Alice-Mary Higgins (Independent) | Oireachtas source

First, I thank the Government, as Senator Cummins said, for accepting the principle of and using the exact wording of my amendment on Committee Stage. It is an appropriate caveat to add because it is an area in which we have seen some abuse. It has been exploited as a loophole at times. In recent editions of the Dublin Inquirer, for example, we have seen cases where service fees etc. are being added to rents and used as a loophole to get around the rent freeze or the limiting or capping of the increase at 4% and effectively there is something like a 10%, 20% or 30% increase in rent or more. I believe 70% was cited in one case. This is through service fees, car parking fees and the creation of new cost streams. It is crucial, therefore, that we pay vigilant attention to any loopholes.

The fact I worded the amendment differently in resubmission is a natural fact of having pressed the amendment on Committee Stage. A revised wording is required that addresses it from a different perspective. While, of course, I will be delighted to support the Government's amendment on this, I hope the points I am addressing will also be addressed by the Government without necessarily needing the extra language. I refer to the idea that there are appropriate maximum thresholds. I am hopeful that in its interpretation of "necessary and appropriate", the Government will be able to identify that idea of maximum thresholds.

Another effect of certain votes having been taken on Committee Stage is that I am not able to reintroduce the amendments on the removal of limited equity. When we look to the costs and, quite rightly, as Senator Cummins has mentioned, to how we minimise the costs, the two concerns I have are management fees, which could indefinitely expand, and equity return. I have a very strong concern about that because, be it is set at 3%, 4% or 5% per year, nonetheless that is a very substantial extra cost to the State or to the individual, potentially over 20, 30 or 40 years. It is effectively a subsidisation of a market investment, which is not necessary when we provide cost rental directly. If you look to how that adds up, 4% per year over a 40-year time span is an extraordinary additional cost which has been added in a situation where all our efforts are for the minimisation of costs.Unlimited equity return should not be part of that.

I am concerned about the management fees for the same reason. I am tying these issues together because they relate to certain actors whose goal is the maximisation of return for an investment, because that is their fiduciary duty. That is the problem. It is not a problem of private investment in principle but of the cost because it would be servicing a set of fiduciary expectations and a barrage of additional costs. Some of these practices have been used by private investment funds that have invested in build to rent. One of the big concerns when Part V is part of a commercial development is around the management fees, the service fees and access to the shared and public amenities.

The Government will introduce a new amendment, based on my language, around the necessary and appropriate management fees. Where within that can we ensure that, if there is a Part V affordable component within a commercial apartment building, it incorporates access to the same services and basic facilities, such as a gym, lobby or shared public space? There have been issues with Part V social housing tenants in such cases, particularly within apartments. It seems to be particularly common for them to be told that because they are not paying the commercial management fees they cannot access the shared amenities. That goes against the principle of Part V, which is about building communities with a diverse social mix, in which people cross paths and connect and have similar experiences. I am packing these issues in. I am delighted that the Minister of State is bringing forward this amendment. He has recognised management fees as a dangerous area if they are not properly identified. When this Bill is being debated in the Dáil, he should also look at what we get for those management fees. We do not want inflated management fees but we also do not want them used to exclude residents from full enjoyment of the same amenities as others within a building. That is the core point.

I will finish on the issue of equity because I will not get an opportunity to discuss it fully and it ties in to this matter. I strongly support the idea of cost rental but my greatest concern is that we may have left the door open for a certain component of that cost rental to become an investment product. Dividends might be promised for 40 years, the property may migrate back to a private owner at a later point and loopholes could be exploited in the service of shareholders or for fiduciary benefit. That is my concern. Cost rental, which is a wonderful model, would then effectively end up as something closer to the leasing model we have at the moment. We have to do everything we can to avoid that.

I am happy to withdraw amendments Nos. 16 and 17 in the context of supporting amendment No. 15. However, there are a few more issues to unpack following that.