Seanad debates

Thursday, 25 November 2021

Residential Tenancies (Amendment) (No. 2) Bill 2021: Report and Final Stages

 

10:30 am

Photo of Alice-Mary HigginsAlice-Mary Higgins (Independent) | Oireachtas source

There are two fundamental issues there. First, with absolute respect and this is one of the flaws in much of the enforcement issues, the onus has been put on the tenant. Either somebody seeks to rent, because the nature of this is that these are new potential properties and new properties that are coming on stream, so one does not have a tenant who complains that the rent is too high because he or she is not in a position to be the tenant. Moreover, as I have just outlined, these properties remain empty in many cases.

Second, even if there is a tenant the power imbalance is quite substantial at the moment. The power imbalance between tenants and landlords is extremely skewed at the moment. By contrast, the power balance between the Government and landlords could be very different.It worries me that the Government does not seem to think it has sufficient powers or a willingness to engage or press harder with landlords but it could. This is a choice made by the Government.

A pattern has emerged, and it is not an individual case or a bad story. There are cases. The Residential Tenancies Board, RTB, data shows that there are 7% annual increases in rents. The Institute for Professional Auctioneers and Valuers, IPAV, which actually sells houses, acknowledges this is anomalous and wrong. It states that the figures are inconsistent with what could be expected in those areas.

The onus should not be on tenants to report this. The onus is on the State to check that the measures are working properly. With great respect to the inadvertent consequences, the Government needs to look at the inadvertent consequences of some of its measures. For example, where a property has not been let in the last 12 months, is that an incentive for a 12-month vacancy period? Funds can afford that. If one looks at the difference between a 2% annual increase and a 7% annual increase, it is worth waiting 12 months and leaving the property vacant.

I welcome the fact that there will be more information in the next quarter. We need more information. I regret that the Minister for Finance, Deputy Donohoe, did not take more of an opportunity to get more information when the property tax was being rolled out. There was a clause in that which stated that information on vacancy would only be used statistically. However, that was an opportunity to have the information on vacancy. To be honest, the issue that I am trying to tackle here is a vacant property tax. A vacant property tax that looked into that 12-month period would address this even more effectively.

In the interim, however, we need to address the fact that there are products in the financial markets that are offering portfolios of empty buildings with theoretical rental prices. I do not mean to put this on the Minister of State but there seems to be a fundamental logic that what investment funds want and the needs of housing are the same thing and that the interests are aligned. They are not the same interests. In terms of giving investment funds every single thing they want, they are not running scared; they are very confident. We have all heard the interviews about how happy they are. They are not going to run out of the market if we show proper care in the way they deliver on housing. We cannot continue to treat portfolios of investments the same as housing provision and assume they are going to align. They have different goals based on market logic. They have shareholders and boards. The goal of those boards is to maximise profits. They will use every single element of our laws to do that. In fact, if there were good boards of governance, as there often are, we strengthen the hands of those who wish to deliver better practice because they would have that fiduciary duty to maximise their profit while also working within the laws and constraints. They would want better constraints and better laws, if they were genuine in their commitment to being part of the long-term housing solution in Ireland.

I know that the Minister of State cannot accept this amendment; I knew he would not be able to do so. However, I am signalling that the answers he has been given to give me about the tenants and the needs of investors are not adequate in dealing with this problem. We have flagged this. There was a 7% increase in the space of a year in areas where there is a desperate need for rental accommodation. This is not just a flag for tenants, but it is a flag for the State. I hope that if the Minister of State cannot do it in this Bill, he will take other measures to address it, possibly through a vacant property tax. That might be one of the most effective measures.

Comments

No comments

Log in or join to post a public comment.