must take, will not solve the crisis because, as I am sure the Minster of State will be quick to say, we need supply. We certainly do need supply in the market because there simply is not enough of it but the problem with relying largely on supply from the private sector is that the people who build rental property for profit have absolutely no interest in rents falling. Why on earth would they build properties to rent if they thought the result of building those properties was that rents would fall and their profit margin would reduce? They simply will not do it. They will build properties only if they can make large profits. If there is any suggestion that the profits will decline, they will stop investing. That is the folly of relying on the private sector in order to solve the housing crisis and the rental crisis.
What is necessary, on a far greater scale than this Government or any recent government has been willing to consider, is a return to the direct provision by the State of affordable rental accommodation. In other words, we need council housing, which is genuinely affordable and based on a proportion of people's income. Much as the Government says it is moving back towards this approach, I do not believe it. I think there is a reason we have been asking for four years for a review of the income thresholds for eligibility for social housing. The Government keeps saying there is going to be a review but it never arrives. Why is that? Why is it that the Government has not reviewed upwards the income thresholds for four years? The reason is that the Government is intending to reduce social housing to something that is provided only for people on the lowest of low incomes. That is the plan. There is no question about it. It is convenient for reducing the numbers on the housing lists because as people's incomes creep up each year the Government can lop another few hundred or few thousand off the list.
The issue has now reached such ridiculous proportions that even people in homeless accommodation are being affected. We are dealing with four cases in my area of people who are being evicted from homeless accommodation because of their incomes. They are working and trying to get themselves out of that situation and their work takes their income over the income threshold but they still cannot afford anywhere to live. They are being threatened with homelessness from homeless accommodation. It beggars belief but that is where we have gotten to because of the refusal to raise the income thresholds. That is a deliberate strategy. In responses to parliamentary questions about this, the Minister uses a coded phrase about targeting social housing at the most vulnerable and those most in need. That is code for saying we are only going to make social housing available to people on the lowest incomes from now on, as opposed to historically when social housing was made available to a very broad spectrum of working people. Now, the income thresholds are such that it is available only to the people on the absolute lowest incomes. That is deliberate and the Government's plan is to replace the historic provision of social housing with cost rental accommodation.
Cost rental is better than the open market but it is still not anywhere near as good as social housing, where the rent is a fixed proportion of people's income, which is manageable and adjusts according to their income rising. The rent in cost rental accommodation is linked to the cost of building the house and is therefore more expensive. The first cost rental homes that have been delivered in my area cost €1,200 a month. That is cheaper than the average of €2,200 but still shockingly expensive and completely unaffordable for huge numbers of people who are now no longer eligible for social housing because their income is over the limit. However, they still cannot afford €1,200 a month. I know a council worker who was knocked off the housing list. He is an outdoor worker on low wages and he was knocked off the list because he did semi-permanent overtime on a Saturday, which he could not get out of. That knocked him off the list. He had been on it for ten years. I rang him when the cost rental scheme came up on Enniskerry Road and I said this might work for him. I was thinking in my head that €1,200 did not sound too bad compared to €2,200 but he said I must be joking. He said he could not afford €1,200 on his income, and he asked if I was I kidding him. He explained what his wages were as a council worker. Cost rental is not good enough. We need to set rents at levels that are affordable, based on the income of average and low-paid workers and we need the State to directly provide much of that because the private rented for-profit sector is incapacble of delivering it.
I thank the Minister of State for bringing forward this Bill. A crucial provision of the Bill is the introduction of indefinite tenures, which is a Green Party policy and a commitment we secured in the programme for Government. However, in a recent discussion with Father Peter McVerry, he had a very clear and frank message for us legislators, which is that we have to be far more radical than we are being in order to solve the crisis. He said we have to value housing as a fundamental right like the rights to education and healthcare. I therefore look forward to the progress on the referendum on a right to housing, which is a commitment of the Green Party that my Government colleagues support and we will work together to achieve it. I am, however, concerned about the fact that the referendum is ninth and last in the terms of reference of the commission on housing, which suggests it has the lowest priority. I urge the Minister to raise this with the commission. It should be one of the first, if not the very first, priority of the commission, considering its significance and the time a referendum will take to progress.
On the Bill, there are a number of amendments that could strengthen its provisions, including a very minor but significant one that would ensure the relevant local authority, as well as the RTB, is informed of termination notices to tenants. This amendment would ensure early interventions if there was a risk of homelessness, and is supported by the Simon Community. I strongly urge the Minister of State to consider it. Another amendment we in the Green Party feel ties into homelessness prevention and would strengthen rental protection is the introduction of a 90-day notice period when a landlord ends a tenancy of less than six months. It is also critical that we end sale of a property as a reason to end a lease. Similar to the protection of leases in commercial properties and other jurisdictions, leases must be secured and tenants need to be protected. If this is not addressed in this legislation, I intend to pursue the matter to see if we can introduce something on it going forward.
A quick solution that would stabilise the rental market and reduce rents, as well as reduce the State's expenditure and the reliance on HAP, would be the introduction of a temporary tax suspension on rental income. Landlords are typically paying about 40% on rental income, which the State could instead suspend and thus reduce rents by that same percentage. Not only would this reduce the exorbitant rents that are crippling families without impacting the landlord's income, it would also save the State money on the €700 million rent assistance bill that is being paid into the private market at the moment on HAP.
This Government, according to Green Party policy, has legislated for cost rental accommodation, where the rent is based on the construction cost of a home and is up to 50% lower than average rental prices. We have moved this model from 50 units in existence in this State to 2,000 units a year. That is the starting point in the establishment of this affordable housing model.
As has been stated by Deputy Ó Broin and others, we will not oppose the Bill, but we do not believe it will cut the mustard and deal with the situation of hard-pressed renters. The rent pressure zones failed, as will this legislation. It is almost as if it is legislation for a situation that is not as dysfunctional as the one with which we are dealing. RPZs failed to deliver on 4%; the Minister is now talking about 2%. We do not see the Bill delivering on that, but if we are talking about 2%, why are we not talking about 0%? We also need to talk about putting money back into people's pockets. Our option is the only one at this time, that being, a refundable tax credit worth up to a month's rent. Everything we are discussing will take in or around three years to do due to the dysfunctional and brutal situation with which people are dealing.
By now, we each have a single transferable speech on housing. In terms of rentals, for example, I could speak about daft.ieand more than €1,300 per month for a rental. I could say that there are multiple examples of regular houses in Dundalk that people are incredibly lucky to get for €1,000 per month. I have seen too many examples of €1,400, €1,600 and €1,800 per month. The situation is not getting better and what is being done now is not what is needed.
We all know the supply issues and we know that we need to discuss movement on actually affordable mortgages, cost-rental and social housing. I accept that there are difficulties, but it cannot be beyond the Government to deliver solutions. It has been done many times throughout the State's history.
Many Deputies accept that the RTB will not have the teeth to do even the limited amount desired under this legislation. We know that there are significant issues with the state of some rentals. We also know that we need to examine the entire rental sector in the context of the major tax breaks for large institutional investors and the departure of a large number of accidental landlords and others. The system does not work in any way, shape or form.
I accept that we need to deal with the issue of estate management. There are chaotic tenants. Councils and those who live in council areas suffer particularly in this regard. A significant suite of supports need to be introduced.
I reiterate the comments on the new mechanism for assessing people's right to be on the housing list. It is removing a large number of people from the list who had previously been able to avail of it. People are losing five to ten years on the housing list. This is not good enough. I have spoken to the Minister, Deputy Darragh O'Brien, about this issue. I would like to have a follow-up conversation with officials. We need movement on the matter.
I wonder whether the Minister got lost on his way to this debate or did not have it in his diary. Is it not the case that Opposition parties like mine should be listened to by the senior Minister on debates as important as this one? In most debates in the House, the Minister is typically gone by the time the Regional Group gets to speak. That is a pity, as we can all learn from one another.
Ireland is in the midst of one of the worst housing crises in the history of the State, one that has spanned more than a decade. One would not know that from the Government's response, though. There are approximately 1 million people in housing distress. They are either grappling with spiralling rents, on housing waiting lists or being outpriced in respect of rents and mortgages. People still come to my office who are in mortgage distress and who are the collateral damage of the previous housing crisis. They are still trying to navigate their way through the courts system.
In practically every action that the Government has taken in the housing crisis, it has been pulled kicking and screaming into making those interventions. Even where it does, it does so in the smallest way possible. It must then intervene again and again. Interestingly, we have probably had three or four Acts on rent in my time in the Dáil. This is the third Bill coming from a Fine Gael Government and supported by Fianna Fáil.
The rental crisis is unprecedented. Rents in my county of Meath have doubled in the past 18 months. I am sure they have also doubled in the Ceann Comhairle's county of Kildare. The average rent in Meath is €1,473 per month. That is approximately €17,676 per year. Let us think about that for a second. For a person on the minimum wage, this would make the average rent 100% of his or her post-tax income and 90% of his or her pre-tax income. This means that we are saying, "Tough luck", to a section of society that is working 40 hours per week and that the average house is not available to such workers in that county.
We are seeing a wave of people moving from east to west. I am sure that Deputy Durkan has witnessed it himself. We have people coming to us who left Dublin four or five years ago. They moved to Ashbourne to access rents that were affordable. They then moved to Navan, then Kells and are now living in Virginia. They are surfing a wave of affordability westward just to be able to stay in a house. Each time, they are taking their kids out of school so that they can move again. This is having a significant impact on those individuals.
The median wage is €36,000 and it takes a long time to reach. Young people who have just started work will still be nowhere near it after five, six or seven years. In County Meath, rent swallows up 64% of after-tax income for a person on the median wage. This means that he or she has just 36% of his or her income left to spend on everything else. That is incredible. This is on the back of rising electricity, fuel, insurance and childcare costs as well as other monthly bills. It is outrageous that the Government has created in this State a whole section of society that is earning right up to the average wage for whom affordability in terms of renting houses is out of reach.
In Dublin, the situation is even crazier, with rents of up to €2,000 a month. I looked at a studio apartment, and by "studio apartment", I mean "bedsit". It was one room and everything was in it. It is renting now for €1,200 per month. In rent pressure zone towns such as Maynooth, the same is true. The average rent is €200 more there than it is in the rest of the country, making it unaffordable to students who are now staying in hotels and guest houses to access their universities.
The Government's response has been to come back to the well of rent controls three separate times. If someone has to do something three times, it shows that there was a lack of ability the first two times, whatever about making a mistake the first time. It is incredible that this is the third occasion of going to the well of rent caps. The situation is undoubtedly at emergency level and Aontú is calling for a rent freeze to protect renters and ensure that they can hold onto their current standards of living and will not be pushed out of their homes and made homeless.
I wish to discuss a few of the causes of the disaster of rent costs. For us, vacant houses are one of the most frustrating elements of the housing crisis. The CSO stated that there were 180,000 empty homes. An Post reckons that there are approximately 90,000 vacant homes. When I submit a question to the Minister asking how many vacant homes there are today, he refers to the CSO figure, which is nearly five years out of date. It is incredible that the Government cannot even measure the scale of the difficulty in terms of vacant homes. It is incredible if there are 90,000 vacant homes when there are tens of thousands of people on housing waiting lists. The number of vacant homes in Meath is exactly the same as the number of people on the housing waiting list there. This is so crazy you could not make it up.
In the North of Ireland, the Aontú deputy leader, Denise Mullen, tabled a question and she was able to discover the number of vacant sites in 2021 across the North, broken down by county, town and city. They are able to measure the problem in order to deal with the problem. There is an old management saying, which is that if you cannot measure, you cannot manage. That is certainly true of the Government.
What was the Government's response to the number of vacant homes? The Government introduced a vacant site levy some years ago to deal with a part of the problem. Last year, the tax brought in €21,000. It cost more for the Government to draft the Bill than it took in in a full year last year. Now, the Government has replaced it with a zoned land tax, which will not be introduced for another two to three years and which is lower than the previous rate of 7%. That begs the question of how the Government cannot see the urgency of the crisis that is front of it. There is a chasm between the Government and the experience of the people. It is incredible how out of touch the Government is with the experience of people when it comes to homes.
I wish to speak briefly about another component of the crisis, namely, real estate investment trusts, REITs. The Fianna Fáil and Fine Gael market has been pitting REITs against families on a daily basis in a David versus Goliath battle where there can only be one winner. Because of the battle, Fianna Fáil and Fine Gael have created a tenant class in this country the likes of which has not been seen since the landlord times. This housing policy gives a blank cheque to international investors to purchase homes. First, international investors are getting credit at very low costs. Second, they have massive funds. Third, they are getting taxed hardly anything in this State. Let us compare that to a first-time buyer with a young family, who are being charged some of the most expensive interest rates in the European Union, who are limited with regard to the credit they can access, plus they are paying tax at the highest level. The Government is creating an imbalance and an unfair competitive advantage for REITs to be able to wipe out families that want to buy homes. We, in Aontú, have created a Bill that would level the playing field. It would take the tax advantages away from REITs, which does not delete them from the sector, because they have some role to play, but it takes the advantages away so that young families can compete against REITs in the purchase of homes in this country. The legislation is just lying there, and I urge the Government to help to get it through.
The Government's system is incredibly slow. The Oscar Traynor Road site that was up for discussion at council level in recent weeks brings to light a number of important issues in the Government's approach. It took eight years to take the plan from concept to decision-making at the council. It will take another four years for those homes to be built. That is 12 years in total from concept to turning the key in those homes in the middle of a national housing crisis. Does the Minister of State think there is something wrong with that? Does he think that is acceptable? Does he stand over that happening within this country?
A number of other issues also arise in this regard. The council states that one of the reasons it outsourced the building of the homes to Glenveagh is it did not think it would be able to get the capital necessary to build them. Why is that the case? It may be because the Government is not providing the capital, or it may be because of EU laws. It is important to highlight the role of the EU in this as well. The EU prevents this country gaining the necessary capital it needs, through lending, to invest in the building of homes in a national housing crisis. That is an incredible situation for a sovereign country to be in. It is wrong. It is overreach by the EU.
The Minister, Deputy Darragh O'Brien, was asked a question about the EU fiscal rules in June by Christina Finn from thejournal.ie. He was asked if he was going to sort this out and he said: "There's certainly an argument for that". He said he was dealing with his European colleagues on a regular basis on that specific point. He got the ball and he literally pucked it out of the field. He had no real interest on focusing on this issue. His attitude was that the Government would do something about it, but the question was not answered properly. The Government must go to the EU. In the same way that there is a relaxation on investment because of Covid, there must be a relaxation on investment rules because of housing. If the Government does not do that, if it stands over the status quo, it is responsible for it as well.
I wish to raise another issue in connection with the Oscar Traynor site. The council stated that it would build units at €444,000 per unit. Glenveagh said it would build the units at €370,000 per unit. That is a differential of €74,000. What is the reason for a local authority building a housing unit for €74,000 more than a private developer? What part of the supply chain and the construction space is more expensive for the local authority than it is for Glenveagh? In Aontú, we believe in a mixed economy. We believe both the public sector and the private sector have significant jobs to do with regard to housing. We cannot fix the housing crisis without good public delivery and without a good private sector. Unlike many of the parties to my left, who focus just on the public sector, we also believe there must be a good private sector. However, there is a major problem in the State if it costs local authorities €74,000 extra to build a housing unit, and that must be addressed.
Another issue I wish to briefly raise is short-term lets or the Airbnb sector. It is fascinating. Covid has offered a scientific, economic experiment on housing in this country. In March and April 2020, there was a significant increase in the number of rental accommodation units in the State. All of a sudden, the number of homes available to rent in the State increased by 40%. There was a particular spike in accommodation available in Dublin during those months. That spike led to a big decrease in the cost of rental accommodation, especially in Dublin. Why did that happen? It is very obvious that when Covid arrived, the short-term rental space dried up and people were not renting Airbnb accommodation in this State. Those landlords had to repurpose those buildings and put them back into long-term lets and they came back into use.
If we flip the coin to October 2021, people will recall the daft.iereport showed that there was an unprecedented shortage in the availability of homes across the country. There were 1,400 homes in total to rent in the State, with approximately 800 of those in Dublin. In some counties, fewer homes were available to rent than would fit on the palm of my left hand. It happened suddenly because the tourism economy opened again and landlords repurposed those homes back into short-term lets because they can make €250,000 a year out of one home on a short-term let basis compared to perhaps €20,000 on a long-term let. If they are flipping the property night-by-night on a short-term let, they can make up to €250,000. Of course, landlords are going to take that option if it is available to them. What it means is that there is a radical reduction in the level of rental properties in the State, which hits families hard. Again, the Government has done little or nothing about that. I say to the Minister of State, Deputy Peter Burke, that it is an incredible situation that under the Government, right now tourists stay in homes and families stay in hotels. That is the mixed-up, muddled world we live in. The Government has created a distorted market in housing.
We, in Aontú, have produced a temporary Bill for three to five years to prohibit short-term lets of non-principal private residences in towns or cities with a population of more than 10,000. Overnight, that would take thousands of houses out of the short-term let sector and put them back into the long-term let sector. That would make them available to families and reduce the cost of rent. I urge the Minister of State to take that on board.
In my remaining time I wish to speak about the mica crisis and the impact it will have on rents, especially in the Donegal area. All of a sudden, we will have many families who will be put out of their crumbling homes and who will have to seek rental accommodation. We are going to see a difficulty arise in that regard.
I attended the marches in Dublin last July. It was a wonderful expression of people power. People were leaving Donegal at 6 a.m. to be in Dublin in their thousands. They very clearly stated that they wanted 100% redress for their families. The Government said it would fulfil that request but, in a sleight of hand, the Government has looked to produce a plan which is nowhere near 100% redress at all. It has put a cap of €420,000 and created a sliding scale on the square footage, which means the mica redress scheme cannot achieve 100% redress for many people. In many cases, the Government's plan will prevent families from rebuilding their homes as many will not be able to tap the €30,000, €40,000 or €50,000 they will need to build them.
True to form, the Government produced a plan that is less than what is necessary but, true to form also, the Government is now actively considering how to plan the U-turn on this issue. We need only listen to the Government at the moment, and I have mentioned that the Government has reached peak confusion and that this is the confusion coalition. We listen to all of the different voices coming out from the Government, where the Minister, Deputy Charlie McConalogue, says he fully backs the mica proposal, the Minister, Deputy Darragh O'Brien, says it may need some work, and the Taoiseach says all the costs will not be borne by the mica homeowners and that these figures have been plucked from the air, while Deputies Joe Carey and Joe McHugh are still trying to make up their minds on supporting the scheme at all.
Surely, if a person gets 100% redress for pyrite in Dublin, a person from counties Donegal, Mayo or Sligo is entitled to 100% redress. We have to ask ourselves why is it they are entitled to 100% redress. It is because Fianna Fáil and Fine Gael created a light-touch regulation system for decades in this country. They allowed cowboys to create building materials that were below what was necessary for them to function properly. I remember Bertie Ahern going internationally and selling Ireland as a light-touch regulation destination. We had systems in County Donegal where the Government did not protect the homeowners, where the insurance companies did not protect the homeowners, where the quarry owners did not protect the homeowners and where the manufacturers of building materials did not protect the homeowners. As a result, we have thousands of families who are stuffed. If, on the one hand, the Government will not live up to its responsibilities and duty of care to make sure that the building materials are of 100% quality, then, on the other, it needs to provide 100% redress.
It is heartbreaking to see that the Donegal families are still no nearer their destination with regard to fixing this and that they still have work to do. For the families who are listening to the storm winds swirling around their broken walls, I urge the Minister of State to make sure the Government fulfils its responsibilities in this regard.
I welcome the opportunity to speak on the Bill. As the Minister of State and everyone around the country knows, even in areas where there was never a problem with rents, it is becoming a problem. Even in small towns where three, four or five years ago there was not a problem, it is now a problem to get a house. Thankfully, we see some families moving to such areas, which is welcome. However, that is putting on added pressure because there are not enough houses.
We have seen projects in the councils where, for one reason or another, not enough power was put behind them, such as at Oscar Traynor Road, which was to be done, and done again, but it keeps being put off. I am not blaming the Minister of State. I remember that, eight or ten years ago, one Minister got all the councillors together and it still fell back.
There is one solution to rent and RPZs, and that is to get houses built. The Minister of State will be familiar with the current situation where there could be projects for 12,000 or 13,000 houses caught up in the courts due to people objecting, which is a major problem. Some of this has to be fizzled out. Everyone now thinks they can shoot to the courts and basically block whatever housing is coming near their area. Everything is granted so long as it in someone else's area but not at my back door. Some of the decisions I have seen would cause anyone to raise an eyebrow. There might be some wording left out in some bit of a document and the whole housing plan would still be held up. The other part is that it takes bodies like An Bord Pleanála so long that we would wonder if anyone at all is working there at the moment. The Galway outer bypass has been before the board for I do not know how many years; someone is looking at it but, every month, it is kicked down the road. It is the same in housing.
One thing we need to do is to call a housing emergency, put legislation through, get the stuff built that we need to get built, and get it done rapidly. There is another thing we need to do for renters and for families. If people are on €30,000, or €26,000 to €27,000 in County Galway, they are not eligible for social housing but they cannot afford a house. However, if they are in Dublin, the limit is €35,000. That is saying that someone in Dublin can earn more money and still be entitled to a house whereas, in counties Galway and Roscommon, or maybe County Kildare for that matter, the Ceann Comhairle’s area, they would not be entitled to it. There needs to be a bit of levelling off. A house is a house, and people earn what they earn, no matter where they are. The days where this is acceptable are gone. There are parts of County Galway where a house is as dear as parts of Dublin, unfortunately, for the people trying to buy them or rent them. The Department needs to look at the eligibility criteria.
Given what we are doing at the moment, those in middle Ireland who are going out to work every day are being pushed out of being able to rent a house or, further down the road, afford a house. At one time, a nurse and a garda, no matter where they were in the country, were able to afford a house, but they would want mummy and daddy to give them a bit of a pot to be able to afford a house now. That society will not continue because that society is not sustainable.
The one thing we need to do is make sure we drive the number of houses on, which will solve the whole rental problem. It is like anything else. If someone has a heap of cattle, the factories will make sure they do not get much of a price, but if the person has damn all, the price will go up. That is a very simple analogy.
There is a huge opportunity in this regard. In many rural areas, there are old two-storey houses that were built of stone and many of them vacant, but we are not giving any incentives to people. Where people are eligible for HAP, for example, they could be given extra money to do up a house and, for the time being, we would be taking someone off a list.
Another issue is that some people have this idea that mummy and daddy are over the road so they are entitled to a house right beside them. We need to bring in a system where, if a person is prepared to go somewhere up or down the country, regardless of where they are from, and to take a house for the time being, they would get moved up the list a bit after a year or two. That would give an incentive. It is done in England. I have been saying this for a long time but no one in the Department seems to want to listen.
To go back to the issue of houses in rural areas, there is one worrying aspect. To be fair, the Minister of State is from a rural area and I ask him to make sure he keeps an eye on this. The new county development plans are coming out in many counties at the moment. I see that, for Galway, there are to be 945 one-off houses over a five-year period. In my opinion, given the size of Galway, the second-biggest county in Ireland, that is curtailing building. What do we want? Do we want a person to build a house there or do we want them to go and put more pressure on the rental sector? There are a lot of different avenues that we need to look at in this regard.
The other side to it is that the Minister of State's Department and the Department of Further and Higher Education, Research, Innovation and Science must work together. With the establishment of the new technological universities, some of them should grasp the opportunity and show a bit of entrepreneurship. They should not sit on their hands. Many of them have a lot of land and they need to go out to the market and get the funding. They can do that because they have a sure bet. They are sure they will have students every year and sure of getting rent, which must be set at an affordable price as well. There is an opportunity there, but the question that might be asked then is what that point has got to do with this issue. The answer is that every student living on campus or in accommodation beside a college, for those institutions that have land, takes pressure off some other part of a city or large town where someone else might need a house. We must consider this side of things as well to ensure that we facilitate it.
I am not going to stay talking all day, another minute or two will do because Deputy Durkan wants to contribute as well, but I ask the Minister of State to examine aspects such as the rural issue that I am on about. We have a regulator that seems to be looking in on what every council is doing. We are in an emergency and I do not understand why anyone would say to Galway County Council, or any other county council for that matter, that it can only put such a quota on the rural one-off housing allowed in a county. For the next five to ten years, every house we can build in this country is a problem solved for some family. It could also help to solve a problem in an area where there is ferocious pressure on housing now by reducing that as well, such as in the big cities where people are paying astronomical rents.
We can bring in all the Bills in the world that we want, but that will do no good if we do not do things that are the low-hanging fruit in this area, such as allowing houses to be built in the countryside, renovating older houses lying idle in many areas and basically driving on the whole planning side of things so that it becomes a less complicated process. Unfortunately, the planning system depends an awful lot on what county people are living in. I will comment on one council now, and this is factual. If people bought a house in Wicklow or Kerry years ago, lived there for a while and then sold that house to return home to take up farming or whatever, those people will not be approved for planning permission because they owned a house previously. That is some set-up in a council. The planners doing that seem to have a total disregard for circumstances. People will hardly drive from Kerry to go to look at sheep lambing or cows calving in another county. Those people are not coming home to build a house for the craic.
There needs to be some accountability. In some planning authorities there does not seem to be any. It is possible to see in one county, and they are all going by the book and let no one say that any of them are different, stipulations concerning how to go about resolving issues, but then another planning authority will tell people to forget about it, head out the door and good luck. If we maintain attitudes like that, then we are going to stop people and disgust them. We will then have more debates here about housing. This is about my 100th debate on housing and we still have the same common denominators arising for the simple reason that we are not building enough houses. The planning system also needs a major overhaul.
In addition, we must reconsider this idea of telling someone in a rural area that they must show they are from there and that they are going to be going farming or doing X, Y and Z. I am not saying that every Tom, Dick and Harry should be able to come into the countryside to build, but let us take the example of someone who owned a house when he or she was younger, perhaps after going to college and then working in another county, in Kerry, for example. If that person then decides that he or she wants to come to the west or the east of the country, and because that person is honest enough to say that he or she had previously owned a house and then sold it because he or she does not want to be driving 200 miles, the planning authority will tell the person that it is not possible to build because of the provisions of the county development plan. Whenever there is a situation where that is the case, the Minister must move in and start to redress the situation.
It remains to be seen if we will achieve the objectives that we want to. However, I agree entirely with the opinions expressed by my colleague just a few minutes ago. It is sad. We have had many debates on this subject and we still do not seem to be able to break through the glass wall. We know what should happen. We all talk about it. Yet we do not seem to make it happen. With no disrespect meant, the Opposition makes its contribution as well. It seems to be on the same track. I am sorry that Deputy Boyd Barrett is not in the House now. He understands this issue as well and he agrees, but of course he has a different way of going about it because he has the disadvantage of trying to further the cause of People Before Profit. Those of us who are longer on this earth know that those who operate on that basis will get plenty of work, but they are not going to get too many jobs to do on which loads of people will be paid. Likewise, with Sinn Féin. Its members understand the situation. They tend to politicise this issue to a greater extent and that is grand for those in opposition. At some stage, however, the party may be called upon to resolve the problem at the coalface and then it becomes a serious problem. That applies to all those Deputies who operate on a purely political basis from an opposition point of view.
I agree with many of the criticisms made, however. I and the Ceann Comhairle have come through periods where this kind of issue featured on many occasions, for example, in the 1970s, the 1980s, the 1990s and the 2000s. It looks now as if we will have to go through it again. That is as it is. We had the economic crash and that seriously derailed the ways and means of having a short-term resolution. By the same token, whatever happens from here on in must happen in real time, because the public will not allow, accept or countenance a long-drawn out situation regarding discussion of the whys and wherefores of what will happen if we do this or that.
Let us look at the situation in this way. An Teachta Tóibín mentioned something about it taking eight years to make a decision about a development. That is not a farce, it is true. It takes that long. It is a farce, however, insofar as the people waiting on the outcome are concerned. It is an absolute atrocity that this kind of thing should happen. Regarding the time it takes to do any of these jobs, it should be around two months. It is as simple as that. If it cannot be done in two months, then we should facilitate the public by saying that it will go up for tender and let us do it in that way. Either we can do it or we cannot do it, in which case we should admit that it cannot be done.
I seldom raise an objection to housing and I know the Ceann Comhairle is the same. If I do raise an objection to housing, then that is to tweak, relocate or shift the boundaries of that housing project, or whatever the case may be. Of course, this kind of coverage can be abused as well. For example, some time ago I saw somebody’s window looking into the back garden of somebody else’s house. Something like that is not supposed to happen in the planning process, as we all know. We were all told about what constitutes good planning. At this stage, we know what good planning is and what it is not.
I also came across a recent situation concerning a health facility. There was nothing wrong with it otherwise. It was a fine facility. Based on it being a health facility, though, all of a sudden the local authority and everybody else seemed to feel that it should get a walk through or a walk over regarding planning permission. This is in the self same area where the local people who have lived there all their lives, the indigenous population, are being refused planning permission left, right and centre. When people start to talk to me about this issue, the aspects to be considered on the one hand and on the other and then tell me that I do not understand that this is an important issue and all that kind of thing, I then ask those people if they would accept such a situation. I ask them if they would accept somebody building a block of houses at the back of their houses that overlook their garden walls and if they would be happy about that. The answer will probably be something along the lines that the people involved do not really live in the area, but 20 miles away. Of course, we know all about that.
Therefore, we need a long debate about this issue. The stilted kind of debate that we get in this type of situation is not sufficient. That is not the fault of the Minister or the Minister of State. I know they understand this issue and are manacled in the same way we are.
We must assert ourselves as elected representatives who say this is the way it is supposed to happen and this is what it states in the legislation. We must ask if people have a problem, and if they do, they should step forward so we can try to resolve it.
I could go on, as I know the Ceann Comhairle could. It must be very frustrating for him to sit there and not have the opportunity to speak on the matter. We have spoken about this many times in the past on the local authority and in this House as well. The improvements applying to the work of the Residential Tenancies Board are fine. Not all landlords are abusive of their tenants. There is a cohort of landlords who have accommodated tenants and provided special arrangements, as if the tenant were a family member. They continue to do that but do not ever get credit for it. They are moving out of the system, replaced by people with just one characteristic in common. This is where the ideas of Deputy Boyd Barrett come in, as such parties only have profit in mind. They should not have unlimited profit and that is the point. We have a position being reached where profit is stopping others from getting into the system.
I had somebody in touch with me today seeking what used to be called a local authority loan under the 1966 Act. That person has €100,000 saved but has no chance of getting the required loan. It is crazy stuff. The Rebuilding Ireland loan or what used to be the local authority loan must be brought together in such a way as to deal with such a person not in six months or six years but in a couple of weeks. We must facilitate such people not because they have been refused by the banks; they should not have to wait for that. The individual circumstances should be examined with a view to ensuring the requests can be met in the shortest time possible.
I know the Minister of State understands the matter and we have spoken about it already as well. There must be a crowd of people somewhere laughing at us, knowing we cannot break through that glass wall. For once in our political lives, we should identify this problem, which relates to taxation and affects wages and incomes all over the country. It is a reason people do not want to come to this country to fill the jobs being offered to them. That is crazy. The Ceann Comhairle and I know of cases of people leaving this country because they did not have a house and wanted to get one somewhere else.
I apologise for going on for so long. My request is for us to have a real no-holds barred debate on the matter. Let us deal with it once and for all. Some people somewhere must think we are fools and it is about time we asserted ourselves.
It is interesting the last speakers spoke about the need for a debate on the planning system. It is certainly one we might facilitate in the next Dáil session. Like Deputy Durkan, I would need to be manacled to stay silent during such a debate if it happens. The Minister of State will wrap up this important business.
I thank the Members for contributing to the debate and for the points they raised. It is interesting that a number of Deputies said the legislation was meaningless and would not serve its intended purpose, and yet they were very clear they are voting for the Bill. At the outset that seems very strange.
I refer specifically to Deputy Cian O'Callaghan's comments on the number of Bills we have introduced to protect renters, which I referenced in my opening statement. I indicated this has happened six times in the Thirty-third Dáil during the pandemic. The Deputy implied I was boasting about those Bills but I absolutely was not. I made it very clear in my statement why the previous Bill, introduced in July and which linked rental increases to inflation, did not work. I outlined the reasons for that. We are trying to respond to this so we can keep people in their homes and rents as stable as we can in what is a very challenging environment of the Covid-19 pandemic. Responding to those challenges is the Department's sole focus with these pieces of legislation.
I have been very clear in the past in outlining in this House the dysfunctional nature of the rental market. I am also very clear in my mind as somebody who attends a very busy clinic in my constituency office on a weekly basis, listening to very vulnerable people who are at their wits' end and concerned about rental increases, the availability of rental properties and, critically, their future access to sustainable housing. It is something that weighs heavily on me and the Government.
People come to this House to read emails and give details of very vulnerable constituents, and we all meet such people. Deputy Ó Murchú referenced the "single transferable speech" and it is the first time I have heard Sinn Féin refer to that single transferable speech that its Members read in this House. I would like to talk about the single transferable response we have seen from Sinn Féin. In the first instance, this is an ideology of objecting to housing. For example, a number of Deputies referred to the 854 units on Oscar Traynor Road but nobody referred to the political actions surrounding it. The development has four parks and is a mix of social, affordable and private housing of mixed tenure, which is best for society. It will have a community centre and childcare facilities all in one footprint. That was objected to by Sinn Féin. A second example is Ballymastone, where 1,200 houses were objected to by Sinn Féin.
This is the nub of the matter and it proves that Sinn Féin wants the housing crisis to escalate. We are always told in this Dáil Chamber we should have public houses on public land. Sinn Féin had a chance in Wicklow to vote for public houses on public land but those 18 public houses on public land were voted down by Sinn Féin. The view of Sinn Féin and the Social Democrats is that any additional residential development is overdevelopment, or at least that is what they indicate in submissions when they object to such projects. Sinn Féin has voted down development in local authorities and its response seems to be to object, object, object.
I can see, as part of the Government, that the solution to increasing rents and this crisis is an increase in supply. In any market where demand significantly outstrips supply, prices will go up. The sole primary response must be to increase our housing units. The last thing we need is Deputies constantly objecting to that while coming to this House trying to tell us they have a monopoly on compassion or how to represent vulnerable people in society. We in the Government benches meet every day of the week trying to help such people, but those in the Opposition continue to vote against public houses on public land. Those are the facts.
I have heard people trying to eulogise about the great responses Deputy Ó Broin would have if he had the honour of becoming the next housing Minister. In Sinn Féin's 2016 manifesto, the party clearly stated it would build 36,000 houses between 2016 and 2021. The Government delivered 39,000 houses a year earlier, by 2020. What Deputy Ó Broin may have delivered as a housing Minister is much less than what people got from the previous Government. Hearing such comments, I ask people to consider the facts and see what the parties can deliver. The Opposition can deliver one thing, which is objection after objection.
Another interesting aspect of the debate concerns why so many landlords are exiting the market, with 16,000 doing so since 2016. Of those, 85% had two or fewer properties and 75% had only one property. We need a sustainable number of landlords in the market. Nonetheless, in its pre-budget submission Sinn Féin proposed an additional tax of €400 on second units. All the landlords trying to hold on with one property would face additional taxation with Sinn Féin's policy. Deputy Ó Broin has said he does not know why they are leaving and surveys or data are being considered, but what is clear is we need a sustainable rental market. It is critical. It is what we are achieving with our cost rental model, which offers below-market rents and sustainable tenure through the €4 billion multi-annual budget in the Department. That is a record level of investment and the multi-annual element is important.
Deputy Fitzmaurice spoke on one-off rural housing. Being from a very large rural constituency, I know the importance of one-off rural housing. There was a failure to acknowledge and understand the demand for one-off rural housing as a sustainable form of housing. The reality is that people in rural areas have businesses such as agriculture, farming and large employers such as those in my area. There is Green Farm Fine Foods in Rathowen, Mergon in Castlepollard, or C&F in Collinstown. All those are outside the main arteries like Mullingar or Athlone. You need sustainable options for people like that. We are updating the 2005 sustainable rural housing guidelines. That will form part of our efforts to try to offer a sustainable alternative for people to have that right to build in rural areas and be part of their communities and keep local schools and shops open and enhance the GAA club. That is what we really want - to try to build mixed communities. As our housing increases, naturally it will be a smaller component. When we are building fewer than 5,000 houses, rural housing was the majority but as we escalate past 33,000, as we will, we need to acknowledge, understand and permit rural housing in our rural areas. We have to have a reasonable policy to allow that. I articulated that over the summer.
I am grateful to the Deputies who did give a response and put forward their views and to the joint committee for its quick examination of the legislation. I look forward to working with all Deputies in the House on it next week.