Peter Burke (Longford-Westmeath, Fine Gael) | Oireachtas source

This group consists of Government amendment No. 15 and a series of amendments from Senators Higgins, Ruane and Black. Amendments Nos. 15 to 17, inclusive, deal with management costs for cost-rental homes so I will address this point before going on to address amendment No. 18, which concerns adaptation and retrofitting.

It is certainly not the intention that excessive management costs will be countenanced as part of cost-rental. Through the designation process, as set out in the Bill, all applications will be closely assessed to ensure they include only the costs that are allowable under the scheme. As such, the Minister will have discretion not to approve applications where the cost-covering rent is inflated by excessive management fees. It is for this reason that the Bill specifically empowers the Minister to press landlords for "additional and supplementary information" in order to investigate proposed costs. In addition, the provisions of section 30 empower the Minister to prescribe the format of an application for cost-rental designation, and the regulations governing this process will explain the "management costs" that are deemed acceptable. The allowable costs are, therefore, already subject to regulation by the Minister.

Senator Higgins outlined her views regarding management costs very clearly in the Committee Stage debate. The Minister of State, Deputy Noonan, then committed to looking further into this issue. While we believe the issues are sufficiently covered by existing provisions, to be constructive, I asked my officials to refer the amendment submitted by Senator Higgins on Committee Stage to parliamentary drafters in the Office of the Attorney General. It was determined that a Government amendment be moved today with the exact wording proposed by the Senator. This is amendment No. 15. I thank Senator Higgins for her contribution.

Since we are accepting Senator Higgins’s suggestion from Committee Stage, as checked with the Office of Parliamentary Counsel, I will not be supporting amendments Nos. 16 and 17, which are new amendments with new language. I do not believe these latter amendments are necessary, particularly in light of amendment No. 15.

I will now address amendment No. 18, which proposes to add "adaptation and retrofitting" to the category of maintenance costs, as submitted by the owner of a home when applying to the Minister for cost-rental designation. The issue of adaptation was also raised by Senator Higgins on Committee Stage. It was then taken to mean that the costs of adapting homes to make them more suitable for tenants with particular needs, such as due to disabilities or old age, might be included as part of the projected maintenance costs at the outset of a cost-rental project.

I appreciate the Senator's objective here but this would introduce a significant element of uncertainty into the model whereby landlords would struggle to plan for the costs of a series of potential adaptations that may, or may not, be required, decades into the future. As such, it would require the incorporation of substantial additional sinking funds in order to take account of this potential eventuality. This would add to the overall cost-covering rents from the very outset. Furthermore, funding for possible future adaptations, potentially many years after the modelling and setting of a cost-covering rent, may be available through other schemes. Adaptations to new homes at the point of completion, however, would be a known expenditure, which could be included as a capital development cost and factored into the initial setting of the rent. There may be interest from local authorities or approved housing bodies, for example, in fitting out a proportion of newly developed cost-rental homes to make them more accessible for persons with limited mobility or visual impairment. This can be done without any amendment to the legislation but I thank the Senators for raising the issue of how cost-rental can be made more accessible.

On the retrofitting point, it should be noted that all cost-rental homes will be subject to the current building standards, which are extremely comprehensive with regards to environmental factors. An application for cost-rental designation will include projected maintenance costs in order to keep the homes in good condition. This will not only take account of the replacement of things like windows and appliances on a case-by-case basis as they break or fail but also the planned upgrade at various points of windows, heating systems, lifts, roofs, etc., in order to extend the functional life of the homes. Any replacements of this nature will have to meet the energy efficiency standards in place at that time. This "life-cycling" will mean that new cost-rental homes should not require retrofitting years or decades from now.Trying to pre-empt this in legislation only creates additional uncertainty which we deem unnecessary.