Paudie Coffey (Fine Gael) | Oireachtas source

I move amendment No. 1:

To delete all words after "That" and substitute the following:"Seanad Éireann, while recognising the pressures that tenants are under following rent increases and the need for a comprehensive response to these pressures, does not accept the Rent Certainty (No. 2) Bill 2016 for the following reasons:

(a) Passage of the Rent Certainty (No. 2) Bill 2016 would be premature as:

- it pre-empts the relevant commitments in the Programme for Government and in the Rebuilding Ireland Action Plan for Housing and Homelessness, particularly in relation to the publication of a strategy for the rental sector by end 2016;

- the measure risks negatively impacting on existing and future supply of rental accommodation;

- the Bill has potential legal and constitutional implications which require careful consideration; and

(b) While the Government considers that there is some merit in the Bill in the context of the broader debate on the rental market it is premature to facilitate the passage of Second Stage at this time, pending the completion of a strategy for the rental sector by end 2016, in which the Government will be considering measures to provide greater predictability regarding rental trends for landlords and tenants.".

First, I acknowledge the thrust of the Bill. I recognise it is an effort to improve the circumstances around the entire rental sector in this country in terms of sustaining tenancies. However, if we analyse it and break it down in terms of what it would mean if it was implemented in the morning, we must look at the possible consequences of enacting such legislation.

We all are agreed there is no silver bullet to resolve what is a housing crisis in this country at present. It is a crisis for many reasons but, essentially, it is about the lack of supply. The fundamental underlying reason is we do not have enough houses to meet the current demand. That is as a result of a legacy of, as some Senators have said, a boom-bust cycle but it also means that we currently have a dysfunctional property and construction sector and we have a dysfunctional rental sector. Until we address those underlying issues of supply, unfortunately, we will not see the full resolution that we all aspire to.

The Minister for Housing, Planning, Community and Local Governmenthas already displayed that this is the highest priority for Government in terms of providing adequate housing to meet our citizens' needs. That is displayed, not only in words but in terms of funding, in terms of policy interventions, in terms of legislation and many more interventions the Minister will outline later. It all goes back to supply, and that has to be addressed if the challenges of this country are to be met in regards to increasing supply for private purchases, increasing supply for local authorities, and, indeed, the approved housing bodies in the voluntary sector, and increasing supply for the rental sector. The recent Government action plan for housing and homelessness is a proactive tangible response to meet all of those needs that are outlined under five pillars - addressing homelessness, accelerating social housing, building more homes, improving the rental sector and utilising existing housing stock. I believe if behoves all of us because it has become such a crisis of proportion that it is beyond politics in my eyes. I believe the Minister and the Government should be supported in trying to implement this Rebuilding Ireland plan.

We will need not only the policy makers to support the plan. We are depending also on the local authorities, including members and officials. We are depending on the voluntary sector and the approved housing bodies to help us achieve the challenging objectives and targets that have been set. We are also depending on the construction sector that, I suppose, has been the sector hit most in the economic recession over the past number of years. Everybody can see the legacy that happened in the construction sector.

By extension, the rental sector is also affected because the supply numbers are simply not there for a normal functioning rental market. That is why Government has proposed an amendment to the Sinn Féin Second Stage motion on the Rent Certainty (No. 2) Bill 2016. We believe the Bill is premature for the reasons outlined but we also firmly believe that we need to be careful with regard to policy interventions that could provide disincentives to landlords or drive more of them out of the market at this critical time.

The proposal is to link the rent to the consumer price index, CPI. There is a significant risk - that has been stood up by independent reports - that CPI-linked rents would, in fact, discourage new investors from entering the market and that is something we simply cannot afford at present. Recent statistics show that new registrations of tenancies in 2013 stood at 114,000 and in 2015 there has been a dip to 105,000 registrations. That clearly shows that there is a supply challenge in the entire rental sector and to make policy interventions such as proposed without thinking through their consequences could have a severe impact. The proposal might be well meaning but it could, in fact, have a negative impact in terms of the availability of properties for rent if it is not sustainable. I do not hold a candle to landlords and if one looks at the Residential Tenancies (Amendment) Act 2015, one will see a number of interventions were made that the landlord sector opposed and were not happy with. Those were positive interventions to try to sustain tenancies in this critical period until we get the construction sector back to a functioning normal mode and until we increase the supply of housing.

While it is well meaning, we need to be careful and cautious as regards this Bill. If the Bill had even some type of sunset clause over a period of two or three years, it might have allayed some fears, but the figures show that landlords, many of whom are accidental landlords, are getting out of the market and properties are being sold, which means they are not available for rental any longer. That is a problem that we need to be acutely aware of in any interventions we make.

Going back to the Residential Tenancies (Amendment) Act 2015, it is fair to say that Government made interventions at that time that were to try to sustain tenancies in rental accommodation, such as to increase the minimum period between rent reviews from 12 months to 24 months. That is to operate for a period of four years - this critical period until we get the construction sector repaired and the supply side up. Another measure was the minimum period of notice for a new rent increased from 28 days to 90 days, and that was to help in terms of sustainability. Landlords, as the House will be aware, are precluded from increasing rent above the market rate. If there is evidence where landlords are increasing above and beyond that, then tenants have recourse to appeal to the Private Residential Tenancies Board, PRTB, which will adjudicate on such matters and rents will remain at the current level until that adjudication happens.It is important to note that there are many supports available. It is recognised that there are still challenges but this is why, across parties, we need to support the Minister and the Government in terms of driving delivery of housing units across all sectors. The Government is committing over €5.3 billion to deliver over 47,000 units by 2021. This is ambitious and challenging but it is not something we cannot achieve if we align all of our forces at local, regional and national level in terms of policy-makers and the construction and rental sectors. As stated earlier, we have a lot of accidental landlords who, due to legacies of times past, are under huge debt pressures and must sustain their properties and recoup a sustainable income in terms of rent. If we are going to limit that, we could drive them out of the sector.

I know the Government and the Minister want to see more long-term lettings and more long-term sustainability with regard to rents. The budget measures will certainly help. I know sometimes they do not go as far as many would like but the help-to-buy scheme for first-time buyers will assist in increasing levels of supply because it is an incentive for such buyers to purchase new units rather than existing ones. There is also tax relief for landlords to try to keep them in the market so that they will not exit in circumstances where there are fewer properties available to rent. The increase in the rent-a-room income ceiling to €14,000 is another measure that can certainly help alleviate some of the pressures. In many of the pressure areas in Dublin, Cork, Limerick, Galway and other places, people have spare capacity in their houses and this might incentivise them to let surplus rooms to people in need or students who require accommodation. The HAP scheme, in respect of which €105 million is being allocated, has proven successful in areas where it is up and running. I know there were issues around ceilings and the scheme not being available in all local authority areas but much progress has been made with it. I can say without contradiction that we would be in a far worse situation in terms of the housing crisis were it not for the HAP scheme, which has met the needs of many thousands of people throughout the country.

I wish the Minister well with the Rebuilding Ireland programme. I fully support it and believe it is a tangible strategy that sets out a vision with funding behind it. If we can get behind the programme and address the issues on the supply side, we will, in turn, resolve many of difficulties relating to the rental sector.