Seanad debates

Wednesday, 11 February 2015

Private Rental Sector: Motion

 

2:20 pm

Photo of Paddy BurkePaddy Burke (Fine Gael)
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I welcome the Minister of State at the Department of the Environment, Community and Local Government, Deputy Paudie Coffey.

Photo of Aideen HaydenAideen Hayden (Labour)
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I move:



That Seanad Éireann: - notes that one in five households in Ireland now lives in the private rented sector;

- further notes that approximately one third of all private rented households receive State support to pay their rent under the rent supplement scheme;

- notes with concern the difficulties that households are experiencing in maintaining and accessing private rented accommodation due to rapidly rising rents, especially in urban centres;

- welcomes the strong priority given by the Tánaiste and Minister for Social Protection, Deputy Joan Burton, to addressing the housing shortage that has given rise to these difficulties; and

- further welcomes the social housing strategy announced by the Minister for the Environment, Community and Local Government, Deputy Alan Kelly, to deliver 35,000 social homes and 75,000 more secure homes in the private rented sector by 2020 and the large capital investment package put in place to support its roll out.
I welcome the Minister of State and thank him for taking this debate. I also welcome representatives of NABCO, Threshold and the Society of St. Vincent de Paul to the Visitors Gallery. I also note the presence in the Visitors Gallery of Mr. Tom Dunne, a former chairman of the Private Residential Tenancies Board, PRTB, and the Commission on the Private Rented Sector in 1999 and 2000.

As everyone is aware, we are facing a housing crisis, although there is light at the end of the tunnel. The Government has published a number of strategies in this regard. It has published a strategy to kick-start the construction sector with Construction 2020, an ambitious strategy to end long-term homelessness by 2016, and the social housing strategy which will prove, in time, to be the key in the recovery of the social rented sector which has been neglected for some time. However, it would be fair to say we do not have a strategy for the private rented sector.

In 2004 we passed the Residential Tenancies Act which was considered to be cutting-edge legislation at the time and which changed the rental market in Ireland substantially by providing for a degree of security of tenure. It provided for the establishment of the PRTB, which aims to resolve disputes between landlords and tenants. It also provided for the registration system we have in place today, under which approximately 85% of landlords are registered with the PRTB. I accept that the 2004 legislation was momentous and replaced the system under which the most a tenant could hope for in the absence of a lease was 28 days notice. That said, the legislation is more than a decade old and the situation in Ireland has changed very significantly since. One in five families today live in private rented housing. That number rises to one in four in Dublin and one in three in Galway. Effectively, the private rented sector doubled in size between 2006 and 2011 and is predicted to increase to 25% of the housing market before the end of the decade.

The motion is a composite one covering both the private rented and social housing sectors. My colleague Senator Denis Landy will deal with the social housing aspects. I will focus my attention on where we need to go in reforming the private rented sector.

We must face the reality that renting is a long-term scenario for many Irish people. That point was made starkly recently when there was a lot of media attention focused on new Central Bank rules put in place to ensure people did not sign up to mortgages that they could not afford. The aim of the rules is to ensure we do not go back to the housing bubble we saw in the past. In reality, the new rules mean that many people are facing a future in which they will not be able to enter into home ownership. Additionally, we have traditionally looked to the private rented sector to house lower income tenants who have not been able to access social housing. We now have a scenario where 32% of the entire private rented sector is being subsidised by the State through the rent supplement system. We have had a failure for many years to address the issues in the social rented sector, most of which is the responsibility of local authorities. We have seen a very significant increase in the numbers on housing waiting lists, particularly since the early 1990s. This has meant the private rented sector has become a long-term housing option for those who are dependent on the State for housing through the rent supplement system. In reality, generation rent has become the future many face today, regardless of their preference.

While it is not within the remit of the Minister of State at the Department of the Environment, Community and Local Government, the issue of rent supplement and rent caps is one which needs to be addressed urgently. Rents are rising spectacularly, particularly in urban areas and most notably in Dublin, but the rent caps have not risen to reflect this reality. Unfortunately, we are seeing instances of people being economically evicted or forced into homeless services because rent caps do not enable them to either keep or seek rental accommodation. This issue must be addressed. However, as a country, we cannot continue to follow the market, particularly in a situation where there is a serious lack of supply. Therefore, I ask the Government to consider very seriously the idea of rent regulation.

A number of European countries have strong and robust private rental sectors that provide for significant security of tenure and higher standards of accommodation than here. There has been a lack of focus on the private rented sector. Until recently, it was the norm to accept poor standards of accommodation. There has also been a failure to regulate some of the worst excesses of the market. In particular, we have seen cases of people who are ostensibly in secure accommodation under the legislation but whose landlords are now claiming that they require the accommodation for family members or that they need to sell it. This means that people are effectively losing what little security of tenure they have.

Ireland is effectively an outlier in terms of regulation, particularly with regard to rents. Through the 2004 Residential Tenancies Act, we have a measure of rent regulation in that rents can only be increased once annually to market levels. However, we are in a scenario where rents are spiralling out of control in many areas, particularly in Dublin, and organisations such as Threshold and the Society of the St. Vincent de Paul are reporting that clients are facing rent increases of between 30% and 50%. We must address the issue of unaffordable rent increases that bear no resemblance to the cost of providing accommodation. I appreciate that work is being done by organisations such as Threshold, of which I am chair, in providing the tenancy protection service, but in reality rents continue to rise and rent caps do not resolve the issue. Dealing with it on a case by case basis, as is the strategy, is not solving the problem. Therefore, we need a rent system to provide certainty. Rent increases must be reasonable and predictable if the private rented sector is to function properly. There must be a real option for individuals and families to make a home in the private rented sector. Families need to know that their children will be able to attend the same school in 12 months time if they are to put down real roots in a community.

Many arguments have been made against the idea of introducing a rent certainty model, particularly about its constitutionality. However, there is sufficient evidence, including in the recent DKM report, to suggest the constitutionality of what is known as third generation rent regulation would not be an issue in the Irish context. The argument was also made in the aforementioned DKM report that rent controls might drive landlords out of the market. However, we see that countries where there is greater regulation of the private rented sector and where there are rent controls such as the Netherlands, Germany, Belgium, France and so forth actually have much larger private rented sectors than here. We are dealing with a housing market that is very volatile and unpredictable. It can be argued that predictability is actually very good for investment in the sector in the longer run. We have a scenario where landlords can charge what they want, which means that we are dealing with a market that is effectively out of control. Having certainty would be in everyone's interests. If the market were to become more stable, there would be fewer instances of tenants over-holding.

Tenants cannot afford to pay new levels of rent and as a result they remain in a property because there is no option for them to move out or to move anywhere else. In the long run it does not favour landlords who are no longer getting any form of rent. Often it could be some years before a tenant may be moved out of a property. I know this issue will be addressed in the residential tenancies (amendment) (No. 2) Bill but a predictable market is good for landlords and tenants. In recent decades we have seen the Irish housing market rise and fall and at the end of the day we do not appear to have learned the lesson that stability in the market is better in the longer run for the overall market and for landlords and tenants.

The quality of rented accommodation is an issue. Some 58% of the almost 18,000 private rented dwellings that underwent initial inspections by local authorities in 2013 were found to be below minimum standards. The 2013 figures also reveal that no inspections were carried out and no inspection data were provided to the Minister of State's Department by 31 out of the 87 local authorities while other authorities only carried out a handful of inspections. The bottom line is that we have a scenario where those figures are not improving significantly in spite of the fact that more resources have been made available by local authorities to inspect rented properties. I suggest we need an NCT for rented housing. A landlord should not be entitled to rent out property that does not have a certificate of fitness and it should be an automatic offence to do so. With the proposed introduction of the housing assistance payment this would be a good way for local authorities to deal with the scenario where many properties do not meet minimum standards and they have difficulty in enforcing the additional law.

I wish to raise the issue of the deposition protection scheme and seek some clarification on it. The unlawful retention of deposits is still a major cause of disputes in the sector and has resulted in tenants, effectively, becoming homeless or remaining in substandard properties. We have a situation where there is a significant amount of arrears of mortgages in the buy to let market and receivers of rented properties are receiving rent but are not undertaking any of the obligations of the landlord. We need to have a change in the law that puts receivers into the shoes of landlords where they are receiving rent and it should be their responsibility to ensure that repairs are carried out.

I do not think any Government has had such a complexity of housing challenges. We have dealt with the international financial crisis, fuelled in this country by an unsustainable housing market bubble, the collapse of the banking system, the deep level of housing debt and negative equity which has not washed through the system yet, rising repossessions and homelessness, all of which are major challenges. The bailout programme has restricted our ability as a Government to act in this area. However, we see some light at the end of the tunnel and we must use this opportunity wisely if we are to avoid making the same mistakes. Our social housing strategy is relying on the private rented sector. Some 75,000 of the units under the social housing strategy are to be delivered through the private rented sector particularly through the housing assistance payment, HAP, which I believe will be an important step forward for tenants in that they will be enabled to work and pay rent according to their means. If that strategy is to work properly it must link with the private rented sector strategy. The private rented sector needs substantial reform if it is to be a long-term housing option in terms of security of tenure, certainty around rent and absolute guarantees of appropriate standards of accommodation.

2:30 pm

Photo of Denis LandyDenis Landy (Labour)
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I second the motion proposed by my colleague, Senator Aideen Hayden. I welcome the Minister of State to the House. While I will deal with some aspects of social housing I wish to make a few general points.

Currently there are more than 300,000 people living in private rented accommodation. This Government, unlike previous Governments, is tackling the problem and intends to tackle it for the remainder of its term of office. Government policy aims to provide short-term and long-term rental opportunities to citizens in an attractive way. It is true that the tradition for Irish people is to own their own homes. This probably goes back to colonial times and the fear of being put off the land or put out of the house. That is a historical fact. We are at odds with statistics in the European Union although we are catching up. In Europe, 80% of people rent and 20% of people own their homes. Our statistics are the other way around at 60:40. There is a recognition by many people in Ireland that due to economic circumstances they will end up renting on a long-term basis, therefore, we need to deal with the issues that surround the rental market. Some work has been done and I acknowledge the 2004 Act which put in place provisions on a four year tenancy and rent reviews. The 2012 Bill aims to establish protection for deposits and to deal with non-payment of rent. It also aims to extend the obligations on these issues to approved housing bodies. The Residential Tenancies Act provides that rents may only be reviewed once per year. However, rents have increased nationally between 2013 and 2014 by almost 6% and in Dublin by almost 10%. While tenants must be given 28 days notice and allowed an appeal to the Private Residential Tenancies Board the difficulty is that many tenants, particularly in rural areas, know very little about the private residential tenancies board and their rights and, therefore, on a daily basis, as politicians we are encountering people who are being denied their rights and are bullied and told they have to pay increased rents. As Senator Aideen Hayden has said some literally end up out on the street because they cannot afford the rent. They cannot seek rent subsidy as many are employed in what appears to be gainful employment but the bottom line is that they do not have the money for rent.

The Government is trying to improve the situation and is working towards reducing the number of people on waiting lists. The Government's social housing strategy aims to provide 35,000 social houses over six years and support 75,000 households to attain private rented accommodation, mainly through the housing assistance payment. In 2015 alone we will see 7,000 new social houses and almost 8,500 units secured through HAP, involving an investment of more than €800 million. I am glad the State will return to the central role of providing social housing.

I took note of the amendment tabled by Fianna Fáil which is basically a criticism of Government policy in the main. I look back to the time I was a public representative at local government level where year on year no house was built in County Tipperary by a Fianna Fáil-led Government. Suddenly, its amendment is a criticism of the efforts by this Government to address the 90,000 people it abandoned and allowed to go on housing lists across the State. I welcome amendments to motions but I do not welcome a naked criticism by people who did nothing about the problem when in charge of the ball for 14 years.

In 2014 the Government provided 6,000 units of social housing. Almost 6,000 houses have been identified by NAMA as of December 2014. It is a pity Fianna Fáil would not do some research. The reality is that 2,200 of those houses are in demand by local authorities. The houses are in areas where there is no demand by local authorities and, therefore, in many cases the houses are useless in dealing with the current housing crisis. The Government recognises the problems surrounding the private rental sector, as outlined so eloquently by Senator Aideen Hayden. It also recognises the need to come centre stage in terms of the provision of social housing. That is what the Government is going to do - 7,000 new units are being provided in 2015 and 8,500 units are being provided through HAP, an investment of €800 million. If Fianna Fáil can match that from its historical experience for people who need housing I will accept and support its amendment.

2:40 pm

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)
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I move amendment No. 1:

1. To delete all words after “Seanad Éireann” and substitute the following:
“notes that:
- the lack of housing supply is causing serious distortions in the property market;

- the dramatic increase in rents and the failure to increase rent supplement supports have put many individuals and families at serious risk of homelessness; and

- 90,000 persons are currently on the social housing waiting lists around the country;
further notes that:
- the rent caps under the Rent Supplement Scheme and the Housing Assistance Payment scheme are too low for adequate accommodation in the current rental market, particularly in urban areas;

- levels of investment in new social housing units envisaged under Construction 2020 and the Social Housing Strategy 2020 are inadequate to meet the demand for social housing and to significantly reduce waiting lists;

- the €2.2bn in social housing spending over the next three years is at the same spending levels as 2009 despite the number of persons on social housing waiting lists being 33% greater this year;

- the €1.5bn in actual exchequer funding over three years will yield around 10,000 social housing units, far short of what is actually needed;

- to date, only 518 housing units under the control of NAMA have been designated as social housing and transferred to local authorities, despite the fact that ten times that amount has been identified by NAMA as suitable;
and
calls on the Government to:
- utilise €1bn from the Strategic Investment Fund to immediately initiate a local authority home building programme;

- urgently review rent caps under Rent Supplement Scheme and the Housing Assistance Payment to take account of current market trends and increase rent allowance limits to meet the market value of rents in the private sector;

- allow families on waiting lists to move into vacant homes and defray the costs of refurbishing them from future rent;

- develop Voluntary Housing Associations to a scale where they can access credit and start to build on their own initiative; and

- establish NAMA transfer units in local authorities to accelerate the transfer of NAMA properties that have been identified as suitable for immediate use as social housing units to local authority control.”
I thank the Labour Party for tabling this important motion on the ongoing crisis in the housing sector, both private and State. My party has consistently highlighted the failure of the Government to take real action to meets its own pledges - not ours or historic pledges - to end homelessness in 2016. We believe the Government's ambition is unachievable with the resources that have been made available. Meanwhile, a vicious combination of harsh social welfare cuts and escalating rents in Dublin have driven increasing numbers of people onto the streets. This is not just Fianna Fáil's analysis. The Irish Timesreported that Fr. Peter McVerry described the Government's plans to provide 35,000 new social housing units by 2020 and end homelessness by 2016 as "fantasy" at a two-day housing conference attended by the Minister for the Environment, Community and Local Government, which ended yesterday. Fr. McVerry stated that families are being forced to sleep on the streets due to concurrent crises in the private rental and social housing sectors, and he dismissed the Government's ambition to eradicate homelessness by 2016 as unachievable with currently available resources. This is an individual whose opinions on housing are highly respected.

I note the Minister has committed to providing €1.5 billion in guaranteed up-front Exchequer investment from 2015 to 2017. That is welcome. The Government also intends to develop a new housing public-private partnership worth €300 million and to make available up to €400 million in public investment in a new housing finance entity to leverage further substantial private investment. This is a very ambitious programme but it seems those who operate at ground level do not believe the Government's promise to attack the issue.

In a spirit of positivity, I will make some suggestions that might be helpful. There has been much talk about rent control. Senator Hayden pointed out that rent control was found to be unconstitutional in the 1980s. However, the Senator also referred to the various regulatory regimes that operate in other European countries. The Government should investigate these regimes. The old system was replaced with flexible limits which balanced the interests of landlords and tenants. I am interested in hearing the Minister of State's comments in that regard.

On the issue of releasing land for housing, this should be based on the campaign slogan for the post offices, namely, use it or lose it. There is merit in the argument that planning legislation should include strong and enforceable incentives to ensure land that is bought for house building and that has planning permission is used within a set timeframe. There has been talk about doing this but there was little action. Particularly in Dublin, where the crisis is more acute, it would go a long way if we unlocked lands held up by greedy developers who are waiting for land values to rise further. We went through this previously and the lessons should have been learned.

Clearly we need to build more houses. Not-for-profit housing associations could play a greater role in building houses for vulnerable citizens, primarily because they are able to access public funding that would be off the State's balance sheet via the Housing Agency. I understand South Dublin County Council is examining a proposal to establish a housing trust, which would in effect be an arm's length building company able to borrow money from the Housing Finance Authority.

Rents should be made more affordable and, therefore, rent caps should be increased. The Minister for Social Protection has expressed opposition to increasing the rent allowance on the grounds that it would drive up rents. However, the rent allowance has not been increased over the last 12 months whereas rents have increased significantly in the Dublin area. It is not necessarily a case of one following the other in that regard. I welcome that the Dublin region homelessness executive is working with the Department of Social Protection to give community welfare officers the ability to increase rent supplement on a case-by-case basis.

A recent article in The Irish Timesasked the interesting question of whether NAMA can help to solve the housing crisis. It is possible that will go some way towards doing that. When NAMA began its work in 2010 it inherited a stock of approximately 15,000 housing units. Senator Landy noted that 2,854 of these units were deemed unsuitable or were located in areas for which there was no demand. However, I understand all of these units have since been sold or let to the private sector. Even though they may not have been attractive to local authorities because of their location, somehow the private sector has picked them up. Demand for more than 2,000 units was confirmed by local authorities, while a further 500 were still under consideration as of last year. NAMA was one of more than 50 groups attending meetings with the Minister, Deputy Kelly, last week to explore measures aimed at alleviating homelessness in the capital.

In regard to new builds, I am pleased that recent revisions to Part V provisions in the Planning and Development Act 2000 require that 10% of any development must be social housing, as distinct from the original provision which allowed developers to wriggle out of their obligations by giving cash to local authorities. I hope this new requirement will be strictly enforced.

In regard to NAMA's continuing involvement in alleviating the housing crisis, I understand the Government has given it a residential mandate that will involve construction of 4,500 units in the greater Dublin area by next year and possibly an additional 20,000 across the country in the next five years. If one applies the 10% rule to these numbers, it will mean a further 2,500 social housing units. This would make NAMA an important player in delivering the Government's plans to have 35,000 units ready by 2020. NAMA's involvement in building these properties means that cash strapped local authorities will not have to bear the up-front capital costs of construction. That burden will rest with NAMA and it will enter into long leases with approved housing bodies, which will have an option to purchase the properties concerned two thirds of the way through the lease. To finance this work, NAMA intends to package the leases and sell them on to pension funds with an attractive net yield of approximately 5%. That is very positive and I would like the Minister of State to elaborate on NAMA's role in alleviating the housing crisis.

Ultimately, however, the reality of this Government's commitment is that more than 90,000 households are on social housing waiting and 2,600 people are homeless, of whom 200 are sleeping rough. It has not yet delivered on its promises and there is a moral obligation on it to achieve the objectives it has set out.

Photo of Jim WalshJim Walsh (Fianna Fail)
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I second the amendment. I compliment the Labour Party on tabling a Private Member's motion on a most important topic for our people. I concur with Senator Hayden that there has been a failure of policy over many years. We have reached the stage where there is over reliance on the private sector to resolve the issue. That is not going to happen. We should examine the past to see where the various mistakes were made. The property bubble began in 1996 with the introduction of the coastal resort schemes. I had investigated whether the schemes would be a good investment.

The developers added the tax break to the price of the house. Given that everybody thought they would get a bigger tax break, houses that would have been bought for approximately €150,000 were suddenly priced at €375,000 with the tax break. This inflation of house prices was enormously damaging.

We were involved in many of the section 23 projects which were introduced in the early 1980s. An investor who bought a section 23 property could write off all the interest against his or her tax bill and the capital cost over 10 years. While doing that, we were starting to deprive people who were struggling to get on the property ladder by reducing the tax breaks on their mortgages. I could never understand it, and at a parliamentary party meeting I argued that it did not make sense. I have enumerated many examples of such failure of public service thinking and experience regarding what needed to be done. I place some responsibility on our “permanent government” and some on the governments in power.

I would have thought that after four years in office, the Government would soon start to take some responsibility for some of the shortcomings and failures of its policies, certainly in the housing area. I left local government in 2004, and throughout my time on Wexford County Council and New Ross Town Council I took a particular interest in housing. We had a building programme there and when I left, there were no hard cases waiting to be accommodated in council housing. The lists were practically exhausted. I accept the fair criticism that in the subsequent years at the height of the Celtic tiger we built too many houses and apartments and not enough council houses. I never accepted Peter Bacon's analysis that increasing supply until it exceeded demand would correct house price inflation. As Senator Landy said, while supply and demand is a principle of economics, housing is more than just an economic unit. It is a social necessity. There is an historic link, because of our history, to owning property. Home ownership is a legitimate aspiration in any country, and we had achieved more than 80%. This figure is decreasing and no policies have been put in place to address the fallout from it. I am particularly critical of this.

The Minister of State's father, who served on Waterford County Council, would be aware that we had a good, solid house-building programme year in year out at a time when the fiscal position was no better - and for many years worse - than it is today. However, we committed to building houses and provided tenant purchase schemes so people could acquire them. I established a housing co-operative in New Ross which brought together people in council houses with people on the council housing lists and dealt exclusively with them. In two schemes, we accommodated 25 people. People who were on the priority list and who had not been able to access home ownership were able to do it.

I would like to return to the debate because the time allocated is inadequate. It is a very important issue and I commend the Labour Party on proposing the motion. I hope, by the end of the evening, we might decide to adjourn the debate to another evening when more time could be given and people can talk more. We must address the issue and concentrate on constructing local authority houses. There is a waiting list of 90,000 and at the current rate of 3,000 per year it will take 30 years to accommodate some of those people. We have an issue in the private rented market. I have reservations about rent supplement. I have seen how it has escalated and become a burden on the Exchequer and I am not sure it is not a major contributory factor in rising rents. It needs to be closely examined. I am conscious that I am in injury time.

2:50 pm

Photo of Paddy BurkePaddy Burke (Fine Gael)
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The Senator is over time.

Photo of Jim WalshJim Walsh (Fianna Fail)
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We must get back to the position in which people can move on to tenant purchase and, when they get a little better off as their economic position improves, move to private housing schemes. In the 1980s in my town we licensed a developer to build on land the council owned and sell the houses. The council played a part in ensuring the prices were affordable. Many of these issues that could be pivotal in trying to address the existing crisis, and, let us face it, it is a crisis.

Photo of Caít KeaneCaít Keane (Fine Gael)
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I thank the Labour Party for proposing the motion. It is important we keep it on the agenda. Housing remains a key priority for the Government and for the Minister of State, Deputy Coffey, which I am sure he will say himself. The supply of affordable houses in areas where they are needed is also a key objective. The Government has been reformist in its housing proposals with the Construction 2020 strategy and the introduction of legislation that deals with three major strands of housing policy. The legislation provides a legislative basis for the housing assistance payment. We all know how it worked initially. It has been introduced, I can see it working already and it is welcome. The legislation also provides for the new tenant purchase scheme for local authorities and the reform process for the termination of local authority tenancies. This important housing legislation has brought one of the most radical reforms of public housing support, which has been badly needed for decades.

It has long been accepted that the rent supplement system was not fit for purpose and it has changed. Construction 2020, which was announced last year, contains 75 initiatives. For many reasons, including the economic climate, one cannot implement all the initiatives in a day and the strategy has been in place for less than a year. The 75 initiatives will invigorate the construction sector and meet some of the demand in the housing sector where there is a major shortfall, particularly in the Dublin area. Last May, the Government announced an additional investment of €200 million. It came from a very narrow purse that had not been available heretofore. Some €50 million was announced for social housing and €35 million for disabled housing adaptation. As well as all the negatives, we must reiterate the positive measures, which have all happened in one year.

Many developers are in NAMA and are eager and waiting to get going. They did not go into NAMA by their own volition. We are trying to get them there because they are anxious and eager to start building. Some 35,000 units of social housing will be supplied by 2020, as the Minister said on a previous occasion. The needs of a further 75,000 households will be met through the housing assistance payment and the rental accommodation scheme and the Government has, on more than one occasion, enunciated its plan for how to accommodate the 90,000 households on the waiting list. The Minister might comment on the Dublin social housing delivery task force and the plans to deal with the 31,000 households that are on the waiting lists of the four Dublin local authorities and the national plan to supply the 35,000 social housing units. In Dublin, 655 vacant units were identified. We are working through them by the month using the refurbishment grant and 245 of them have been put back in action while the remaining 410 units will be returned to the supply over the coming months.

That is also to be welcomed. The €2.2 billion was announced in budget 2015 to kick-start that project. Again all this costs money. We are bound by EU rules and have to meet our development needs in other areas also. Supplying 35,000 units by 2020 will cost €3.8 billion and we have to ensure we do that strategically.

Senator Hayden spoke about rent caps, which have been introduced in other countries. One has introduced rent caps in areas particularly where there is huge supply and one will not end up with a monopoly situation so that is one thing. The Minister of State will probably comment on that. It brings its problems as well as its values. In recent months the average rent increased by more than 4.8% and it has increased greatly in Dublin in particular. This is down to lack of supply and until that lack of supply is addressed, rents will increase because developers and private landowners will have a monopoly.

New Central Bank regulations will apply a 90% loan to value limit for first-time buyers. We need to keep an eye on that to ensure that people who want to buy can buy and that we do not have more people added to the housing lists through no fault of their own. When I bought my house there was a limit of 2.5 times earnings. It was unsustainable to have money thrown around like confetti when people seeking money for a house were offered money for a car as well. We do not want to go back to that housing model that was predicated on ever-rising house prices.

Are ten minutes gone already?

3:00 pm

Photo of Paddy BurkePaddy Burke (Fine Gael)
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The Senator has less than half a minute left. She has only six minutes.

Photo of Caít KeaneCaít Keane (Fine Gael)
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I have not even started to speak about what I wanted to speak about, including what we are going to do about social housing. Waiting lists for social housing had increased but are now on the way down. We have to ensure they are reduced further. Again it is down to supply. Another Senator mentioned NAMA. NAMA has come up trumps and has, particularly in the Dublin area, offered more than the local authorities have taken up.

We have done something in the private rented sector. However, the Minister of State must ensure that the private rented sector is fit for purpose and that the accommodation is fit for families. The rent cap is important and the Minister of State has spoken about it here.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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The Senator is over time. There are a number of amendments and many Senators have indicated.

Photo of Caít KeaneCaít Keane (Fine Gael)
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It led to queues, a black market, quangos and other things. I would welcome a debate on that issue alone to see where we could go on.

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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I welcome the Minister of State. I thank Senators Hayden and Landy for tabling this motion. I also thank my colleagues for the amendments they tabled which allow us to have a wider and richer debate.

When I first saw the motion I thought of the 150 families with children in emergency hotel accommodation, the majority of whom have been forced out of the private rental sector by spiralling rents. Effectively they have been economically evicted. We have to be very conscious of that reality. Aside from the massive cost to the State, this hotel and bed and breakfast accommodation is completely inappropriate. It is very disruptive for families and children, who may have to move schools as a result, and raises serious child welfare and safety concerns.

In this regard, I call on the Government to immediately child and family proof all forms of emergency accommodation, and to co-ordinate with the Child and Family Agency and emergency accommodation staff to ensure child protection concerns are addressed. It is increasingly of concern to me.

Moving to the substantive issue before us today, we have an acute crisis. It is not just a homelessness crisis but a housing crisis, which itself is creating the perfect storm for homelessness. The current housing crisis is two-fold. First, as several colleagues have said, there is a shortage in the social housing sector with 90,000 individuals and families on local authority waiting lists across Ireland. Second, there is a serious lack of affordability and security of tenure in the private rental sector, exacerbated by an absence of rent regulation, a rent supplement scheme completely out of sync with actual rental prices in urban areas, and an absence of legislative measures to prohibit landlords from discriminating against tenants in receipt of rent supplement.

I welcome the commitment under the Social Housing Strategy 2020 to deliver 35,000 social homes over the next five years. However, I remain concerned about the adequacy of this response since I understand that we need a minimum of 10,000 new social housing units annually to meet both the growing demand and extensive backlog. I do not understand how the Government plans to deliver 75,000 secure homes in the private rental sector since that sector too is in serious crisis with too much demand, too little supply, and insufficient security of tenure. In the absence of any rent regulation it is essentially a monopoly market with rents and market rates being dictated exclusively by landlords.

Considerable attention has been paid to the recommendation of the DKM Economic Consultants' report on rent stability in the private rented sector, prepared on behalf of the Private Residential Tenancies Board in September 2014. It stated that the introduction of rent control in Ireland would have a negative impact on tenants and the sector in general with tens of thousands of rental properties exiting the system.

This contention has been rejected by a number of organisations working in the housing sector and the economist, Professor P.J. Drudy, from Trinity College Dublin, who argue that there is no evidence of a mass exodus of landlords from private rental systems in European countries such as France, Germany, Sweden, Belgium and Holland, where second-generation rent regulation has been in place for many years. I am not speaking of rent control which is arbitrary and disproportionate. I am talking about rent regulation, which offers protection and security to tenants while allowing landlords to earn a reasonable profit. In that regard Senator Craughwell has tabled an amendment. While he used the term "rent control", I believe that may be changed. I indicate to the Cathaoirleach that I am willing to second his amendment if the changes are accepted.

Another option is third-generation rent regulation where rent is linked to the cost of inflation or the consumer price index with scope to increase rent in line with improvements to properties. The standard of private rented accommodation is extremely low. Department of the Environment, Community and Local Government statistics found that 47% of private rented accommodation nationally was substandard and in one county 100% of properties did not comply with the standards. The difficulty here and with the introduction of any form of rent regulation is agreeing the starting point market rate since the current market rate is extortionate.

Those proposing the introduction of rent regulation do not contest the position, often cited by Government, that arbitrary and disproportionate rent control would be unconstitutional as per the judgment in Blake v. the Attorney General 1982. However, we do argue that there is no constitutional impediment to the introduction of rent regulations since property rights can be proportionately restricted in the interests of the common good where there is a pressing social need. This is supported by the report of the constitutional review group 1996 and the DKM report, if it is proportionate. That is what we are arguing for.

The Supreme Court in the Blake case acknowledged that the Oireachtas would have to legislate to fill the gap. There was an attempt to do so through the Housing (Private Rented Dwellings) Bill 1981, which was referred by the President to the Supreme Court and struck down as unconstitutional because it repeated the failings highlighted in the Blake case that any permanent freeze on rents amounts to an arbitrary and disproportionate interference with property rights.

Particularly for young people, including couples, living in Dublin and other urban areas where house prices are continuing to rise, the new mortgage rules on minimum deposits will exclude many from buying their own property. For them, the only viable option is to rent. We must amend the Residential Tenancy Act 2004 to ensure greater security of tenure for these people.

Under the provisions of the current Act, tenants enter into a Part 4 tenancy after renting for six months. This should provide them with security for four years before going back to scratch. However, in reality landlords can end a Part 4 tenancy in a number of ways including: if a tenant cannot meet a rent increase; if a landlord intends to sell the property within three months; or if a landlord intends to change the use of the dwelling.

I rented for three years in Belgium. The only way my landlord could get me to vacate the property is if my landlord needed the place to live there personally. We need rent regulation and the Government must re-examine the concerns it says it has on it. Its members must go out and talk to people.

3:10 pm

Photo of Marie MoloneyMarie Moloney (Labour)
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I thank the Minister of State for coming to the House to take our motion today and Senators Hayden and Landy for spearheading this on behalf of the Labour Party. The fact that we are in government does not mean we do not use any available opportunity to highlight an issue that has become a crisis. I want to speak on the issue of rent allowance and HAP and the dependency of the unemployed and low-paid workers on rent supplement or the rent allowance. Without such support from the Government, there is no way they could afford private rental accommodation. Rent is going up all the time. People simply cannot afford it.

At the moment approximately 71,000 people are in receipt of rent supplement. The Government allocated €344 million to rent supplement in 2014, with a commitment of €297 million for rent supplement in 2015. That is in addition to the €20 million funding that has been given to the Minister of State's Department for the HAP scheme. Having said that, and others have spoken about it here, there are areas of the country where the cap is just too restrictive. I can speak about this because I come from Killarney, where private rental accommodation is very expensive. There is a demand within the private sector and landlords know they will get the rent from those who are working and who can afford to pay it. They can shove people in receipt of rent supplement out in the cold. These people are then forced to go out into rural areas, where the rent is lower and may be within the cap. That could entail the children moving school, which is a big issue if a child is settled into a school. The child might be in fourth or fifth class and have to move. The parents might have to move and might not want to tell the children why, that they simply cannot afford the rent in urban areas. It means they probably have to get a car, which they would not really have needed if they continued to live in the town. They are in and out because of after-school activities the children are involved in. There is a huge increase in cost for people having to move out the country.

By having the cap so low in areas like that, we are encouraging under-the-counter payments to landlords because people want to stay in a house. They know that if they had another €50 a week, they could meet it, so they give it in cash and clear the cap amount for the rent supplement. That is why I welcome the movement to the HAP scheme. It is a housing issue, and it should all be within the Department of the Environment, Community and Local Government. As I have been a spokesperson on social protection and this comes under that, I have been keeping a close eye on it. I have often raised it at the Oireachtas committee with regard to the caps and it seems to be falling on deaf ears among the officials in the Department, but rent supplement is one of the biggest deterrents to taking up employment for its recipients. Who can blame them? Taking up employment would result in the loss of their rent supplement, making them believe they are better off unemployed. That is why I welcome the move to HAP, because this operates as a differential rent scheme, just as if one were in a local authority house.

I have been following the progress of HAP in the areas where it has been rolled out and I will give an update on what I have found out about the HAP. The Housing (Miscellaneous Provisions) Act 2014 was enacted on 28 July 2014. HAP was being introduced on a phased basis. Subsequently HAP wave one commencements took effect from 15 September in Limerick City and County Council, Waterford City and County Council and Cork County Council, and from 1 October in Louth County Council, Kilkenny County Council, South Dublin County Council and Monaghan County Council. To date, 783 customers have transferred to HAP. Numbers are increasing at a significant rate following an initial settling-in period for the local authorities. There is a target to achieve 8,400 HAP cases in 2015, as set out in the Social Housing Strategy 2020: Support, Supply and Reform. A HAP homelessness pilot was commenced on 18 December 2014. Dublin City Council will administer the pilot on behalf of the other Dublin local authorities and will specifically target homeless households. For the information of Members, I have a breakdown by county of the HAP recipients: Cork County Council has 123, Kilkenny County Council has 188, Limerick City and County Council has 270, Louth County Council has 73, Monaghan County Council has 29, Waterford City and County Council has 76 and South Dublin County Council has 34, which is a total of 783. We need to move a little faster and roll this out to all the areas around Ireland. I want it in Kerry and I am sure other Senators want it in their counties and their areas, because people can go back to work and not be in fear of losing their rent supplement. They will pay their rent according to their income. This is a great idea and I wish we could roll it out to as many counties as possible.

I would like to mention just one small issue, if the Cathaoirleach would indulge me. I have a number of women who are subjects of domestic violence and have had to leave their family homes. While they will get the rent supplement because the officials are a bit lenient and can use some discretion, they will not get a local authority house while their name is still on the family home and we are forcing them to give up their right to the family home. It is an issue that is probably for another day's debate, but I would like to bring it to the attention of the Minister of State.

Photo of Brian Ó DomhnaillBrian Ó Domhnaill (Fianna Fail)
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To continue on the last point raised by Senator Moloney, this is an issue that affects many people, particularly where there are marital break-ups and financial institutions involved, or where people are applying for social housing and are deemed ineligible by councils even though they do not have a property, simply because their name is on a marriage certificate. It is something that should be looked at from a housing allocation viewpoint. Tonight's motion is very important. Like Senator Walsh, I commend the Labour Party on tabling it. It is a crisis in our time when we hear of people being unable to pay the rent bill at the end of the month and remain in their own house, particularly here in Dublin. According to CSO medium-term projections, 10,000 additional families will be living in Dublin every year, with only 2,000 additional housing units. That is a net shortfall of 8,000 units per year. Even if we do nothing, there will be a lack of supply.

I was looking through figures on Ireland's history in developing housing policy, from Independence back in 1921. The figures are interesting because it shows that when we broke from Britain in 1921, Irish housing policy focused predominantly on providing social housing based on the British model, but the difference was that we provided our social housing on an asset welfare basis. In other words, while the house was provided, the objective was that it would ultimately lead to home ownership. In addition, the majority of those houses were built in rural areas and a perceived value for money was obtained. We broke from that tradition, unfortunately, four or five years ago, when the focus was on the urbanisation of social housing. There is a real need for housing in Dublin and urban areas, and I will get to that in a moment, but it was a retrograde step to break from that policy and not to allow people the opportunity of building a home in rural areas.

The Department of the Environment, Community and Local Government has now effectively adopted the British policy, where all of the focus for the provision of social housing is in urban areas. While this may deal with the issue of equity, it does not deal with efficiency, for example, in cases where an individual has a plot of land that could be made available for building. A house or houses could be built more cheaply on that land than in an urban area where the land must be bought by the local authority. The Department needs to look at this option. We no longer have the old council cottages as councils do not receive funding for them and applications are no longer accepted. This is an option the Minister of State should consider making available again. These cottages are, on average, approximately 50% cheaper to build than an urban or town-based house.

In the context of urban areas, one of the issues was touched on by Ronan Lyons recently, namely, the value for money for houses. The situation changed from that of perhaps 1996 when a house might have been valued at €115,000 or €120,000 to a situation where the same house was valued at €300,000 or €400,000 in the middle of the boom. Suddenly, there was no longer any concept of value for money in regard to the building of a house. An individual might have questioned costs if the house was only valued at €100,000 or €115,000, but when the valuation tripled, nobody questioned the doubling of construction costs or the issue of costs rising by 120%.

Therefore, the challenge now for the Government and taxpayers is to try to return to a level where we are building houses that represent value for money. However, the Government appears to be going against the wishes of the taxpayer through the new building regulations that have been introduced, which are pushing up the cost of building houses. Until this challenge is taken on squarely by the Government and until there is a row back on the increased costs associated with building houses, individuals will not build houses. I know many young couples who are now questioning whether they will build and they are continuing to rent because of the additional costs introduced by the former Minister, Phil Hogan, through the new building regulations. There are other challenges also and issues about the unionisation of the construction sector and the cost of materials. These issues all add to the cost of building, whether private or social housing. These challenges need to be discussed along with the other issues under discussion.

In regard to the objective of building 10,000 units over the next three years, I do not believe this is an ambitious objective. Between the years 2000 and 2007, some 46,926 social houses were built. Now we have a national crisis, but the plan is only to build 10,000 over three years, while there are 90,000 people on the waiting list. The waiting list is up by one third since the Government came into office. There are money issues and it is great that the Government has announced it will build 10,000 units over the next three years, but it is not dealing with the cost issue of building those houses.

I agree with Senator Walsh and hope this debate will be extended. It is important we have this debate and discuss the issues calmly and rationally. We must try to come up with solutions, instead of taking political shots at each other here. That will not achieve anything. We must have a calm and rational debate on the issue and must support the Minister of State. He will get support from this side of the House, but we need to delve into the issues further. For that reason, I believe we need a longer debate on the issue so as to deal with crisis facing us.

I did not discuss the issue of the homeless. I was listening to Fr. McVerry today and was very interested in what he had to say.

3:20 pm

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
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I assure Senators that both housing and the private rental sector are priority issues for the Government and I thank the Labour Party for tabling this motion in the Seanad. I thank all who have contributed to the debate. They are right that this is an important opportunity to discuss the challenges society faces in regard to housing provision. As Minister of State with specific responsibility for the private rented sector, I have listened carefully and look forward to further contributions from Senators. All constructive proposals and suggestions will be considered carefully.

Everyone in this room is well aware of the challenges facing us in the private rented sector. However, we must also acknowledge the progress we have made in recent years. More people are renting now than ever before. In the decade since the passing of the Residential Tenancies Act, we have seen huge strides in the development of the private rental market and it is largely unrecognisable from its position at the turn of the millennium. The Residential Tenancies (Amendment)(No. 2) Bill 2012, which I hope to bring back before this House shortly, will build on what has been achieved by the 2004 Act and, in particular, by the Private Residential Tenancies Board.

One of the most fundamental reforms the Bill will deliver will be the extension of the Act to the approved housing body sector. This will extend the same rights and obligations that are currently afforded to landlords and tenants in the private rented sector to those in the approved housing body sector. The establishment of a deposit protection scheme, which I intend to provide for on Committee Stage of the Bill in this House, will eliminate the unjustified withholding of tenants' deposits and represents a further fundamental reform in the operation of the private rental market. At this point, I should mention Senator Hayden, who has worked tirelessly in support of this project for some considerable time.

The implementation of the housing assistance payment, HAP, is a key Government priority, a major pillar of the Social Housing Strategy 2020 and another major reform in the private rented sector. The HAP scheme will eventually result in all social housing supports provided by the State coming under the aegis of local authorities. The first phase of the HAP statutory pilot commenced with effect from 15 September 2014 in Limerick City and County Council, Waterford City and County Council and Cork County Council. HAP commenced in Louth, Kilkenny, South Dublin and Monaghan county councils from 1 October. Subsequently, on 18 December, Dublin City Council became part of the statutory HAP pilot, with a specific focus on accommodating homeless households, as provided for in the action plan to address homelessness.

There are now 784 households in receipt of HAP across the seven local authority areas taking part in the pilot scheme, which is an increase of almost 300 households on the position at the end of December 2014. Significant numbers are moving on to the scheme each week and their number will continue to increase in the coming months. The target which has been set for 2015 is 8,400 HAP recipients by year end and consideration is currently being given to the sequencing of the movement of further local authorities on to the scheme in the context of the planned full roll out of the scheme which is scheduled to begin this year. I am very pleased with the progress we have made so far. Not alone will the implementation of HAP remove a barrier to employment by allowing recipients to remain in the scheme if they gain full-time employment, it will provide certainty for landlords as regards their rental income and will also improve the standard of the rented accommodation being supported significantly. A good suggestion was made here earlier that we should consider the certification of properties in regard to standards and we may elaborate on that in the future.

The standard of rental accommodation has improved considerably in recent years. The setting aside of a portion of PRTB tenancy registration fees for the enforcement of rental standards resulted in an exponential increase in the number of rental standards inspections carried out by local authorities after 2004. While there has been some criticism of inspections and the lack of inspections, there have been significant improvements in this area. Some 2,000 inspections of rented dwellings were carried out by local authorities in 2003. Ten years later, in 2013, that figure had increased to over 21,000 inspections. We are, therefore, seeing considerable improvement.This has contributed to a significant improvement in the standard of rental accommodation available to tenants today and the final implementation of the 2008 standards for rented houses regulations in 2013 continues that work.

I am conscious that we have more work to do. In the short term I intend to promote best practice in the enforcement of the standards for rented accommodation, including the adoption of risk-assessment, across the local authorities. The possibility of shared services across local authority areas is also an area to be explored. I intend also to carry out a review of the rented standards regulations to ensure that standards continue to reflect the requirements of a modern rental sector. The review, which will be carried out this year, will address not only the content of the regulations but also their implementation by local authorities with a view to disseminating best practice. We will consider the feasibility of introducing a certification system, as called for this evening by Members.

While we are moving forward with fundamental reforms in the areas of deposit protection and the HAP scheme, I am also very conscious that the level of housing supply, especially in Dublin and the larger urban centres, is less than what is required. This has led to rising rents, even homelessness in some cases, and is a significant concern for this Government. Rising rents and prices are a concern not just for the families who are finding it difficult to access suitable homes but also put at risk our competitiveness as an economy and our attractiveness as a place in which to live and to do business. As a society, we cannot tolerate homelessness and the Government is fully committed to addressing this issue. Under this Government there has been a focused and co-ordinated approach to tackling homelessness across Departments and agencies. On 4 December 2014 the Minister for the Environment, Community and Local Government, Deputy Alan Kelly, and I hosted a special summit on homelessness to reaffirm this Government's commitment to end involuntary long-term homelessness by the end of 2016.

A number of actions arising from the summit were formalised into an action plan to address homelessness and substantial progress has been made in implementingit. Among the actions was an increase in emergency bed capacity in the Dublin region to ensure that people sleeping rough would have a bed available to them should they choose to avail of it. In addition, a range of measures are being taken to secure a ring-fenced supply of accommodation to house homeless households and mobilise the necessary supports to deliver on the Government's target of ending involuntary long-term homelessness by the end of 2016. Having said that, emergency accommodation is not the solution to homelessness.

The housing-led approach, advocated in the Government's statement on homelessness policy, has been accepted as the appropriate approach to ending long-term homelessness. The efforts are to ensure that long-term sustainable accommodation with appropriate supports is provided for those in emergency accommodation. On 27 January, the Minister, Deputy Kelly, issued a ministerial direction to a number of local authorities on prioritising homeless households and other vulnerable groups for housing in their respective areas. Successfully tackling homelessness demands that a higher priority be afforded to homeless households and this needs to be translated into homeless households being allocated actual houses and not just a number on a priority list.

As I said earlier, one of the effects of the lack of supply in the market has been an increase in rents, particularly in the Dublin region. According to the most recent rent index from the Private Residential Tenancies Board, PRTB, for the third quarter of 2014, rents were 5.6% higher nationally than in the same quarter of 2013. In Dublin, which is seeing the highest rates of increase nationally, overall rents were higher by 9.5%, although the rate of annual increase was down slightly. The figures for the fourth quarter of 2014 which will be available towards the end of March will be telling and we will be monitoring them closely.

This motion notes with concern the difficulties caused by rising rents and the Minister, Deputy Kelly, and I share those concerns. These difficulties are particularly prevalent at the lower end of the market which houses our most vulnerable tenants, many of whom are in receipt of rent supplement. The rent supplement scheme, administered by the Department of Social Protection, provides support to approximately 70,700 eligible people living in private rented accommodation. Expenditure on the scheme in 2014 was approximately €339 million. The rent supplement scheme, together with the rental accommodation scheme, RAS, funds about 34% of the private rented sector market.

The Department of Social Protection has put measures in place to ensure that the housing needs of rent supplement customers who are at risk of homelessness due to rising rents are addressed by providing for increased flexibility within the rent supplement scheme. All community welfare staff have been reminded of their statutory discretionary power to award a supplement for rental purposes, for example, when dealing with applicants who are at risk of losing their tenancy. In addition, the Department of Social Protection agreed and implemented an interim tenancy sustainment protocol with the Dublin region homeless executive, the four Dublin local authorities and Threshold, with the support of Dublin Simon and Focus Ireland. The protocol applies where families in receipt of rent supplement are in danger of losing their tenancy. Since the launch of this protocol in mid-June 2014, over 340 families in Dublin have had their rent supplement payments increased by the Department of Social Protection. The Department of Social Protection continues to monitor the measures in place to ensure the appropriate supports are in place for rent supplement recipients. The interim tenancy sustainment protocol was extended to Cork city from 26 January 2015.

There have been calls to raise rent supplement limits in response to rising rents in urban areas and I can understand why this is so. There are legitimate concerns that raising rent limits may not be the solution to the current market difficulties as it is likely to add to further rental inflation and impact, not just on rent supplement recipients, but also on many lower income workers, their families and students. The Department of Social Protection is a significant player in the private rented sector and therefore not only has a responsibility for persons in rent supplement tenancies but also to the market as a whole.

I can understand the calls being made for rent regulation as a solution to this problem. However, as with raising rent supplement limits, it is important that we look at rent regulation in the context of policy for the sector as a whole. As such, I am cognisant of the possible negative impacts of rent regulation, particularly the impact on supply and the potential for black market transactions. The private rented sector is fragile with a sizeable number of landlords indicating their intention to exit the sector. In a recent Red C poll carried out for the PRTB, 29% of landlords stated they intended to sell their property as soon as possible. That is indicative of the sector.

According to Central Bank data, 38,000 buy-to-let mortgages are in arrears - that is 27% of all buy-to-let properties. My overriding objective on rents is to achieve stability and sustainability in the market for the benefit of tenants, landlords and society as a whole. In this regard, I am monitoring the rental market closely and considering all options in regard to achieving greater rent certainty. The options put forward in the recent report, Rent Stability in the Private Rented Sector, commissioned by the Private Residential Tenancies Board and published in Autumn 2014, form part but not all of these considerations. I have listened to what Members of this House and other commentators have had to say. We are monitoring rent levels very closely and will consider all options to assist in achieving rent certainty and stability in the current market.

It is also important that tenants are aware of their existing rights under the Residential Tenancies Act. The 2004 Act provides that rents may not be greater than the open market rate and may only be reviewed upward or downward once a year, unless there has been a substantial change in the nature of the accommodation that warrants a review, that cannot happen. However, a recent poll for the PRTB found that only 64% of tenants were aware of their rights under the Residential Tenancies Act. Having regard to this, the PRTB is developing a new communications strategy, which will include increasing awareness of existing rights and obligations under the legislation, and the first element in the strategy, a "Do You Know" campaign, commenced in the national press last month.

Fundamentally, the main cause of rising rents is a lack of supply in the market and the solution, to both homelessness and rising rents, is to increase the supply of homes. Social housing is a key priority for the Government, evidenced by the additional €2.2 billion in funding announced for social housing in the 2015 budget. The Social Housing Strategy 2020: Support, Supply and Reformpublished last November, sets out clear, measurable actions and targets to increase the supply of social housing, reform delivery arrangements and meet the housing needs of all households on the housing list. The Fine Gael and Labour parties in government are under no illusion about the challenges we face but we have ringfenced the funding and put in place the strategy. We have to implement and deliver on that strategy. I would expect considerable progress on that when engaging with local authorities and approved housing bodies in the coming weeks.

The total targeted provision of more than 110,000 social housing units, through the delivery of 35,000 new social housing units and meeting the housing needs of 75,000 households through HAP and the rental accommodation scheme, will address the needs of the 90,000 households on the housing waiting list in full, with flexibility to meet potential future demand. In committing to provide these 35,000 new social housing units, at a projected cost of €3.8 billion, the strategy marks a fresh start for social housing in Ireland. Deputy Landy said earlier that this is the first major social housing programme in a generation. It should be welcomed by both sides of the House.

In 2015, we will provide a total of 15,800 social housing units. This will be made up of 7,400 new social housing units and 8,400 HAP units. The total housing provision for 2015 will result in an investment of almost €800 million across a range of housing programmes, of which €119 million will be self-funded by the relevant local authorities. In addition, the implementation of the range of actions under the Government's Construction 2020 strategy will support increased supply in the wider housing market.

I wish to address the issue of affordability of houses, which Senator Ó Domhnaill raised. It is something on which policy-makers, builders and developers can reflect as well as on the cost of building a housing unit from planning to occupation. We all need to reflect - I include the industry stakeholders - on the margins and profits expected from land and for professional services. Government and local authorities must look at the cost of development charges and other charges which may occur. We need to drive down the cost of providing houses because if we do that and if we increase the supply, we will lessen the demand and the problems we face currently.

It is also key that we look at the private rented sector not in isolation, but as a key component of the wider housing market and the economy as a whole. As the motion sets out, the private rented sector now represents almost 20% of the housing market and a well-balanced housing sector requires a strong, vibrant and sustainable rented sector. Both Construction 2020 and the social housing strategy recognise the pivotal role to be played by the rented sector in our housing market and commit to the development of a national policy aimed at increasing investment in and supporting the supply of good quality, secure and affordable rental accommodation. The development of this national policy will be progressed through the social housing strategy with a planned completion date of Q4 of this year.

As I stated, we face significant challenges in the rented sector. We must consider from where we have come and the context of why we have this problem. We have just come out of one of the worst economic crashes in the history of our country. We are seeing many repossessions and many accidental landlords who are under pressure to sustain their mortgages. All of this happened against the backdrop of past governments abdicating their responsibility to build social housing. As Senators said, it is a perfect storm but that means we must respond with a strategic approach, provide funding and ask all stakeholders to assist Government in achieving more housing units for our society.

However, this is also a time of opportunity, a time to develop new and progressive policies that will guide the development of the rented sector into the future. The housing crisis has given us an opportunity to reassess our attitudes to housing and to reflect on home ownership and the rented sector. The emergence of rented housing as a viable housing option is part of this reassessment. This will mean looking closely, and in a new way, at issues such as standards, security of tenure, rent certainty and regulation and investment. We have an opportunity now to reform our rental market and make informed and progressive policy decisions regarding its future and I look forward to hearing further contributions from Senators. It is very important that we consistently engage in this type of debate.

As I said, no Minister or no Government has a monopoly on wisdom or on all the solutions and I will always listen to contributions from people who are looking for solutions and not just problems. God knows, we know the problems are there but let us find ways to address them, to meet the challenge and to deliver for our society.

3:40 pm

Photo of Kathryn ReillyKathryn Reilly (Sinn Fein)
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I welcome the Minister of State. I would like to address very briefly news reports from this evening on comments made by the Minister for the Environment, Community and Local Government, Deputy Alan Kelly, who called on social justice campaigner, Fr. Peter McVerry, to be more positive in his comments on the housing and homelessness crisis. However, as we are all aware, Fr. Peter McVerry, who works at the coalface, knows more than most the reality of this crisis. Sometimes it is not easy to sugar-coat what is a dire situation. It is important that we, the Government and the Minister recognise that comments made by such campaigners are constructive, with people's best interests and well-being at heart and the desire to find a long-term sustainable solution. It is important we remember that and I, for one, would like the Seanad to distance itself from some of those comments made this afternoon.

However, in the vein of remaining positive, there is nothing negative in what the Labour Party has stated in its motion. While it succeeds in outlining some of the problems in terms of the housing and homelessness crisis, it proceeds to use the motion to perhaps self-congratulate itself and give itself a pat on the back.

I would like to touch on some of the issues at hand. Much has been said about the private rented market, an issue on which I would like to touch, as well as the strategy in regard to it. We must remember the private rented market will not alleviate this problem, which is deeply entrenched. A number of Senators mentioned that the State, through local authorities, has far too low a stake in housing and has failed miserably a section of society for which the private rented market is unwilling or, indeed unable to provide. Private landlords are not in the business of renting rooms out of the goodness of their hearts and to believe so would be naive.

Of the 7,400 homes promised by this Government, it is clear that approximately 5,000 will come from the private market. The plan, for the most part, is not necessarily to build or acquire homes for rent by local authorities but to provide access to 5,000 private homes through long-term leasing or shorter term arrangements with private landlords. It is important to be aware of the realities of the private market.

As many Senators mentioned, we have more than 200,000 people in need of housing in the State and many are children who are living in emergency accommodation, sleeping on couches and sharing beds, very often in houses essentially not fit for habitation, whether damp or otherwise. I cannot count the number of friends who have struggled and have had to settle for extortionate rent rates for very poor quality accommodation. I am sure we all have stories about people queueing outside an apartment for almost an hour only to be turned away before they could view it. From where will these 5,000 private rented properties come? If they are not delivered, what will happen next? What is the alternative? What is the contingency plan? There has not been enough building or refurbishment of many of these homes.

As was mentioned, the crisis is continuing to escalate with almost 90,000 people on the social housing waiting list, and at a time when rents are rapidly increasing and the number of homes available is decreasing. The statistics show that. The solution will not be a case of waving a magic wand but it will be very multifaceted. The two main prongs of it are relatively simple. We need to build more social housing, through local authorities, by investing in local authority housing and supporting local authorities in creating arm's length trusts that can raise finance to build, as needed. The plan currently is to subsidise further private landlords and developers who are already getting €0.5 billion per year. We are hoping they will build thousands of houses for rent, despite their failure to do so to date.

As mentioned by many Senators and the Minister of State, some type of regulation of the rental market is required. This would set a market rate not purely based on the desperation of renters to have a roof over their heads but on the quality of accommodation and the consumer price index. It would limit the ability of landlords to raise rents to a certain percentage between and during tenancies. These measure would foster a more secure rental market and encourage more responsible and professional landlords into the private market.

The evidence to date clearly shows the only solution is more housing and cheaper housing. It is the responsibility of the Government of the day to deliver such housing. We subsidise the private market by nearly €0.5 billion a year. Therefore, we need to make sure we provide housing and that the vast bulk of funding is invested in real social housing to be provided by local authorities. That is my contribution.

3:50 pm

Photo of Gerard CraughwellGerard Craughwell (Independent)
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I move amendment No. 1 to amendment No. 1:



To insert after the last paragraph:

“ - introduce Rent Control measures as a supply side ‘equilibrium intervention’ until the housing supply market is stablised.”
Tá fáilte romhat a Aire Stáit. I thank the Minister of State for being here. Once again, I commend him on his patience as we work our way through this matter. I thank Senator Hayden and my colleagues in Fianna Fáil for bringing forward this important issue.

As far as I am concerned there are three major issues in the rental market - rent regulation-----

Photo of Paddy BurkePaddy Burke (Fine Gael)
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I understand the Senator wishes to amend his amendment.

Photo of Gerard CraughwellGerard Craughwell (Independent)
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Yes. There was a drafting error in my amendment. It should read:



To insert after the last paragraph:

"-introduce Rent Regulation measures as a supply side equilibrium and intervention until the housing supply market is stabilised."

Photo of Paddy BurkePaddy Burke (Fine Gael)
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The correction will be made.

Photo of Gerard CraughwellGerard Craughwell (Independent)
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I thank the Cathaoirleach. Much has been made of the constitutional nature or otherwise of rent regulation. However, some limited rent regulation already exists in the 2004 Residential Tenancies Act. Recently legal advice offered, thanks to Senator Hayden, by a practising barrister, on rent regulation stated there is no constitutional impediment to rent regulation. The barrister stated that rent certainty was constitutional and in the interest of the common good and social justice. A solution to the problem of huge sudden increases in rent is to tie rental increases to the rate of inflation as determined by the consumer price index, CPI. This would ensure a more steady approach to rents as they would be linked to the cost of living in the country rather than on sudden swings in the property market. This would give tenants more certainty but should also guarantee landlords a steadier income flow.

I want to be fair to both sides. It is important that we take on board some of the concerns of the landlords. I know property owners will argue that regulation will result in insufficient income to maintain standards, their properties will fall into disrepair and overall there will be a reduction in accommodation available. They have stated that an analysis of the supply impact shows that, potentially, between 52,000 and 89,000 rental properties could exit the sector over time due to the impact of net yields for landlords. Rents tend to be higher the greater the contraction in supply due to black market transactions. In light of this, any regulation must bring with them certain guarantees for landlords and those guarantees must form a part of regulation that is brought forward.

Another argument put forward by property owners against rent regulation is that such regulation destabilises rental markets and have a negative effect on labour mobility. The solution is to have an efficient, fair and swift judicial system. I have seen evidence from landlords and property owners where people have walked away. I have seen one landlord left carrying the can for €65,000 in unpaid rent across his properties. I can understand there is a need for swift action where there are deviant tenants. I fully support the move while calling for regulation at the same time.

With rent regulation there must be a review of the unfair and inequitable tax treatment which is driving investors out of the private rental sector. Investment in property is a business after all; it is not a hobby. Buying a property in order to rent it out is a fairly major undertaking. There must be a realistic approach from a tax point of view. Landlords must be allowed to claim 25% of interest paid to purchase or renovate a property and that is a reasonable request. The local property tax for landlords should be allowed to be offset against tax also.

Security of tenure is a serious issue. One year leases must stop if we are talking about long-term solutions for families because a family could move into a property and a year later find themselves on the street. A major weakness in the Residential Tenancies Act 2004 is that landlords can vacate a property on grounds such as required for a family member, intending to refurbish the property or selling the property. The notice of termination of lease is wholly inadequate for tenants, with some tenants who have lived in properties for more than two years given only 56 days notice to vacate the property. With a shortage of rental properties on the market at the moment, many families are faced with an impossible dilemma of finding a similar property in the same location at a similar rent to what they were paying. This has a detrimental effect on families with children who attend schools in a particular area. Only last week Fr. McVerry contacted my office to inform me about a case where a young single mother with a three-year old child was made homeless and lived on the street who goes to his premises at night seeking accommodation. That woman has to report to a Garda station each night in order to receive emergency accommodation.

I compliment the Minister of State and the Minister, Deputy Kelly, on the marvellous job they have done with respect to the people who sleep rough. That accommodation is now full. I compliment them both on the measure but we have got to go a little bit outside that initiative.

I am concerned about the properties that were purchased originally as buy-to-let properties. They are now being repossessed by banks and the banks are absolutely heartless. The receivers move in and their job is to take the property back and take ownership of the property. With respect to deposits and things like that there is no requirement for banks to refund deposits. We must protect tenants who are in properties that are owned or repossessed by banks. If tenants are paying their rents and are good and obedient tenants there is no reason they should be asked to leave a property.

The next issue is standards in rental properties. I note the point the Minister of State made in his speech. Standards in rental properties have increased over time. In terms of the inspection system that is operated at the moment, I have received complaints from landlords that minor problems result in the lack of certification which causes all sorts of problems. We need a realistic approach to the inspection regime.

Bedsits are another issue that has been raised with me. I am not talking about the dingy hovels that we used to have years ago. In Waterford city, which is not far from where the Minister of State comes from, there are a number of what I call bedsits on the old Cork Road or the Cork Road, if I am not mistaken and they are located on either side of the road. It is where elderly people can rent a room with bathroom facilities and all amenities are in one room. If he has not seen them then I ask him to take a look at the accommodation. It is an excellent solution where somebody does not want to find themselves meeting the costs of a single apartment.

In conclusion, I thank the Minister of State once again for taking the time to listen to me and I appreciate the Cathaoirleach allowing my amendment.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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Is the Senator pressing the amendment to the amendment?

Photo of Paddy BurkePaddy Burke (Fine Gael)
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Is there a seconder?

Photo of Gerard CraughwellGerard Craughwell (Independent)
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Yes, Senator van Turnhout already seconded it, in advance.

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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Yes, I took it that when I spoke I would be seconding it.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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The Senator has spoken already.

Photo of Gerard CraughwellGerard Craughwell (Independent)
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The Senator seconded it when she spoke earlier.

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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I indicated. Either I moved it or seconded it but I did indicate it very clearly.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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One cannot second an amendment in advance.

Photo of Gerard CraughwellGerard Craughwell (Independent)
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Then the Senator moved it and I second it.

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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I indicated when I spoke earlier.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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Senator van Turnhout could not have done so. Senator Barrett might second it.

Photo of Sean BarrettSean Barrett (Independent)
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Has the Cathaoirleach invited me to associate myself with Senator Craughwell?

Photo of Gerard CraughwellGerard Craughwell (Independent)
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We are looking for a seconder.

Photo of Sean BarrettSean Barrett (Independent)
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I am delighted to do so and I thank the Cathaoirleach.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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Is Senator Barrett seconding the amendment?

Photo of Sean BarrettSean Barrett (Independent)
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I will and I thank the Cathaoirleach.

Photo of Tony MulcahyTony Mulcahy (Fine Gael)
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I felt a need to make a contribution because I could not stick hearing terms such as a magic wand and stuff like that being said, and certainly by one of my colleagues in Sinn Féin. We need a magic wand to resolve the issue. However, we need to be realistic about where we have come from and where we want to go. Let us remember that three or four years ago we were borrowing €18 billion. The fact that the Government has put a plan in place to start to correct this problem is a huge initiative in itself. There have been claims that public representatives are unaware of the housing crisis. As public representatives, and I have been an elected representative for over 20 years, we hear about the crisis every day of the week and it is not news to us. The question is how does one resolve the problem. One must get to the stage of getting money in order to invest in housing and we must try to solve the problem in a variety of different ways.

In regard to the homeless issue, I heard a priest in Cork say that he knew 25 to 30 homeless people who unfortunately wanted to live on the street, and irrespective of what accommodation he could provide them he could not get them off the street. That is a challenge. It is a sad situation but it is a fact and is true. When we look at this problem we can see that, historically over a long period, we built no houses. Therefore, it should come as no surprise there is a housing shortage. When we arrived into this crisis in 2011 we did not have any money to build houses and that is a fact.

I welcome the motion that was tabled tonight.

I welcome the initiative by the two Ministers and think they are doing a fine job in a short space of time. We have a lot of work to do to pull this together. I would like to see the housing assistance payment scheme being rolled out in as many counties as possible as quickly as possible. We have a crisis in my town. We have a difficulty with the banks which are not going to give money to builders - I am talking about the ordinary fellow who was building 30 or 40 houses - to start schemes. We have serviced land available - a couple of hundred acres - but an ordinary builder cannot a the loan to start. I am talking about affordable houses worth €140,000 or €150,000. There is, therefore, a need to address the banking side of the issue, as well as the needs of the private builder, if we want him or her to come on board, but it seems the banks just do not want to raise the funds needed to restart development. Many young couples would still buy houses and 25% to 30% would actually come off housing lists. There are working couples who just cannot find a house and have to rent privately, although they would buy, if they could find one.

I fully support the motion and the Minister of State's initiatives.

4:00 pm

Photo of Sean BarrettSean Barrett (Independent)
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I welcome the Minister of State. This is the most important issue facing us and we have to learn the lessons of the collapse. In this regard, the banking inquiry is coming to terms with some of the problems that arise on a daily basis.

We lost the building society movement. Historically, that was the way people were able to acquire houses and there was a very high rate of home ownership. The building societies, however, began to change their investment and invested in commercial properties, lending to the property sector, not to individuals who were hoping to buy a house. In this regard, I think of the Educational Building Society which broadly was philanthropic. With it teachers could buy a house on 2.5 times their income. We lost this and I do not know if it is possible to bring back the building society movement, but it did play a role. Because they are dependent on short-term finance, banks are particularly unsuited to meeting the long-term commitment required in the housing market. I hope, therefore, that we can interest pension funds in entering it. The banks created the bubble and caused the crash.

The aspiration people had - our parents and grandparents - of buying a house on 2.5 times their income is now beyond the reach of so many. Why are people in negative equity, with huge house prices and so on? Mr. Brendan Burgess appeared before the finance committee a while ago and estimated that regulations and the cost of planning and so on added about €67,000 to the cost an average house. Mr. Ronan Lyons, my colleague at TCD, has pointed to some of the planning rules being too strict in the context of apartments, although we do not want to go back to the days of the bedsit Senator Gerard P. Craughwell described. Let us not do things which in some contexts might seem worthwhile but which push up the price of houses.

I commend the intervention of the Central Bank on the issue of the 20% deposit, as it was the correct decision. The lower the deposit required the higher the rate of house price inflation. There is a massive rate of return on the equity of owners, which diverts money from normal savings towards property. A house is somewhere people live; it is not an investment. There should be a much stricter rate of capital gains tax on the equity gained from the appreciation in house prices. I have seen advertisements stating, "This house is a snip at €10 million". That probably means it could be sold for €12 million in 18 months time, making €2 million without any taxation. We do not want such people in the housing market. If capital gains tax could be introduced for flipping houses in such a way, it would take the pressure off.

I remember the headline on an article by Mr. Anthony Downs from the Brookings Institution in Washington, "Too much capital for housing". If there is an inelastic supply of housing and too much capital is pushed in, the impact is on price, not supply. We conducted that experiment at serious cost to so many young people who are in negative equity and in terms of the destruction of the banking system and the property sector. Massive damage was done.

On the rented sector, to which other speakers referred, particularly as regards buy-to-lets, we have to get across to investors that when they buy a loan book from a financial institution, they are buying a flow of incomes. Their case is against the landlord or the owner of a buy-to-let - "landlord" may be too pompous a title for those who bought an extra house for their pension and were not in the property sector in a professional capacity - not the tenants. We had good discussions with the former Minister, Deputy Alan Shatter, while he was still in office, to the effect that we needed a Bill of Rights for tenants. That is why there is a much bigger rented sector in very prosperous countries such as Germany and Switzerland where tenants feel they are protected by the law. The price people pay for the loan books reflects the property rights and entitlements of tenants. We should make it clear that as a Parliament we stand with the tenants. Investors are not allowed to expel tenants because it is the person who took out the mortgage who is broke and their action is against that person, not the tenants. Tenants need to have rights.

We should aim again to have finance available on 2.5 times a person's income, as was the case in the past. Although real incomes have increased, house prices have risen so much faster.

On the issue of social housing, there was an extremely good report produced by a committee chaired by the late Dr. Garret FitzGerald. We had problems with social housing. First, it cost too much. According to the Lord Mayor at the time, Mr. Gay Mitchell, maintenance costs were extremely high and it was very difficult to collect rents, even when people's incomes increased. About 20 years ago houses were sold off at a huge discount. As a consequence, we do not now have the stock of social housing we need to deal with the homelessness problem the Minister of State has been addressing. Reorientation is under way. A house is a place in which to live; it is not a vehicle to avail of tax breaks or make tax-free capital gains. If that is where we place the emphasis, debates such as this will prove to be very worthwhile. This House should assist the Minister of State and the Minister, Deputy Alan Kelly, in dealing with the problem. It is a privilege to be able to do this. The get-rich-quick by flipping houses strategy did serious damage to the economy and the banking system and deprived us of investment in other areas. Not repeating the mistakes of the past has to be our goal.

Photo of Ivana BacikIvana Bacik (Independent)
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I welcome the Minister of State, Deputy Paudie Coffey. I support the Labour Party Private Members' motion on the subject of housing to which Senators Aideen Hayden, Denis Landy, Marie Moloney and other colleagues have spoken with great eloquence. Having listened to Senator Sean D. Barrett, we would all agree with him on the adverse consequences for Irish society of the commodification - in fact, the fetishisation - of property to be bought and sold, rather than used as a home, somewhere we live. During the boom years not enough attention was paid to this aspect of the housing bubble.

There is a serious issue following years of neglect. There was the absence of a social housing construction programme during the boom years. Because of this, we are now facing the very serious issues addressed in the motion of rising rents, long waiting lists for public housing and the scandal of families being left homeless. This is a legacy issue which the Government has to tackle. A good deal of it is down to the lack of housing supply in particular areas where there are long waiting lists, as Senator Denis Landy and others discussed. It is very positive to see a social housing construction programme being announced, for which I commend the Minister of State and the Minister, Deputy Alan Kelly. We all welcome the social housing strategy which aims to deliver 35,000 social homes, with a further 75,000 homes in the private rented sector by 2020. There is to be a large capital investment programme. There is no doubt such a programme is long overdue and the sort of investment we should have seen when money was available. It will have a tangible effect in tackling what is a serious problem, although there are other measures that need to be taken, including, in particular, providing some protection for those in the private rented sector.

Other measures need to be put in place and in particular we need some form of protection for those in the private rented sector now. Some form of rent regulation is a necessity and I agree with all of those who raised that issue.

Finally, I welcome the Government's very quick response to the homelessness issue through its resourcing of homeless services in Dublin. This has been a very particular issue of which we are all aware. We are all aware of the tragedies and deaths of homeless people and it is good to see initiatives like the night cafés being rolled out so swiftly.

4:10 pm

Photo of Aideen HaydenAideen Hayden (Labour)
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The Minister of State's comment to the effect that no party has a monopoly on wisdom in the context of housing is appropriate. Numerous Governments over many years have made very positive advances in the context of housing. In fact, the very first Cumann na nGaedhal Government in 1922 introduced the £million plan, which was the first extensive social housing programme of the Free State and subsequent Fianna Fáil governments introduced very significant social housing programmes. It was the former Deputy Bobby Molloy who put in place the Commission on the Private Rented Sector and a Fianna Fáil Government that brought in the 2004 Residential Tenancies legislation, the Planning and Development Act and improved rental accommodation standards. This Government has progressed a lot of those earlier strategies very significantly. There has been a huge commitment to bringing these strategies forward. Mistakes have been made; there is no doubt about that. As far back as 1973 the then Government started to abolish rates for the provision of local authority housing and it was a Fianna Fáil Government in 1977 that finished that programme, which effectively made the local authorities dependent on central government for all of their housing funding. We have paid a big price for that.

I very much welcome the promised introduction of a deposit protection scheme. A lot tenants have been made homeless or have had to remain in unsuitable accommodation because they have not been able to get their deposits back. I also welcome the Minister of State's comments on the HAP scheme. It is a long overdue development that the system for dealing with the issue of social housing and social housing provision through other supports was brought under the aegis of a single Department. In the context of accommodation standards, I welcome the Minister of State's commitment to examining the feasibility of introducing a certification system. I have long believed that this is the best way to ensure that we have appropriate standards in the rented sector.

On the issue of homelessness, the ring-fencing of a supply of accommodation for people coming out of homeless services is an important development. I have been involved in the area of homelessness for many years and one of the major problems for people coming out of homelessness has been their inability to access to social housing supports. That is the way to end long-term homelessness. I must say that I do not agree with Father McVerry recent comments, although I fully respect him as a colleague. I believe that the housing-first approach and the measures this Government has put in place to ensure that a housing-led approach is on the agenda is the way to deal with homelessness. The commitment that half of all social housing allocations in the Dublin region and in Cork will go to those in homeless services is the way that long-term homelessness will be resolved but it has taken many years to come to that position.

I am taking the Minister of State's comments on rising rents in a positive way because he said that the Government is prepared to examine "all measures" to deal with the problem, including examining the issue of rent certainty. It is very important to distinguish between rent control and rent certainty. Rent control is categorically unconstitutional and was deemed to be so in 1981. I am not referring to rent control but to a modern-day version of that which is prevalent in almost every developed country with a significant private rental sector and which is about limiting the extent of increases in rents to a reasonable level. Nobody is suggesting that landlords are not entitled to a reasonable return on their investment but having looked at the Irish housing market over many years it is clear that we have engaged in boom and bust cycles that are no good for anybody. Regulating the level of rent increases and decreases will help to stabilise the overall housing market. I conducted research in 2003 into the idea of investment by institutions in the rented market, the conclusion of which was that they wanted to see better regulation and wanted to have some security in the context of rental yield. I believe that regulating rent increases is the way to go in that regard. Recently someone who was involved in the Commission on the Rented Sector asked me why the legislation at the time regulated rent increases only for a period of one year. The reason was that at the time the standard in the market was a one-year lease; had the standard been two- or three-year leases, we would have had two- or three-year rent certainty models. There is no reason we cannot revisit this.

I thank all of my colleagues who contributed to this debate. I have taken very extensive notes and if I had the time, I would respond to many of the issues raised. I will make a number of comments on the counter-motions that were tabled this evening. While I understand the spirit in which they were put forward, we are moving towards a new system of social housing provision whereby we are not looking at a quantum of €2.2 billion but at a sum that will lever further investment. I sit on the Dublin City Council Housing Strategic Policy Committee, SPC and am aware that the council has sought expressions of interest from the market for a housing scheme under which the council would provide land for housing. It is seeking partners to augment its investment and that is the way forward. In fact, that is what is happening at a European level at the moment with the Juncker plan. I want to see a new model of social housing provision because the old model does not work. As has already been alluded to by Senator Barrett, it does not pay for itself and is not the way forward. We gave houses away in the 1980s because they cost more to manage and maintain than they did to deliver.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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The Senator is way over time.

Photo of Aideen HaydenAideen Hayden (Labour)
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I accept the point brought forward in the counter motion and the Minister of State has dealt with it to some extent. Regarding Senator Craughwell's amendment, he knows my commitment to rent regulation. I have to accept the Minister of State's commitment to examine every measure and I am committed to making sure that he does so.

Amendment No. 1 to amendment No. 1 agreed to.

Question put: "That amendment No. 1, as amended, be agreed to."

The Seanad divided: Tá, 10; Níl, 23.


Tellers: Tá, Senators Paschal Mooney and Brian Ó Domhnaill; Níl, Senators Paul Coghlan and Aideen Hayden.

Question declared lost.

Question, "That the motion be agreed to", put and declared carried.

4:20 pm

Photo of Paddy BurkePaddy Burke (Fine Gael)
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When is it proposed to sit again?

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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At 10.30 a.m. tomorrow.

The Seanad adjourned at 7.40 p.m. until 10.30 a.m. on Thursday, 12 February 2015.