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

To compare a sustainable housing tenancy in cost rental to an upward-only rent review, which is a contractual relationship on a commercial property, is to completely misunderstand what we are trying to do here. It concerns me that the Senator could make that comparison. A commercial property on Grafton Street where a tenant is commercially obliged to meet upward-only rent reviews over a period of time right through to the Commercial Court is completely different to what we are doing here.

I wish to make three points. The first relates to the actors doing this. The State will be the key actor delivering this product and it has to prove that it can do that. Second, in terms of periods of recession, if rent does drop drastically, it is in the interests of the State to keep its housing stock full. Obviously, if there are market reductions, it is important that the State tries to frame it. We want to get low-risk investment funds in. Deputy Ó Broin and others talk about getting low-risk investment funds in. Under the Austrian model, which has been pointed out at every point in time in this House, funds come in from banks to give prime financing to deliver these units. If we are providing for a reduction in rent every time the consumer price index dips down and turn it into not cost rental but a loss-making model, who is subventing that loss? Who will pick up the tab for it? If the LDA, which will provide a significant amount of cost rental, provided a significant proportion of a site in cost rental below the market value, which it will be, it will still be washing its face. In other words, it is covering the cost of the property. If it did not do that and gave further reductions, another landlord could say that this is a clear infringement of state aid rules. The State would be distorting the marketplace because it would be providing a product that is not washing its face in competition with the private sector.We must, therefore, be careful what we are suggesting here. There are so many pinch points to get through. We are providing below-cost 30% sustainable rental tenancies for families. The more numbers we get up and the more units we get on the ground, the more stabilised the housing market will be. That is what we are trying to do.