James Bannon (Fine Gael)

I welcome the Minister here today for the debate on this long overdue and important Bill.

Following yesterday's guillotining of Report Stage in the Dáil and despite the amount of time given over to it, the Bill now appears before us with 37 Government amendments having been passed without debate. Most of these amendments are substantial and involve considerable additions and changes to the proposed legislation as originally introduced. The resulting Bill now contains approximately 11 additional pages, the provisions of which have not been debated by the Dáil. It is imperative that this House now prevents this Bill being rushed through or merely rubber stamped.

The well known saying, "An Irishman's home is his castle", presents a picture of permanence and prosperity. However, for many in the rental sector, accommodation is far from castle-like and they do not have security of tenure. In many cases they are subject to the whims and financial greed of unscrupulous landlords. Those at the mercy of the private rental sector have suffered the effects of a system in chaos, which is still not regulated 100 years after the rights of tenants on the land were first established.

Tenancy in Ireland is a concept fraught with emotion and bad memories. On a "better late than never" principle, it is imperative that measures are put in place to copper-fasten the rights of tenants while at the same time protecting those of property owners. While the rights of the tenant are highlighted, it is important that landlords are granted similar and equal legislative protection. If it is passed as well structured water-tight legislation, encompassing rights and responsibilities on both the tenant and landlord sides, this Bill could revitalise the private rented sector.

We could however, be forgiven for assuming that the tenancy Bill is not high on the Government's priority list given the three year delay since the 2000 commission on the private rented sector called for its reform, along with the unprecedented delay in bringing the legislation before this House. Government indifference to the problems of tenants in the private rented sector is allied to its disgraceful neglect of local authority housing. As the last five Celtic tiger years brought affluence for some, house prices and rents soared but the output of local authority housing remained static. Some 10 % of our population are housed in local authority dwellings compared to 28% in Northern Ireland.

Under existing legislation, tenants in the private rented sector were only given security of tenure when they had lived in a dwelling rented for a period of 20 years. This left them with a lack of security comparable to Victorian times and earlier. Rack-rents and absentee landlords are never far from our minds as history repeats itself.

In the period from 1946 to 1991, the years for which census data relating to housing are available, there was a steady decline in the number of households in the State availing or able to avail of private rented accommodation. In 1946 the number of households was 173,000; in 1961 it was 116,300; in 1971 it was 96,900; in 1981 it was 90,300; and in 1991 it was down to 81,400. Given these figures urgent action must be taken to ensure the growth of this sector, which has shown an overall increase over the past three years, to guarantee its future development through strict regulation.

The four main functions of the private rented sector are mainstream housing for those who have traditionally lived in private rented accommodation; housing for young, mobile, newly formed and reformed households; employment based accommodation; and as a residual tenure of last resort.

Demand in Ireland for rented housing is a product of the interaction of a range of factors, with demographics playing an important part. The demand for rented housing is influenced by household preferences, determined by household size, number of children etc., the price of rented as against owned accommodation and consumer income levels.

The last three years have seen a significant rise in demand for private rented dwellings but this has been accompanied by shrinking supply, with enormous rent inflation in areas such as Dublin and stiff competition for accommodation. This has in no small way been exacerbated by the Government's lamentable delay in implementing its proposals for decentralisation. Rents in Dublin have risen by an average of 15% per year since 1999 resulting in even the most basic of properties being out of the reach of low income groups.

In the UK, demand in the sector has been revitalised by government policies which facilitated deregulation, strengthened landlord rights, modified security of tenure for tenants and provided attractive investment opportunities through tax incentives. Throughout Europe, affordable private rented dwellings, particularly smaller housing units, are in short supply. There is a particular shortage of student accommodation with 13 out of 30 university towns in Sweden experiencing chronic shortages. This problem is mirrored every autumn in Dublin as students queue for scarce accommodation in a financially out of reach market.

As throughout Europe, young adults in Ireland are increasingly looking to their parents to provide their first independent home. Many young people anxious to buy their first homes have become locked into a vastly over priced rental sector and are unable to even save for a deposit on a house. Within this legislation, taking into consideration current trends, it is imperative that we define the respective rights and obligations of landlords and tenants. Security for tenants, rent setting practices and mechanisms for dispute resolution must also be copperfastened.

As published, the Bill ignores important factors essential to the proper regulation of the rented sector. The loopholes with regard to the payment of tax by landlords must be firmly closed. According to the tenants' rights group, Threshold, four out of five landlords are not registered for tax. If landlords are obliged to register all tenancies with the private residential tenancies board, the tax man must be able to access the board's records to close the net on tax evaders.