Paudie Coffey (Waterford, Fine Gael) | Oireachtas source

I assure Senators that both housing and the private rental sector are priority issues for the Government and I thank the Labour Party for tabling this motion in the Seanad. I thank all who have contributed to the debate. They are right that this is an important opportunity to discuss the challenges society faces in regard to housing provision. As Minister of State with specific responsibility for the private rented sector, I have listened carefully and look forward to further contributions from Senators. All constructive proposals and suggestions will be considered carefully.

Everyone in this room is well aware of the challenges facing us in the private rented sector. However, we must also acknowledge the progress we have made in recent years. More people are renting now than ever before. In the decade since the passing of the Residential Tenancies Act, we have seen huge strides in the development of the private rental market and it is largely unrecognisable from its position at the turn of the millennium. The Residential Tenancies (Amendment)(No. 2) Bill 2012, which I hope to bring back before this House shortly, will build on what has been achieved by the 2004 Act and, in particular, by the Private Residential Tenancies Board.

One of the most fundamental reforms the Bill will deliver will be the extension of the Act to the approved housing body sector. This will extend the same rights and obligations that are currently afforded to landlords and tenants in the private rented sector to those in the approved housing body sector. The establishment of a deposit protection scheme, which I intend to provide for on Committee Stage of the Bill in this House, will eliminate the unjustified withholding of tenants' deposits and represents a further fundamental reform in the operation of the private rental market. At this point, I should mention Senator Hayden, who has worked tirelessly in support of this project for some considerable time.

The implementation of the housing assistance payment, HAP, is a key Government priority, a major pillar of the Social Housing Strategy 2020 and another major reform in the private rented sector. The HAP scheme will eventually result in all social housing supports provided by the State coming under the aegis of local authorities. The first phase of the HAP statutory pilot commenced with effect from 15 September 2014 in Limerick City and County Council, Waterford City and County Council and Cork County Council. HAP commenced in Louth, Kilkenny, South Dublin and Monaghan county councils from 1 October. Subsequently, on 18 December, Dublin City Council became part of the statutory HAP pilot, with a specific focus on accommodating homeless households, as provided for in the action plan to address homelessness.

There are now 784 households in receipt of HAP across the seven local authority areas taking part in the pilot scheme, which is an increase of almost 300 households on the position at the end of December 2014. Significant numbers are moving on to the scheme each week and their number will continue to increase in the coming months. The target which has been set for 2015 is 8,400 HAP recipients by year end and consideration is currently being given to the sequencing of the movement of further local authorities on to the scheme in the context of the planned full roll out of the scheme which is scheduled to begin this year. I am very pleased with the progress we have made so far. Not alone will the implementation of HAP remove a barrier to employment by allowing recipients to remain in the scheme if they gain full-time employment, it will provide certainty for landlords as regards their rental income and will also improve the standard of the rented accommodation being supported significantly. A good suggestion was made here earlier that we should consider the certification of properties in regard to standards and we may elaborate on that in the future.

The standard of rental accommodation has improved considerably in recent years. The setting aside of a portion of PRTB tenancy registration fees for the enforcement of rental standards resulted in an exponential increase in the number of rental standards inspections carried out by local authorities after 2004. While there has been some criticism of inspections and the lack of inspections, there have been significant improvements in this area. Some 2,000 inspections of rented dwellings were carried out by local authorities in 2003. Ten years later, in 2013, that figure had increased to over 21,000 inspections. We are, therefore, seeing considerable improvement.This has contributed to a significant improvement in the standard of rental accommodation available to tenants today and the final implementation of the 2008 standards for rented houses regulations in 2013 continues that work.

I am conscious that we have more work to do. In the short term I intend to promote best practice in the enforcement of the standards for rented accommodation, including the adoption of risk-assessment, across the local authorities. The possibility of shared services across local authority areas is also an area to be explored. I intend also to carry out a review of the rented standards regulations to ensure that standards continue to reflect the requirements of a modern rental sector. The review, which will be carried out this year, will address not only the content of the regulations but also their implementation by local authorities with a view to disseminating best practice. We will consider the feasibility of introducing a certification system, as called for this evening by Members.

While we are moving forward with fundamental reforms in the areas of deposit protection and the HAP scheme, I am also very conscious that the level of housing supply, especially in Dublin and the larger urban centres, is less than what is required. This has led to rising rents, even homelessness in some cases, and is a significant concern for this Government. Rising rents and prices are a concern not just for the families who are finding it difficult to access suitable homes but also put at risk our competitiveness as an economy and our attractiveness as a place in which to live and to do business. As a society, we cannot tolerate homelessness and the Government is fully committed to addressing this issue. Under this Government there has been a focused and co-ordinated approach to tackling homelessness across Departments and agencies. On 4 December 2014 the Minister for the Environment, Community and Local Government, Deputy Alan Kelly, and I hosted a special summit on homelessness to reaffirm this Government's commitment to end involuntary long-term homelessness by the end of 2016.

A number of actions arising from the summit were formalised into an action plan to address homelessness and substantial progress has been made in implementingit. Among the actions was an increase in emergency bed capacity in the Dublin region to ensure that people sleeping rough would have a bed available to them should they choose to avail of it. In addition, a range of measures are being taken to secure a ring-fenced supply of accommodation to house homeless households and mobilise the necessary supports to deliver on the Government's target of ending involuntary long-term homelessness by the end of 2016. Having said that, emergency accommodation is not the solution to homelessness.

The housing-led approach, advocated in the Government's statement on homelessness policy, has been accepted as the appropriate approach to ending long-term homelessness. The efforts are to ensure that long-term sustainable accommodation with appropriate supports is provided for those in emergency accommodation. On 27 January, the Minister, Deputy Kelly, issued a ministerial direction to a number of local authorities on prioritising homeless households and other vulnerable groups for housing in their respective areas. Successfully tackling homelessness demands that a higher priority be afforded to homeless households and this needs to be translated into homeless households being allocated actual houses and not just a number on a priority list.

As I said earlier, one of the effects of the lack of supply in the market has been an increase in rents, particularly in the Dublin region. According to the most recent rent index from the Private Residential Tenancies Board, PRTB, for the third quarter of 2014, rents were 5.6% higher nationally than in the same quarter of 2013. In Dublin, which is seeing the highest rates of increase nationally, overall rents were higher by 9.5%, although the rate of annual increase was down slightly. The figures for the fourth quarter of 2014 which will be available towards the end of March will be telling and we will be monitoring them closely.

This motion notes with concern the difficulties caused by rising rents and the Minister, Deputy Kelly, and I share those concerns. These difficulties are particularly prevalent at the lower end of the market which houses our most vulnerable tenants, many of whom are in receipt of rent supplement. The rent supplement scheme, administered by the Department of Social Protection, provides support to approximately 70,700 eligible people living in private rented accommodation. Expenditure on the scheme in 2014 was approximately €339 million. The rent supplement scheme, together with the rental accommodation scheme, RAS, funds about 34% of the private rented sector market.

The Department of Social Protection has put measures in place to ensure that the housing needs of rent supplement customers who are at risk of homelessness due to rising rents are addressed by providing for increased flexibility within the rent supplement scheme. All community welfare staff have been reminded of their statutory discretionary power to award a supplement for rental purposes, for example, when dealing with applicants who are at risk of losing their tenancy. In addition, the Department of Social Protection agreed and implemented an interim tenancy sustainment protocol with the Dublin region homeless executive, the four Dublin local authorities and Threshold, with the support of Dublin Simon and Focus Ireland. The protocol applies where families in receipt of rent supplement are in danger of losing their tenancy. Since the launch of this protocol in mid-June 2014, over 340 families in Dublin have had their rent supplement payments increased by the Department of Social Protection. The Department of Social Protection continues to monitor the measures in place to ensure the appropriate supports are in place for rent supplement recipients. The interim tenancy sustainment protocol was extended to Cork city from 26 January 2015.

There have been calls to raise rent supplement limits in response to rising rents in urban areas and I can understand why this is so. There are legitimate concerns that raising rent limits may not be the solution to the current market difficulties as it is likely to add to further rental inflation and impact, not just on rent supplement recipients, but also on many lower income workers, their families and students. The Department of Social Protection is a significant player in the private rented sector and therefore not only has a responsibility for persons in rent supplement tenancies but also to the market as a whole.

I can understand the calls being made for rent regulation as a solution to this problem. However, as with raising rent supplement limits, it is important that we look at rent regulation in the context of policy for the sector as a whole. As such, I am cognisant of the possible negative impacts of rent regulation, particularly the impact on supply and the potential for black market transactions. The private rented sector is fragile with a sizeable number of landlords indicating their intention to exit the sector. In a recent Red C poll carried out for the PRTB, 29% of landlords stated they intended to sell their property as soon as possible. That is indicative of the sector.

According to Central Bank data, 38,000 buy-to-let mortgages are in arrears - that is 27% of all buy-to-let properties. My overriding objective on rents is to achieve stability and sustainability in the market for the benefit of tenants, landlords and society as a whole. In this regard, I am monitoring the rental market closely and considering all options in regard to achieving greater rent certainty. The options put forward in the recent report, Rent Stability in the Private Rented Sector, commissioned by the Private Residential Tenancies Board and published in Autumn 2014, form part but not all of these considerations. I have listened to what Members of this House and other commentators have had to say. We are monitoring rent levels very closely and will consider all options to assist in achieving rent certainty and stability in the current market.

It is also important that tenants are aware of their existing rights under the Residential Tenancies Act. The 2004 Act provides that rents may not be greater than the open market rate and may only be reviewed upward or downward once a year, unless there has been a substantial change in the nature of the accommodation that warrants a review, that cannot happen. However, a recent poll for the PRTB found that only 64% of tenants were aware of their rights under the Residential Tenancies Act. Having regard to this, the PRTB is developing a new communications strategy, which will include increasing awareness of existing rights and obligations under the legislation, and the first element in the strategy, a "Do You Know" campaign, commenced in the national press last month.

Fundamentally, the main cause of rising rents is a lack of supply in the market and the solution, to both homelessness and rising rents, is to increase the supply of homes. Social housing is a key priority for the Government, evidenced by the additional €2.2 billion in funding announced for social housing in the 2015 budget. The Social Housing Strategy 2020: Support, Supply and Reformpublished last November, sets out clear, measurable actions and targets to increase the supply of social housing, reform delivery arrangements and meet the housing needs of all households on the housing list. The Fine Gael and Labour parties in government are under no illusion about the challenges we face but we have ringfenced the funding and put in place the strategy. We have to implement and deliver on that strategy. I would expect considerable progress on that when engaging with local authorities and approved housing bodies in the coming weeks.

The total targeted provision of more than 110,000 social housing units, through the delivery of 35,000 new social housing units and meeting the housing needs of 75,000 households through HAP and the rental accommodation scheme, will address the needs of the 90,000 households on the housing waiting list in full, with flexibility to meet potential future demand. In committing to provide these 35,000 new social housing units, at a projected cost of €3.8 billion, the strategy marks a fresh start for social housing in Ireland. Deputy Landy said earlier that this is the first major social housing programme in a generation. It should be welcomed by both sides of the House.

In 2015, we will provide a total of 15,800 social housing units. This will be made up of 7,400 new social housing units and 8,400 HAP units. The total housing provision for 2015 will result in an investment of almost €800 million across a range of housing programmes, of which €119 million will be self-funded by the relevant local authorities. In addition, the implementation of the range of actions under the Government's Construction 2020 strategy will support increased supply in the wider housing market.

I wish to address the issue of affordability of houses, which Senator Ó Domhnaill raised. It is something on which policy-makers, builders and developers can reflect as well as on the cost of building a housing unit from planning to occupation. We all need to reflect - I include the industry stakeholders - on the margins and profits expected from land and for professional services. Government and local authorities must look at the cost of development charges and other charges which may occur. We need to drive down the cost of providing houses because if we do that and if we increase the supply, we will lessen the demand and the problems we face currently.

It is also key that we look at the private rented sector not in isolation, but as a key component of the wider housing market and the economy as a whole. As the motion sets out, the private rented sector now represents almost 20% of the housing market and a well-balanced housing sector requires a strong, vibrant and sustainable rented sector. Both Construction 2020 and the social housing strategy recognise the pivotal role to be played by the rented sector in our housing market and commit to the development of a national policy aimed at increasing investment in and supporting the supply of good quality, secure and affordable rental accommodation. The development of this national policy will be progressed through the social housing strategy with a planned completion date of Q4 of this year.

As I stated, we face significant challenges in the rented sector. We must consider from where we have come and the context of why we have this problem. We have just come out of one of the worst economic crashes in the history of our country. We are seeing many repossessions and many accidental landlords who are under pressure to sustain their mortgages. All of this happened against the backdrop of past governments abdicating their responsibility to build social housing. As Senators said, it is a perfect storm but that means we must respond with a strategic approach, provide funding and ask all stakeholders to assist Government in achieving more housing units for our society.

However, this is also a time of opportunity, a time to develop new and progressive policies that will guide the development of the rented sector into the future. The housing crisis has given us an opportunity to reassess our attitudes to housing and to reflect on home ownership and the rented sector. The emergence of rented housing as a viable housing option is part of this reassessment. This will mean looking closely, and in a new way, at issues such as standards, security of tenure, rent certainty and regulation and investment. We have an opportunity now to reform our rental market and make informed and progressive policy decisions regarding its future and I look forward to hearing further contributions from Senators. It is very important that we consistently engage in this type of debate.

As I said, no Minister or no Government has a monopoly on wisdom or on all the solutions and I will always listen to contributions from people who are looking for solutions and not just problems. God knows, we know the problems are there but let us find ways to address them, to meet the challenge and to deliver for our society.