Alice-Mary Higgins (Independent) | Oireachtas source

The amendments address the mechanisms whereby rent may be changed over a period. It is in that context that I note that there is provision in the Bill for rent to change over a period. Rent is not set and does not remain the same. There are provisions for the changing of rent. For this to work consideration must be given to the previous points made about affordability, which we have discussed. I suggest that a way to blend that is for the Dáil to look to a period, if we are find that rent in cost rentals exceeds 35% and hits 40%, 50% or 60% of peoples' incomes, at that point there may be a mechanism to trigger an extension of the period from 40 years to, for example, 50 or 60 years. That may well be a way of combining the concerns that were expressed in the previous discussion.

I have another concern. The Minister mentioned that landlords will not be guaranteed a return. If those landlords, housing authorities, public bodies, AHBs, non-profits or co-operatives that do not have a responsibility to deliver a profit, they are able to be more flexible and, for example, work on extending the financing provision and the period of repayment and thereby exert downward pressure on the cost of the rent where that is needed to meet the criterion of affordability. That is the flexibility that one has when the actors with whom one works are not required to have a big payout and a certain number of years for an investment fund. In fact, they do not serve two masters but solely serve the social goal of achieving a short-term and medium-term provision of secure and reasonable affordable rent and, indeed, the long-term benefit of improving the rental stock.

The Minister of State, in his response, made the case for why there is a danger of a particular kind of landlord playing a key role. I am not impugning their character as they have completely reasonable motives but they simply have different responsibilities. Therefore, they are not as free to be flexible when their core social need requires further flexibility.

My amendments address that same question of flexibility.I am reasonably confident that this was not the intent in the drafting but I am concerned with the way that section 34 is drafted. Cost rental could be construed as having upward only rents. The devastation and damage caused by upward only rent reviews in Dublin city was notable. They were a plague on businesses in Dublin.

This is a small set of reasonable amendments. Where the Bill states "plus", I seek to insert "or minus" afterwards. If we are providing for the rent to increase in response to changes in, for example, the harmonised index of consumer prices, we should also provide that the rent might decrease in relation to same. My greatest concern regarding this issue is section 34(4)(c). That goes to the nub of this problem. The initial cost rental price in section 34(4)(a) is the initial maximum rent plus "an amount, calculated ... to take account of any change in the Harmonised Index of Consumer Prices". Then section 34(4)(c) prescribes that in a subsequent setting of a rent with a review, the new rent will be "the rent set by the previous setting of the rent by way of a review, plus" an amount calculated in relation to the harmonised index of consumer prices. Effectively, each subsequent review only provides for going higher and for adding to rents based on previous reviews.

There are the original costs, albeit they might need to more flexible. Amounts are added by a review that looks at consumer prices and a few years later, there is another review. This review does not simply look at the cost plus the current situation with consumer prices but looks at the cost, the previous increase, another increase and so forth. That goes to the point that, effectively, at each review no flexibility is allowed to move downward, even if we might have a whole set of reviews that are taking place in a period of time when the harmonised index of consumer prices has been deflationary. I hope we see deflation in some consumer prices, certainly in the areas associated with housing.

This is effectively upward only rent. It can be added to but not subtracted from. I am not suggesting that the original core cost rent should be subtracted from but I am saying that amounts that have been previously added under different reviews cannot be subtracted. I hope and expect that is not the policy intent. Perhaps it is simply a matter that in the drafting there was an assumption that prices will always continue to rise but it is what is provided for in the legislation.

My amendments are simple. They simply seek to insert the term "or minus" after "plus". They do not require that rents be reduced but they give the scope for a reduction if that is what is indicated by the harmonised index of consumer prices. This is a sensible set of amendments that addresses an unforeseen consequence that may arise. The amendments do not require a reduction but provide the option of a reduction. They do not impinge on the original core prices but they allow flexibility. If, for example, we have an artificial spike at a point in one review period, that artificial spike would not then carry on having a consequence for the next five, ten, 15 or 20 years.

I hope the Minister of State will be able to address this and I hope he can accept these amendments. They are sensible and reasonable.