Alice-Mary Higgins (Independent) | Oireachtas source

This goes to the core of the issue. It is one of the tests and it is sensible. Not to go back to previous amendments but with regard to the 90 days and the idea that tenants would be well aware and go in with their eyes open, I presume landlords will also do so. It should not be too much trouble for landlords to give 90 days' notice if they know the date. It would be reasonable to put the onus on the landlord to give people 90 days' notice if the date is so predictable. Certainly, landlords are more likely to be dealing with multiple properties. This is their work versus many people who may not have the same availability of time and may have to seek advice from friends on how to engage with the Residential Tenancies Board because it is not automated or to hand for everybody.

This section goes to the core of the question as to whether we are really doing cost rental. There are two strands and two reasons for doing cost rental. One is that we provide rent at an affordable cost over a period, meet the short and medium-term need for rent and have a longer period to facilitate it. The other is the outcome of the long-term piece for the State, which is that we keep cost-rental provision. The moment the costs have been paid is the point at which we get the dividend for society. This is when we are at a point at which the costs have been covered, and if rent continues to be paid, it will be in a way that continues to benefit society, where it is paid to local authorities. This will provide capital funding for future housing.

I believe that in the Vienna model such dividends as may come generally feed into the provision of more affordable housing and this is meant to be the virtuous circle that would be created. If we allow for revocation as soon as the costs are covered, we break the virtuous circle and the benefit. Effectively, this is the key. This is the difference between cost rental and leasing. If we are simply paying the mortgages on a whole set of properties plus a percentage dividend every year, which is a limited equity dividend that is more than any investor would ever get from any bank, then we are effectively saying we will pay the mortgage as well as an extra little limited equity return every year along the way and, at the end, people keep a house, home or dwelling that has been paid for and that should then be available for the public good. The costs having been paid, it becomes an asset again for trading on the market.

This is the model we currently have with leasing, whereby we have 25-year leases on whole new housing estates. The State is paying the mortgage for these 25 years and, at the end, the investor walks away with the property, sometimes with a 4% increase in rent per year. It is very similar to what we have with leasing. It is a 40-year period versus a 25-year period but if we allow investors to cash out on cost rental at a certain point, then we are in that space of leasing. I know this is not what is envisaged with cost rental but by allowing for revocation in this way, we are facilitating and incentivising it.I will come to my own amendments later as there are additional concerns in such a scenario, if we have situations where, as well as paying the mortgage, as well as paying an equity return every single year, we may also be giving a massive capital asset to developers in the form of land. That is an additional concern I will come to in the next set of amendments. However, on this general question of revocation, I find it hard to see why we have this model in the Bill. If it is approved housing bodies, our non-profits and co-operatives that are entering this area, and they are entering with the goal of housing provision, why then would they seek revocation? If it is the State or housing authorities which are entering this area with housing provision as their goal, why would they be seeking revocation? Again, I worry this is yet another example of when really good housing policies are adapted and have loopholes inserted into them just to ensure they serve the needs of one particular kind of housing provider, namely, the commercial investor. That is the kind of body which will be seeking revocations in this model and that is yet another argument against this provision. If the Government wishes to have commercial investors or investment funds in it, then so be it but the Government should not create loopholes in the law to serve them. If they wish to be part of this let them be part of it, let them take the dividends they get, let them continue to take the rent at cost-rental after the costs have been returned but the Government should not allow commercial investors or investment funds have a revocation where these homes move straight back into market pricing.