Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I thank Senators for their contributions and the amendments tabled. The daft.iereport was mentioned. This type of information is helpful but we have to recognise that these are the renting prices being asked, not agreed. It is a much smaller data set than actual rents agreed and registered with the RTB. It produces its index quarterly on what the state of rent is in different parts of the country. It is important that we always speak about the official data and about as big a set of data as we can. While it is easy to say that rent caps are not working, if that was the belief of this House, we would not be extending them to 2021 and changing the qualifying criteria to extend outside of Dublin, Cork and the other areas in which they operate, and we would not be seeking to improve them in the way that we are. If we want to cite information from reports such as that from daft.ie, we absolutely can. According to daft.ie, rents are at an all-time high. We know that they are too high. That same report states that rents are now growing at a slow pace that has not been seen since 2013, before the rental crisis. That is important because it tells us that rent caps are working. They are slowing rent inflation but they need to work harder. They have not brought it below 4% nationally because they do not apply nationally. They have not gone below 4% across Dublin because rent caps do not apply to new properties coming onto the market. Until we pass this legislation, they will not ever apply to those new properties. As rents are set each year for properties that came newly to the market in the last two years, they will go higher than 4%. That will increase the average inflation in an area such as Dublin. Until the legislation is changed, we will not see a more consistent level of rent inflation in line with the rent caps. The RTB has said that, from the data it has seen, rent caps are working. The purpose of legislation is to improve them.

These amendments speak to the complications that we have in everything that we try to do with housing. We are trying to make sure that landlords are not abusing the idea of refurbishing or renovating their apartment or house for rent to try to get out of rent caps. We hear anecdotal evidence that they are. We published guidance on what refurbishment would look like to be able to step outside of the rent caps. We recognised that we needed to put it in law. We have to find a balance and make sure that we do not make it so difficult that landlords then stop investing in their properties and that the standards of our stock then worsen as an unintended consequence. The primary purpose of this part of the legislation is to ensure that tenants' rights are not being abused by landlords applying a lick of paint and then saying there is a 10% rent increase, for example. We have sought to define what a substantial refurbishment is. Listening to the points made by other parties and people of no party on Committee Stage, we made a further set of amendments.On substantial refurbishment and building energy rating, BER, the BER is important because if one improves the BER rating of a property, one significantly helps the tenant in terms of the affordability of the day-to-day light, heat and other utility bills because of the type of work we are doing to houses and how that is recognised in the BER rating. In addition, there will be a wider impact on the environment in terms of there being less of an impact on the climate. Everything I am trying to do in regard to the standard of buildings being built - things like near zero energy building or having minimum BER requirements for new builds - will be of significant help in the other big crisis we are facing, namely, climate change.

Two changes were made on Committee Stage to recognise the importance of BER and the points raised in regard to pre-1963 and other properties. Under one of the clauses, there are two separate BER grounds that can be invoked. If a property has a very low BER rating, a jump of three points will required because at a very low rating it is easy to jump two points with minimal work. If the property is at a higher rating, it must only jump two points, recognising that significant investment has already been made in the house to bring it up to an appropriate BER rating. If one goes two points higher on the scale in conjunction with other measures such as improving disability access and so on, one can step outside the rent caps.

The other change we have made is that if one brings the property up seven BER points, one may step outside the rent cap. That means bringing a property on the lowest point of the scale up to C2, or one on the second lowest point up to C1, for example. We must recognise that that will be very expensive to do in some properties and that a minimum BER rating for some very old properties could be very difficult to achieve, would be seen as too onerous on the landlord and may act as a disincentive to investment. That is the balance we tried to achieve. One of the amendments looked at in much detail on Committee Stage sought to link it to investment per square foot or square metre but, unfortunately, it was not possible to be certain that we could properly verify that the investment had taken place.

I know there is a particular issue around pre-1963 properties because I have met people on this issue. The solution we tried to reach on Committee Stage was the new allocation of seven BER ratings as a measure in and of itself that does not have to be combined with disability access, increasing the square footage of the property or other measures in the Bill. If one brings these very old buildings up seven points on the BER scale, that would be sufficient to step outside the rent caps. A commitment I give today on foot of the comments made is to publish the work done by the Department which demonstrates that, even in the case of a pre-1963 property with the different restrictions it has by virtue of the regulations already in effect, the system can be used to enable meaningful investment in the property and allow those landlords to step outside the rent caps because of the significant work done and the resultant significant improvements for the tenants moving into those properties.

On physical inspections, it is not always necessary to physically inspect the property to ensure it has met its requirements and obligations under the definition of substantial refurbishment. The documentation required and the fact that it must be certified is verification that the works have happened. However, if the RTB believes that is not enough or has a question mark, it has new powers for independent inspection and may inspect the property. In addition, it is now an offence backed by very serious sanctions to knowingly give false documentation or information to the RTB and a landlord cannot try to use one of the definitions or exemptions just to get around the rent caps. We have provided very strong legal provisions regarding what is allowed and that it is an offence if one does it inappropriately or misleads the RTB. We have given the RTB the powers to make inspections and we trust it to use its judgment as to what is an appropriate level of inspections and what properties should be inspected. Unfortunately, I cannot support the amendments because they have already been adequately captured in the legislation.