Seanad debates

Tuesday, 23 November 2021

Residential Tenancies (Amendment) (No. 2) Bill 2021: Committee Stage

 

12:00 pm

Photo of John CumminsJohn Cummins (Fine Gael) | Oireachtas source

As regards the contribution of Senator Sherlock, if there was a cumulative rent increase of 4% and 4%, that was illegal and not permitted under the legislation the Government brought forward earlier in the year. If a landlord has been in breach of that legislation, that should be reported to the RTB, which the Government is financing with additional resources of up to €21 million for next year. We need to see more enforcement in respect of landlords who are breaking the rules. That is 100% certain and I make no bones about it or apology for stating it.

However, the issue I have in respect of the amendments proposing a rent freeze outright is that it sounds fantastic in theory and in a sound bite that will go out on social media, the radio or the newspapers but, in reality, every action has an equal and opposite reaction. As I stated on Second Stage, we do not have to look too far from where we are today to enlighten ourselves in that regard. The left-wing government in Berlin stated that it would freeze rents for five years to solve the rental crisis there. Eighteen months later, the supreme court struck that measure down as unconstitutional. There are tenants in Berlin who now have to pay back money to landlords. The most important result of the measure is that within 12 months there was a 50% reduction in the number of rental properties available in Berlin. That was fantastic for those in a rental property, but it was catastrophic for those seeking one.

The last thing we need in a constrained rental market is to reduce supply even further. It sounds fantastic in theory and everyone acknowledges that rents are too high, but we also have to be practical and weigh up the pros and cons of legislation. That is the different between being in government and being in opposition. In government, everything has to be weighted up and decisions made that strike a balance for tenants and landlord. That is why we are trying to increase supply. While there may not be a supply issue in Senator Sherlock's constituency, there is certainly such an issue in the vast majority of the country. That is why we are rolling out cost rental, which will compete with the private rental market and drive down rents even further. It is not that Fine Gael or I do not want to see a reduction in rents, but we have to look at the evidence from another EU country in respect of the results of a rent freeze and apply it in the same context here to determine the effect a rent freeze would have in an already constrained market. The 2% cap in terms of the harmonised index of consumer prices, or lower, as the case may be at a point in time, is a fair balance in this respect. For that reason, I cannot support the amendment.

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