Seanad debates
Wednesday, 12 October 2016
Rent Certainty (No. 2) Bill 2016: Second Stage
10:30 am
Trevor Ó Clochartaigh (Sinn Fein)
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I move: "That the Bill be now read a Second Time."
Cuirim céad fáilte roimh an Aire. Tuigim go bhfuil cúrsaí gnóthach go maith na laethanta seo agus aimsir an bhuiséid agus mar sin de orainn.
In the time since this Bill was first before the Dáil, we have had a report from the Simon Community confirming that the problems in the private rented sector continue. The PRTB, Private Residential Tenancies Board, now has a total of 323,271 tenancies registered, representing 172,121 landlords and 704,332 occupants. We are introducing this Bill to help Fianna Fáil fulfil a promise made in its manifesto to introduce rent controls. Under the heading, strengthening tenant rights and implementing rent certainty measures, its An Ireland for All manifesto stated:
Spiralling rent prices are driving families out of their homes, pricing young workers out of cities and alienating potential future investment in the city. We need to introduce measures to cool down the market and curb excessive rent rises. Tenants need enhanced security to ensure stability in their home. We will implement current rent certainty measures.
As Fianna Fáil included that in its policy which it brought to the people, hopefully, it will support this Bill today.
If it does not support the Bill, then the public is entitled to ask when it will be in a position to support it. Mar sin, iarraim ar Sheanadóirí Fhianna Fáil a bheith linn inniu agus tacú a thabhairt don mBille. Rent certainty should have been in yesterday’s Budget Statement. Every week this Bill is held up, it costs families €1,000 extra a year. Any support of the amendment, which is a kick-to-touch device, will end up costing families substantially. Those Members who vote against the Bill will have to explain their actions - more precisely their lack of actions - to the people.
This Bill seeks to link rent increases to the consumer price index. In simple terms, this means rents should not increase more than the cost of living rises. There is criticism from some quarters that the consumer price index is not the best indicator with which to measure rent increases. They quote from the Central Statistics Office that it is not a suitable measure of the rise in the cost of living. If any Seanadóirí hold this view, I ask them to support the substantive aim of the Bill, allow it to pass to Committee Stage and then propose any amendments and suggest other more suitable indices.
This is not a panacea for the overall housing problem. Our private rental sector is deeply flawed and will require much legislation to fix, as well as action by all stakeholders to reform it into a sustainable model. Supply will remain a constant problem as there is a lack of units being built, a large number of tenants in private rental accommodation who should be elsewhere, and a significant number of vacant units. For example, in Dublin there are over 40,000 vacant units. These are not social housing units but private properties which have fallen into disrepair with the owner unable to carry out work on the property or sitting tight, refusing to do anything with it. This situation is not ideal but in a housing crisis, it is lunacy to allow this to continue.
Sinn Féin welcomes the initial steps announced yesterday to begin a scheme to provide rent payments upfront to renovate these vacant properties for rental. Rent certainty provides certainty for landlord and tenant alike. We are now experiencing a continued rise in rents across the State. Rents were up 3.9% in the last quarter, the largest three-month rise since 2007. In 2007, there was a massive decline in rents which would also be avoided with the passage of this legislation. Many of the arguments against rent certainty claim the crisis has not reached such a level that legislation is required. The question is, when will it be a crisis for Fianna Fáil and Fine Gael?
A recent report by the Simon Community called for exactly what is contained in this Bill to be implemented. It highlighted how inadequate housing assistance payment, HAP, and rent supplement are when there is a lack of available houses to rent under these schemes. When available properties were surveyed in Galway city by this report, there was an average of 12 available, a decrease of 21 properties, since the last survey was carried out in May 2016. Out of these 12 properties, none was within the HAP-rent supplement limits for a single person or a couple. There was one such property available in May.
In the time since this Bill was voted down in the Dáil, the situation has become worse. It is not a problem which will be solved with the passage of time. Accordingly, I do not want to hear any excuses from Fianna Fáil claiming it is too early for such legislation or we should wait for endless reports, consultations and studies before moving on the issue. Back in February 2016, the Fianna Fáil Seanad leader, Senator Catherine Ardagh, then a councillor, raised this specific issue when she pointed out the then Minister, Deputy Alan Kelly, took 10,000 homes out of the private housing market in 2015 alone. Her statement continued:
To put this into perspective, there were fewer than 10,000 new homes constructed ... The only new homes made available to the market under the Minister’s strategy are the paltry 28 new social houses.
She then decried the issues in the private rental market, saying something needed to be done.
The Government with its Fianna Fáil partners are the experts at kicking to touch. Water charges were kicked to touch with bin charges suspended for a period. Legislation for banded hours contracts can be supported in nine months’ time. All of this has nothing to do with waiting for the optimal time for these to have effect. The average rent for a one-bedroom property was 42% more than the rental accommodation scheme-HAP limits for a single person. Sometimes these figures can hide the reality, which is that a single person would need almost one and half times the payments available to him or her to pay rent for one month. This is a stark sign that the current system is not sustainable.
One factor which exacerbates this problem is that many of the private rental properties in Galway and other areas with third level institutions are being rented to students. This is due to the lack of adequate student accommodation. In many cases the private rental sector is completely unsuitable for students and places pressure on parents. Many parents have had to take out loans or even use credit cards to provide third level accommodation for their children. The building of social housing is necessary, not only in terms of investment in our future, but in playing a direct role in easing the crisis in the private rental sector.Social housing tenants are in private rental properties and this is one of the causes of the market being flooded. If there was adequate social housing, just as if there was adequate student housing, it would free up thousands of private rental properties.
Yesterday's budgetary housing measures were nothing more than a sop to the construction industry. Since the first-time buyer scheme was mooted several months ago, house prices across the State have risen by 2.9%. It is not difficult to discern a pattern whereby developers simply factor in the cost of any scheme into the overall cost.
Our Bill is common sense. It is common sense to provide certainty to all parties in the market. Where the Government failed to use the budget to positively impact the thousands of households who rent from month to month, uncertain of their future, Sinn Féin has put forward a positive proposal. I am constantly hearing the question from our opposition and from colleagues in Fianna Fáil about where our positive proposals are. Here is a positive proposal that we are asking the House to support.
The Committee on Housing and Homelessness as well as many other charities and NGOs have called for precisely this measure on many occasions. Accepting this Bill would let them know that they are finally being listened to. Nuair a tháinig foireann Shinn Féin le chéile ag tús an téarma Oireachtais seo, bhí muid uilig ar aon intinn go gcaithfí dul i ngleic le géarchéim na tithíochta ar bhonn uilepháirtí. Cosúil le mórán daoine eile, labhair mé leis na mílte duine le linn an fheachtais olltoghchánaíochta agus ba léir dom go raibh an fhadhb seo fós ag dul in olcas. Ardú meanma a bhí ann chuile dhuine ó na páirtithe uilig a fheiceáil ag obair as lámh a chéile chun teacht ar chomhréitigh ar an gcomhchoiste tithíochta. Ach ní leor an comhoibriú féin. Caithfear beart a dhéanamh de réir briathar agus tacú le reachtaíocht a thabharfas éifeacht don dea-thoil a tháinig amach as béalta Fhianna Fáil gan stad roimh an toghchán. Tá dul chun cinn ag teastáil ó na daoine atá i gceist leis an mBille seo. Mar sin, iarraim ar Sheanadóirí gan bheith mar iománaithe ar an gclaí. Iarraim orthu a bheith linn ar an bpáirc ag tabhairt aghaidh ar an bhfadhb.
Let us consider the issues on a more local basis. Organisations throughout the country are doing great work to support people who are in difficult situations of homelessness. Many of them cite issues in the private rental sector as having an impact on other issues. It is stark to read the annual report of COPE Galway, an organisation that does fantastic work to help people. The annual report from 2015 states that the organisation worked with 659 households, and that 369 children were affected by homelessness in Galway. The figures include 166 families, 493 single people and seven couples. Those involved tell us the most significant issue is a lack of housing. The impacts of this on the COPE Galway domestic violence services are severe. In 2015 the organisation worked with 380 women and their 180 children who were experiencing domestic violence. COPE Galway provided 780 outreach appointments, 205 court accompaniments and answered 1,100 crisis calls. However, the organisation was unable to accommodate 288 women and 405 children who requested refuge due to a lack of space. This I believe this part of the knock-on effect of the issues in the private rental sector. COPE Galway also does wonderful work with older people and provides older people's services.
There is a section in the COPE Galway annual report relating to the increasing incidence of family homelessness. There may have been a belief up to some years ago that homelessness only affected people who were down and out. COPE Galway tells us that a total of 56 families, comprising 36 lone-parent families as well as 20 non-lone-parent families, including 133 children, were provided with emergency accommodation in 2015. This represented a 107% increase on the previous year, when 27 families, all lone-parent families, including 55 children, were provided with emergency accommodation. COPE Galway has said that the loss of private rented housing was the reason these families became homeless, with most experiencing homelessness for the first time. Many first came into contact with COPE Galway homeless services at the point they had been issued with a notice to quit by their landlord. The planned sale of the property was most often the stated reason. Anecdotally, we know that the notice-to-quit methodology being used by many landlords is actually simply a mechanism to increase rents. That is another reason I am putting forward the case that we need to introduce rent certainty.
I am disappointed that the Government has put forward an amendment. I call on the Government Members to retract the amendment at this stage. I appeal to colleagues across the House to do the right thing on rent certainty. It is actually the right thing for the landlords and tenants. It gives far more certainty. It is a simple act. I hope Members will support the Sinn Féin Bill. Tá súil agam go dtacóidh Fianna Fáil ach go háirithe linn mar tá polasaí Fhianna Fáil chomh maith leis an polasaí seo againne. Taispeánfaidh muid go bhfuil cumhacht ag an Seanad difríocht a dhéanamh.
Paul Gavan (Sinn Fein)
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My colleague, Senator Trevor Ó Clochartaigh, has gone into the detail of the Bill and the reasons for it. I am keen to discuss it in terms of the context of the politics we have. I was struck by a phrase in the Dáil yesterday echoed by both Fianna Fáil and Fine Gael Deputies. The phrase was that the centre must hold. This has been the subject of considerable comment through the course of the past 24 hours. It got me thinking. What do we mean when we talk about the centre? What do we mean by the centre of politics? I take it to mean reasonable moderate inclusive politics. It strikes me that there was little of any of that in yesterday's budget. The budget has been described by Peter McVerry as a landlord's charter. I imagine everyone in the Chamber would respect the views of a man such as Fr. Peter McVerry. When it comes to housing and homelessness he is recognised as an expert.
There is something rather strange about this State. Let us consider how rents and housing are organised throughout most of mainstream western Europe. We find that having rules for rents is the norm, as is having rules around rent certainty. Having rental properties that are not subject to the extremes of boom and bust is the norm. The reason for this is because it is a regulated sector in these countries. The political consensus in the centre has it that this is something we do to protect people. It is strange that this consensus of the centre has never existed in this State. It is strange that parties which claim to be of the centre have always, regrettably, taken the side of the landlords in this State. It is a poor reflection on parties that claim to be of the centre. Whenever anything is challenged in terms of the status of landowners, they always fall by the wayside and allow the status quoto continue. Why should we not have rent certainty? Why are the people of this country not entitled to rent certainty? Fianna Fáil and Fine Gael claim to be parties of the centre, but when it comes to crunch issues like challenging the status quoin respect of property, they constantly disappear or sneak away. Why is that?
Having read the Government amendment to today's Bill, there are no surprises for me. Basically, those on the Government side are suggesting that we kick the can down the road and not deal with this today, but that we might look at it again in a few months' time. That seems to be the over-riding mantra of this Government in respect of any issue of substance. The view is that we should not deal with it today or take a decision that would be in the interests of all the people, because that might hurt some of the people they like to protect. It is no coincidence that the people who produced the budget yesterday with absolutely no measures to redistribute wealth from those who have it to those who have not are the same people who are going to sit in the Chamber today and essentially make the case that it is a nice idea and they like it - in fact, in the case of Fianna Fáil it is in the party manifesto - but they have no wish to deal with it now. I appeal in particular to our colleagues in Fianna Fáil.I recognise that some good points have been made in relation to housing, particularly by Senator Murnane O'Connor in recent months. I appeal to Fianna Fáil to take a second look at this Bill and think of the people in their own areas, those who have had rent hikes of €300 and €400 a time, those who are crying out for some kind of decent regulation and find that Government after Government has turned a blind eye to it. I ask them to think about it. To be clear, if they do not support this moderate reasonable Bill today, the message will go out that Fianna Fáil has once again rejected rent certainty and I would have to believe that at least some Members on the Fianna Fáil side cannot be comfortable with that notion. We had a wonderful moment last week in the Dáil where we got behind a Bill that had all the right sentiments regarding the Comprehensive Economic and Trade Agreement, CETA. In fairness, we saw the Fianna Fáil Party listen on that occasion, it abstained and we managed to send a strong message in relation to CETA. I am asking our colleagues in Fianna Fáil to look again today in relation to rent certainty. It is an issue that affects hundreds of thousands of people in our State. We know, because the facts are out there, that rent hikes have been absolutely outrageous.
It is not only a Dublin issue. We know that rents in Dublin are astronomical, but where I live, in Limerick, colleagues of mine are facing rent hikes of €300 and €400 when their review comes up. The bottom line is this. We can either do something about it - this is what this Bill is designed to do - or we can blow hot air and say, "If only", or "We agree with you but", and effectively do nothing. I would ask a simple question. Is that the best that our people deserve? Is that the best that this Chamber can do? Last week we showed that we can do better than that. This week, I believe, with genuine goodwill on all sides, we should be able to do better than that. If they cannot do better than that, then the message will go out loud and clear that Fianna Fáil has backed the Government in refusing rent certainty. On the back of a day yesterday when, unfortunately, Fianna Fáil was at one with Fine Gael, it will do Fianna Fáil no good to find itself in the same corner again.
As I say, I am aware there are genuine concerns on the Fianna Fáil benches in relation to this issue. They should have the courage to stand up and do what is right, not for us - I would not expect that - but for those in rented accommodation. We can talk about it, we can ramble on about it or we can take this opportunity here in this Chamber to do something. We can make the Seanad relevant again, as it was last week. We have choices, let us make the right decisions.
Diarmuid Wilson (Fianna Fail)
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I thank Senator Gavan. Before I call Senator Coffey, I welcome the Minister, Deputy Coveney, to the House as I neglected to do so at the beginning.
Paudie Coffey (Fine Gael)
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I move amendment No. 1:
To delete all words after "That" and substitute the following:"Seanad Éireann, while recognising the pressures that tenants are under following rent increases and the need for a comprehensive response to these pressures, does not accept the Rent Certainty (No. 2) Bill 2016 for the following reasons:(a) Passage of the Rent Certainty (No. 2) Bill 2016 would be premature as:
- it pre-empts the relevant commitments in the Programme for Government and in the Rebuilding Ireland Action Plan for Housing and Homelessness, particularly in relation to the publication of a strategy for the rental sector by end 2016;
- the measure risks negatively impacting on existing and future supply of rental accommodation;
- the Bill has potential legal and constitutional implications which require careful consideration; and
(b) While the Government considers that there is some merit in the Bill in the context of the broader debate on the rental market it is premature to facilitate the passage of Second Stage at this time, pending the completion of a strategy for the rental sector by end 2016, in which the Government will be considering measures to provide greater predictability regarding rental trends for landlords and tenants.".
First, I acknowledge the thrust of the Bill. I recognise it is an effort to improve the circumstances around the entire rental sector in this country in terms of sustaining tenancies. However, if we analyse it and break it down in terms of what it would mean if it was implemented in the morning, we must look at the possible consequences of enacting such legislation.
We all are agreed there is no silver bullet to resolve what is a housing crisis in this country at present. It is a crisis for many reasons but, essentially, it is about the lack of supply. The fundamental underlying reason is we do not have enough houses to meet the current demand. That is as a result of a legacy of, as some Senators have said, a boom-bust cycle but it also means that we currently have a dysfunctional property and construction sector and we have a dysfunctional rental sector. Until we address those underlying issues of supply, unfortunately, we will not see the full resolution that we all aspire to.
The Minister for Housing, Planning, Community and Local Governmenthas already displayed that this is the highest priority for Government in terms of providing adequate housing to meet our citizens' needs. That is displayed, not only in words but in terms of funding, in terms of policy interventions, in terms of legislation and many more interventions the Minister will outline later. It all goes back to supply, and that has to be addressed if the challenges of this country are to be met in regards to increasing supply for private purchases, increasing supply for local authorities, and, indeed, the approved housing bodies in the voluntary sector, and increasing supply for the rental sector. The recent Government action plan for housing and homelessness is a proactive tangible response to meet all of those needs that are outlined under five pillars - addressing homelessness, accelerating social housing, building more homes, improving the rental sector and utilising existing housing stock. I believe if behoves all of us because it has become such a crisis of proportion that it is beyond politics in my eyes. I believe the Minister and the Government should be supported in trying to implement this Rebuilding Ireland plan.
We will need not only the policy makers to support the plan. We are depending also on the local authorities, including members and officials. We are depending on the voluntary sector and the approved housing bodies to help us achieve the challenging objectives and targets that have been set. We are also depending on the construction sector that, I suppose, has been the sector hit most in the economic recession over the past number of years. Everybody can see the legacy that happened in the construction sector.
By extension, the rental sector is also affected because the supply numbers are simply not there for a normal functioning rental market. That is why Government has proposed an amendment to the Sinn Féin Second Stage motion on the Rent Certainty (No. 2) Bill 2016. We believe the Bill is premature for the reasons outlined but we also firmly believe that we need to be careful with regard to policy interventions that could provide disincentives to landlords or drive more of them out of the market at this critical time.
The proposal is to link the rent to the consumer price index, CPI. There is a significant risk - that has been stood up by independent reports - that CPI-linked rents would, in fact, discourage new investors from entering the market and that is something we simply cannot afford at present. Recent statistics show that new registrations of tenancies in 2013 stood at 114,000 and in 2015 there has been a dip to 105,000 registrations. That clearly shows that there is a supply challenge in the entire rental sector and to make policy interventions such as proposed without thinking through their consequences could have a severe impact. The proposal might be well meaning but it could, in fact, have a negative impact in terms of the availability of properties for rent if it is not sustainable. I do not hold a candle to landlords and if one looks at the Residential Tenancies (Amendment) Act 2015, one will see a number of interventions were made that the landlord sector opposed and were not happy with. Those were positive interventions to try to sustain tenancies in this critical period until we get the construction sector back to a functioning normal mode and until we increase the supply of housing.
While it is well meaning, we need to be careful and cautious as regards this Bill. If the Bill had even some type of sunset clause over a period of two or three years, it might have allayed some fears, but the figures show that landlords, many of whom are accidental landlords, are getting out of the market and properties are being sold, which means they are not available for rental any longer. That is a problem that we need to be acutely aware of in any interventions we make.
Going back to the Residential Tenancies (Amendment) Act 2015, it is fair to say that Government made interventions at that time that were to try to sustain tenancies in rental accommodation, such as to increase the minimum period between rent reviews from 12 months to 24 months. That is to operate for a period of four years - this critical period until we get the construction sector repaired and the supply side up. Another measure was the minimum period of notice for a new rent increased from 28 days to 90 days, and that was to help in terms of sustainability. Landlords, as the House will be aware, are precluded from increasing rent above the market rate. If there is evidence where landlords are increasing above and beyond that, then tenants have recourse to appeal to the Private Residential Tenancies Board, PRTB, which will adjudicate on such matters and rents will remain at the current level until that adjudication happens.It is important to note that there are many supports available. It is recognised that there are still challenges but this is why, across parties, we need to support the Minister and the Government in terms of driving delivery of housing units across all sectors. The Government is committing over €5.3 billion to deliver over 47,000 units by 2021. This is ambitious and challenging but it is not something we cannot achieve if we align all of our forces at local, regional and national level in terms of policy-makers and the construction and rental sectors. As stated earlier, we have a lot of accidental landlords who, due to legacies of times past, are under huge debt pressures and must sustain their properties and recoup a sustainable income in terms of rent. If we are going to limit that, we could drive them out of the sector.
I know the Government and the Minister want to see more long-term lettings and more long-term sustainability with regard to rents. The budget measures will certainly help. I know sometimes they do not go as far as many would like but the help-to-buy scheme for first-time buyers will assist in increasing levels of supply because it is an incentive for such buyers to purchase new units rather than existing ones. There is also tax relief for landlords to try to keep them in the market so that they will not exit in circumstances where there are fewer properties available to rent. The increase in the rent-a-room income ceiling to €14,000 is another measure that can certainly help alleviate some of the pressures. In many of the pressure areas in Dublin, Cork, Limerick, Galway and other places, people have spare capacity in their houses and this might incentivise them to let surplus rooms to people in need or students who require accommodation. The HAP scheme, in respect of which €105 million is being allocated, has proven successful in areas where it is up and running. I know there were issues around ceilings and the scheme not being available in all local authority areas but much progress has been made with it. I can say without contradiction that we would be in a far worse situation in terms of the housing crisis were it not for the HAP scheme, which has met the needs of many thousands of people throughout the country.
I wish the Minister well with the Rebuilding Ireland programme. I fully support it and believe it is a tangible strategy that sets out a vision with funding behind it. If we can get behind the programme and address the issues on the supply side, we will, in turn, resolve many of difficulties relating to the rental sector.
Jennifer Murnane O'Connor (Fianna Fail)
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Fianna Fáil will not be supporting the Bill. The introduction of this highly-flawed legislation undermines attempts to provide real solutions to the housing crisis. As a party, we are on record in calling for stronger rent certainty measures and did so long before Sinn Féin. However, our measures were well thought out. Fianna Fáil published a policy document, Generation Rent - A new deal for Renters and Landlords, which aimed to stabilise rents immediately by restricting rents to an area-based rental index both within and between tenancies. This is similar to the model in operation in many German cities. This proposal would be for a maximum of three years pending annual reviews of the effects of the regulation of market supply.
By contrast, Sinn Féin's introduction of this half-page Bill, which attempts to make highly-flawed changes to a hugely complex area, represents political posturing of the most careless and irresponsible kind. The Bill is extremely defective. First, if passed, there is a strong likelihood that it would lead to short-term spikes in rents as well as an increase in tenancy turnover. This is what happened for two months prior to the introduction of the former Minister's rent regulations in January 2016. Second, while watered down, the recently introduced rent certainty measures have only just taken effect and it would be highly irresponsible to introduce new regulations, which would lead to more disruption and upheaval in the market, prior to reviewing the effects of the current rent certainty measures. Third, the Sinn Féin proposal to link rent increases and decreases to a measure of inflation through the consumer price index, CPI, is flawed. A report in 2014 commissioned by the PRTB found that had market rents been linked to the CPI during the period from 2000 to 2014, rents would be far higher than they are at present.
I look forward to the publication of the report on rent certainty and affordability, which is being prepared by the Department of Housing, Planning and Local Government and which is due before Christmas, because I think it will play a crucial role with regard to rents. The measures in the Bill before the House, the main provision of which aims to link rent increases or decreases to the CPI's inflation index, are highly defective. The new rent certainty measures only commenced in January 2016. At the very least, they should be given some time to bed down. Their effect on rent levels, units and supply will be reviewed prior to the introduction of the new regulations.
While it is currently illegal for landlords to end tenants' leases mid-contract, they can end existing tenancies if they want to sell their properties or if they want family members to use them. This is a problem because a landlord can end a tenancy any time he or she wants. This issue needs to be examined.
The continued shortfall in supply and increasing demand has put significant upward pressure on rents. Rental market increases are, in the main, a result of the legacy of under-supply in recent years. It is estimated that just 9,000 housing units were completed in 2014 compared with an estimated requirement of 25,000. The number of units completed in 2011 and 2013 was even fewer. The false notion that vacant homes and ghost estates somewhere in the midlands are a substitute for vacant homes where they are actually needed still lingers. We are still not building houses - even in the midlands. All this needs to be addressed. Far from keeping rents down, freezing rents in the manner proposed could encourage landlords to raise rents up sharply at the beginning and the end of tenancies, which would create a problem. Restricting prices to below market levels will only make supply even scarcer.
Fianna Fáil's proposal will encourage long-term leasing to give tenants greater security in their occupancies and allow families to consider renting as a long-term option. These changes will also alter the balance of power in favour of tenants, who would still be able to terminate their contracts after their probationary period with one month's notice. It is crucial that this is addressed. This proposal would be far more effective in stabilising rents than the measure proposed by Sinn Féin and would inflict less damage on the rental market.
The private rental sector faces a crisis in terms of supply and security. This has driven up costs and undermined the sector. Action is urgently required. Combining it with boosting supply is key. We will introduce a series of measures to provide security for renters. We also propose to introduce a family tenant lease to facilitate long-term renting above the current four-year cycle, to improve the quality of accommodation by means of a new certification scheme - to be operated by local authorities and approved by the PRTB - in order to improve tenants' rights and to review the current rent certainty scheme in the coming years
I will not support the Bill before the House. As the Minister is aware, I am a member of the Joint Committee on Housing, Planning and Local Government. I know he has a plan to build 47,000 houses. It is crucial that this plan be implemented as soon as possible so that those on local authority housing lists can be housed and others can qualify for inclusion on the housing list. The cap is a massive issue for me. In my local authority area, the cap is €27,500. My biggest problem is that most people do not qualify for the local authority housing list, which is causing another form of homelessness. Renting is crucial. The HAP scheme needs to be addressed. We must also ensure that rents units in the midlands or elsewhere assist people who do not qualify for the local authority housing list because, as the Minister is aware, the new HAP scheme only applies to people on the housing list. There are other people who fall through the cracks because they do not qualify for inclusion on the housing list but they need rent allowance. I ask the Minister to ensure this is also kept in place.
Michael McDowell (Independent)
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I want to say a few things about the principle behind this Bill. I think it is mistaken, although well-intentioned. I do not want to engage in using over-the-top language about it but it suffers from a number of flaws.One has to consider the dynamics of a society and the provision of housing in this country. Would the introduction of this Bill bring us to a stage where more money was available to create a viable thriving and competitive rental sector or would this Bill drive away investment in rented accommodation? The answer is fairly obvious. The long-term effect, even the medium-term and, for reasons that have been mentioned in speeches just now, the short-term effects would be counterproductive. This Bill would not achieve what Sinn Féin hopes for in proposing it. It would in fact drive money out of the provision of rental accommodation, make people unwilling to enter into that market and tend to drive rents up if people had an opportunity to increase them. This would be because they would know that if this was the law for the long term, they would have to provide for future changes in housing market prices to cushion themselves against being landlords of properties which were let at an amount far below the market rate for rents in the area. This is a misguided Bill.
We forget that whenever one comes into a malfunctioning market such as exists now and which is exploiting tenants and one decides to operate with a legislative scalpel on that market, a few hard questions have to be asked. Two or three years ago a friend was thinking of buying property in Dublin and thought I was a good person to look at houses with him from an architectural point of view and to judge their soundness as someone who was interested in it. I went to quite a few properties in relatively well-to-do parts of Rathmines, Ranelagh and all those kind of places, which seemed at that stage to be going for attractive prices. As I walked around, I realised going from one room to another these were bedsits which had been cleared out. I could see the traces of the cookers and whatever else, and the fairly downmarket adaptations of these rooms for bedsit letting. I became more and more depressed at the thought that somebody in Dublin City Council, I think, had decided that bedsit accommodation was to be outlawed and made it unlawful to continue to rent out accommodation in which kitchen or bathroom accommodation was shared or where the apartment was not fully self-contained. I do not know how many separate dwellings were ruled to be illegal in this city but I think it was of the order of 10,000. These were, generally speaking, for people who were not well to do, often single, many of them elderly and this was the best they could afford.
Did whoever it was on the quays who decided at the stroke of a pen to improve housing standards in the city of Dublin think for one minute about the social and market consequences of scrapping that accommodation without working out whether there was a functioning rental market to which the people who were going to be evicted could have resort? It struck me that they did not, although it was well intentioned. Everybody would like to have a top quality rented sector available, but this person did not ask what would happen to the woman or man in her or his 50s who had been in this place for 15, 20 or 30 years when the new law came into effect. Does Sinn Féin really believe this will increase the provision of decent rental accommodation or drive people out of that market? I believe this Bill would have that effect.
One of the consequences of the decision on bedsits is that people now share houses, including the bathroom. They do not have a separate letting of each room, except by internal arrangements among themselves. They may not even have fully functional Yale locks on their doors, but their position is similar in many respects to the bedsit arrangement that was declared unlawful. It is the same thing by another name. The consequence was that between 8,000 and 12,000 people were put out of their homes because somebody thought to improve the quality of rental accommodation in Dublin at the stroke of a bureaucratic pen. I should declare an interest here because I have let a property in the past.
This Bill is well intentioned. It is designed to stop people being ripped off in a rising market where there is low supply, but it will not in the long term increase the supply. It is contradictory to its aim to bring fairness to people who are vulnerable and need to be protected.
We need to accelerate the investment in providing rental accommodation and to take steps which even the Minister’s strategy may not have thought of. I think sometimes that Dublin City Council should operate on a "use it or lose it" basis in respect of land in the city which has a high value but is being left derelict for this or that reason and do what the Wide Streets Commissioners did 200 years ago, which is to acquire it and give it to somebody on a building lease and say rental accommodation should be built now. We need dynamism in the provision of rental accommodation. Every day coming in here I pass Charlemont Street, where Dublin City Council is rebuilding the Tom Kelly flats complex. It was sad to see that a large portion of the site was lying empty for approximately two years while Dublin City Council, which owned the property, got its act together. Local authorities are not the most dynamic. They are slow at turning projects around. There should be methods to encourage other people into developing available space. There is nothing unconstitutional about having a use it or lose it provision for unused property which has the potential for residential use and give people whatever value the site has. It should be handed over to somebody who will provide rental accommodation. I hope the Sinn Féin Members do not think I am being unduly negative but I believe this is a recipe for worsening the situation rather than improving it.
Colette Kelleher (Independent)
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I am delighted to support this Bill. I believe the proposal to link any increase or decrease in rent, arising from a rent review, to the consumer price index as set by the Central Statistics Office to be a modest and sensible proposal that will go some way to providing stability in a very volatile and often broken housing market.
This call for full rent certainty is supported by a range of civil society groups, including the Simon Communities of Ireland. Having worked for the Simon Community in Cork for many years I saw at first hand every day the devastating impact of homelessness on people and their lives. There is no doubt that rising rents are driving people into homelessness. Given the scale of the national housing and homelessness crisis, we all need to move beyond partisan politics and work collectively in the national interest to solve this crisis.The Government and the Minister's commendable and ambitious "Rebuilding Ireland - Action Plan for Housing and Homelessness", commits to creating a sustainable, secure and affordable rental sector. Under the heading of security, the action plan commits to bringing greater certainty to tenants and landlords. There is consensus on this certainty across the floor. The Bill provides for this desired certainty and would go some way to help make the Government commitment a reality.
Working together, the Opposition parties, Government and Independents can solve these issues. Homelessness is not inevitable. We do not need to wait. We can act today by passing the Bill. Fixing the rental sector is at the core of this response, and this was reinforced in yesterday's budget. Today, therefore, it is all the more important that we urgently take measures to make the market operate as well as possible. People have suffered, and continue to suffer, the impact of the under-regulated rental market. Although there are Members of this House and the other who fear and loathe market regulation, when the market is as dysfunctional and broken as our is, it requires these modest interventions.
Colette Kelleher (Independent)
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Just as one sets rules for young children about the number of sweets they can eat on a Sunday, unstable markets require regulations to operate properly. This includes regulations on quality and standards in people's homes, which the previous Senator mentioned. Standards and expectations rightly rise. For the first year of my life, I lived in a house with an outside toilet. Nobody would think it was a reasonable expectation in this day and age. We moved a few doors down and had an inside bathroom. The previous Senator talked about the regulation and improvement in the quality of bed-sits. It is only right and proper that these bed-sits, which people call their homes, come up to the standards we now recognise as normal.
Colette Kelleher (Independent)
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The rent stability measures introduced in 2015 have not had the desired effect of slowing down the market and off-setting rising rents. The Simon Communities' report "Locked Out Of The Market V: The Gap between Rent Supplement/HAP Limits and Market Rents", published last week, showed that in the year to the second quarter of 2016, rents increased by 18.2% in Cork city; 10% in Dublin city centre; 14.6% in Louth; 13.9% in Galway city; 12.5% in County Kildare; 7.5% in County Leitrim; 15.5% in Limerick city; 12% in Laois; and 3.8% in Sligo. From this, we can conclude that rising rents are a problem for people nationwide, and it needs the national response which the Bill encompasses. The housing rental market needs new rules. The proposal in the Bill is not new or revolutionary. It is a form of rent regulation used in countries such as Sweden, Denmark, Germany and France, and we should use it in Ireland too. For the thousands of children, families and single people experiencing homelessness in Ireland tonight, I support the Bill.
Maire Devine
Denis Landy (Labour)
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I welcome the Minister and thank him for coming here to discuss the Bill. The Labour Party will support the Bill, although it is very limited in its scope. We recently published our own Bill, the Social and Affordable Housing Bill 2016, which goes far beyond what is in the Bill we are discussing. However, the provisions of the Bill are encompassed in our Bill, and we will support it.
Our Bill, published by Deputy Willie Penrose, seeks to amend the Residential Tenancies Act 2004. It provides a proper definition of "landlord" and prohibits landlords from refusing to allow tenants to stay beyond the sale period of a house. It also provides that the Private Residential Tenancies Board, PRTB, would be the agency that provides rental guidelines based on the consumer price index, CPI, and geographical guidelines across the country. It also provides that rents would be reviewed on a 12-monthly basis and that rent issues would be dealt with by the PRTB. It would prevent vacant tenancy as a result of the sale of a house which, as mentioned by Senator Kelleher, is commonplace across Europe. We are one of the few European countries in which the mention of a sale by a landlord can result in a vacant tenancy.
Our Bill also seeks to change the role and scope of NAMA and change its name, on a transition day, to the national housing development and finance agency. NAMA, which has done a very good job, except on one or two matters, would have a new focus. The focus in our Bill for NAMA would be to address the shortage in supply of houses for sale and for rent and to ensure a stable and functioning accommodation market. Our Bill also proposes to change tax laws to assist landlords who cannot write off interest on money borrowed for the development and upgrade of housing against their profits. They should be allowed to do it. As previous speakers said, unless we have people prepared to invest in the market, we do not have a market and we have a narrowing of the base of houses.
Our Bill also seeks to reduce the VAT rate applied to materials from 13.5% to 9% to allow for materials for the provision, construction, renovation and alteration of houses to be assessed and charged at 9%. We also want to bring forward a vacant site levy to amend the Urban Regeneration and Housing Act 2015 to bring forward the levy to 2017. This would further encourage the use of vacant land which, as has been said, is lying idle while thousands of people wait on housing lists.
The Kenny report of 1973, which has lain on the shelves since then, is adopted in our Bill, with one or two modifications. The issue is constantly being debated as being unconstitutional. In 2004, an all-party Oireachtas committee examined the Kenny report and deemed it constitutionally sound. The vacant land across the country would be compulsorily purchased at 125% of its market value. Vendors would receive 25% on top of the market value. This would free much of the land and would put a fire under those who are sitting on land across the country to sell it. While the Bill may have difficulties, they are not insurmountable. It needs the will of all parties in the House to support it and start the process of linking rents to the CPI.
Denis Landy (Labour)
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I would like the Minister to address the regulation of Airbnb. I have raised it several times before. Approximately 10,000 housing units in Dublin have been taken out of the private rental market and are being used for Airbnb. It is an unregulated market and people can charge what they like and provide accommodation whatever way they like. This summer, due to the difficulties of getting accommodation in the city, I had the misfortune of using Airbnb several times. Some of the accommodation was not very pleasant. It did not do what it said on the pack. One is trying to get accommodation at the 11th hour in the city, and sometimes one ends up in a place one would not put a dog in. To say that implementing the Bill would affect the market is an excuse for doing nothing, and I do not accept excuses for doing nothing.
Simon Coveney (Cork South Central, Fine Gael)
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I thank Sinn Féin for bringing forward this Bill and providing us with another opportunity to discuss what I believe everyone who has contributed to this debate would accept must be an absolute priority for the Government and all parties in the Oireachtas.
As Senators will be aware, the Government has tabled a proposed amendment to the motion, as I did in the Dáil when this issue was brought forward by Sinn Féin. There are acute pressures in the rental market. These pressures are driven by a number of factors, including rising demand, a lack of supply and high costs that indebted landlords face in servicing loans.
Denis Landy (Labour)
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On a point of order, can we get a copy of the Minister's script? I know it is not compulsory but I am asking because I find it difficult, due to my hearing problem, to pick up what the Minister is saying and it would be helpful if I could read the script.
Diarmuid Wilson (Fianna Fail)
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As Senator Landy is aware, the Minister is not required to circulate his script. We will let the Minister continue and I will arrange for that to be done as quickly as possible.
Denis Landy (Labour)
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I thought we could have it while he is delivering his speech. Is that not possible?
Diarmuid Wilson (Fianna Fail)
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It is not compulsory.
Simon Coveney (Cork South Central, Fine Gael)
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I have a copy. The Senator can have it. I might go off-script at times; I have a reputation for doing that.
As I said, there are acute pressures in the rental market and I outlined some of those. Those stresses are borne out by the latest data from the Private Residential Tenancies Board, PRTB. The PRTB index for the second quarter of this year shows that private rents rose by almost 10% across the country compared with the same period last year. In Dublin, rents are now 3.9% higher than their previous peak in 2007. Rents are also increasing outside Dublin, although they remain at about 11.2% off their peak levels. Those numbers are broadly in line with the trends reported in the recent daft.iereport for the same period. There is no question that the increases are placing huge pressures on tenants, particularly those who are seeking to access new accommodation and, in particular, on many people who are simply being priced out of the market, as has been pointed out, or put at serious risk of homelessness.
The core issue behind almost all of the pressures throughout the housing market is lack of supply. For the rental sector, the best way to reduce and stabilise rents in the long term, and benefit the entire sector, is to increase supply and accelerate delivery of housing for the private and social rented sectors.
Rebuilding Ireland - an Action Plan for Housing and Homelessness aims to increase and accelerate housing delivery across all tenures to help individuals and families meet their housing needs. It sets out over 80 actions the Government is taking through new policy, new legislation and innovative measures in the budget to achieve that aim.
A strong and viable private rental sector can play an important role in the housing market and our wider economy. It can provide a housing option to those who either cannot or choose not to enter the owner-occupied market but still have sufficient means to meet their own accommodation needs. It can provide a housing option to meet rising demand and promote flexibility and better alignment to a more mobile labour market, making it easier for individuals and families to pursue job opportunities or adapt their accommodation to changing family circumstances.
It can also reduce the macroeconomic risk of an over reliance on home ownership. We have seen examples over the past decade where states with relatively large private rented sectors, such as Germany and Switzerland, have been better insulated against housing booms than states with small rental sectors like Ireland and Spain. The rental sector in Ireland has traditionally been regarded as a residual sector in which households who would prefer either to own their own home privately or access permanent social housing must serve time in on their way to their true tenure of choice.
The rental sector in Ireland has doubled in size over the past two decades. Almost one fifth of the population now live in the rental sector. Growth in the sector has been driven by a range of factors including a reducing reliance on home ownership as a tenure of choice, as well as demographic factors including inward migration from the European Union, decreasing household size, and increasing rates of new household formation. Notwithstanding that, the rental sector here needs to develop and mature in order to provide a viable, sustainable and attractive alternative to home ownership rather than serving as a temporary refuge or a staging post on the route to home ownership.
Severe supply pressures, rising rents, security of tenure issues, limited, but nonetheless unacceptable, examples of poor accommodation standards, and a shortage of professional institutional landlords are impediments to delivering on a strong, stable and modern rental sector that offers real choice for individuals and households while contributing to economic development.
With regard to rent levels, important amendments to the Residential Tenancies Act introduced last year mean that the minimum period between rent reviews for tenancies has increased from 12 to 24 months. This will apply for a four year period until 2019. In addition, the minimum period of notice of new rent is increased from 28 days to 90 days, and longer notice periods for the termination of long-term tenancies have been introduced also. These changes are important, but clearly there is need to do more.
While I appreciate the motivation behind the Sinn Féin Bill, I strongly believe that the proposal to tie rents strictly to the consumer price index may well exacerbate the problem we are currently facing. It may force some existing supply to exit the market and discourage future supply for the sector. The experience in jurisdictions where strict and blunt controls such as that proposed have been introduced is generally not a happy one. Rent control has been shown to negatively impact on supply, make tenants even more vulnerable, and create strong black market distortions and inefficiencies that can emerge from time to time.
I see rent predictability, as part of a stable rental sector underpinned by a sustainable investment environment, being of benefit to both tenants and landlords. That is why the Rebuilding Ireland document commits to developing a real and meaningful strategy for the rental sector, with a major focus on supply but also including new mechanisms for both setting and reviewing rents. We plan to have that done by the end of the year. We will start our consultation towards the end of next week and would be interested in anything people have to say in a constructive manner.
In advance of the publication of the strategy before the bend of this year, I am advancing other legislative changes. In case people think we are not acting in this area, we are by taking some early actions to which we are already committed. They are in the Rebuilding Ireland document, and they have already gone before Cabinet in terms of legislative approval. We are advancing their early introduction in the Housing (Miscellaneous Provisions) Bill 2016, which I will shortly introduce to this House. This Bill will introduce new measures to ensure tenants remain in situwhere a landlord proposes to sell more than 20 units in a single development. It is being referred to as the Tyrrelstown amendment, and it will provide for enhanced enforcement and dispute resolution powers also for the RTB. We are saying that when one institutional investor sells a development to another, the tenancies in that development will not be affected through that sale. We need much more consideration on whether we will do something similar for much smaller developments or individual houses or apartments that may be owned by landlords that only have one or two properties. We will consider that and examine it in detail.
In terms of increasing supply, the Bill will introduce temporary fast-track planning arrangements for large-scale housing developments and streamline the existing process for local authority developments and developments by approved housing bodies, and support a very significant increase in the supply of dedicated on-campus student accommodation, freeìng up thousands of units in the wider rented sector currently occupied by students. There are approximately 25,000 students in the private rental sector, and many of them have four or five students per house. We are not saying that will free up 25,000 houses, but it will certainly free up about one third of that number. There are approximately 10,000 new student accommodation units in the pipeline, either in preparation for planning, in planning or with planning and about to start construction.
Yesterday’s budget contained more measures designed to encourage a strong supply response in the rental sector. For example, the Government has announced the restoration of 100% interest relief for residential landlords on a phased basis, 5% at a time, moving from 75% to 80% next year and continuing on to 100% over the next five years. We are also extending the Living City initiative to include rental accommodation, and we are removing the existing square footage cap.In other words, we are trying to encourage investment in derelict property, primarily in city and town centres, so people can invest in it and make it ready to be rented. That makes much sense. We are increasing the ceiling of the rent-a-room scheme from €12,000 to €14,000. In other words, we want to attract people financially to rent a room in their homes to students if it suits them to do that. By moving the level from €12,000 to €14,000 of tax-free income, there is a really strong sweetener in doing that. It will also have an impact on supply.
I am determined that the strategy will provide a vision of the role that the rental sector will play in the short, medium and long term in the context of the Government's objectives for a housing sector overall as set out in Rebuilding Ireland. It will contain a range of actions focused on the four key areas of security, supply, standards and services. In terms of security, we will look at bringing greater tenure and rent certainty to landlords and tenants, and in terms of supply we will examine how to maintain existing levels of stock while encouraging investment in additional supply, including through affordable rental. We will launch the detail of that scheme in the coming weeks. In addition, measures on standards will continue to improve the quality and management of rental accommodation, while actions on services will broaden and strengthen the role and powers of the Residential Tenancies Board to more effectively provide services and empower tenants and landlords. In other words, if there are disputes between tenants and landlords, we need earlier outcomes to solve them.
We have more to do to allow this area to evolve into a mature, stable sector in which there is a true balance between the rights and responsibilities of landlords and tenants. Supply of new rental accommodation at affordable levels is key to this balance. The strategy for the rented sector, which will be in place by the end of the year, will lay out measures to address immediate issues affecting the supply, cost and accessibility of rental accommodation.
I agree with the speakers who have said they will oppose this motion. It is well intentioned, and I do not mean that in any kind of patronising way. There is a problem for many people because of the pressures they are under arising from rent inflation. An effort to solve that using the blunt tool of simply putting in rent caps without anything else would have a very significant and potentially very negative impact on supply in the medium term. Ultimately, we need to see dramatic investment in that area. I look forward to working with everybody in this House in the context of the housing legislation we will introduce in the next few weeks, I hope, and Members will be able to see some of the measures we are introducing right now. I hope to get engagement in the broader consultation that we will facilitate in the next few weeks in the context of trying to put a balanced rental strategy in place that can deal with a multitude of different pressures, ensure that supply continues and that predictability around the management of rents also improves from a tenant and landlord perspective.
Pádraig Mac Lochlainn (Sinn Fein)
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There are people all over the city and in other parts of the State this evening getting ready to join queues outside properties in an attempt to try to put a roof over their heads. There are also dozens seeking a spot in a doorway or in an alley, where the open, starry sky will provide their roof for the night. The rental market in Dublin and other cities in Ireland is in absolute chaos. The chronic shortage of rental properties is unsustainable and something must give. The shortage is getting worse by the month. As of August this year, just over 3,500 properties were available for rent across the State, which is 1,000 fewer than in August last year. Just 1,100 of these properties were available in this city. In the period since 2011, when rents bottomed out following the downturn, rents have risen by over a third. Monthly rents are 10% higher today than they were this time last year.
My party introduced a rent certainty motion in the Dáil in June. At the time we were accused by Fianna Fáil, and particularly its housing spokesperson, Deputy Barry Cowen, of "playing silly buggers" old politics with the issue. We were accused of attempting to undermine the work of the all-party committee on housing and our proposal was described as gutter stuff. My party certainly does not think it was silly buggers or gutter stuff. The silly buggers is that here we are, nearly four months later, with the all-party committee having produced its recommendations, but we still have no rent certainty. The gutter stuff is the poor people living in the gutter on a nightly basis because politicians have refused to act.
Niall Ó Donnghaile (Sinn Fein)
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Hear, hear.
Pádraig Mac Lochlainn (Sinn Fein)
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I should be clear. Rent certainty is not rent control. Rent certainty provides protection for both tenants and landlords. The only way to deal with rapidly rising rents is through legislative change. If we attempt an economic solution to an economic problem, there will be only one outcome. That is the outcome we have witnessed in the past few years because we have refused to act. The market will only fix itself one way in times of lack of supply.
This Government had a big opportunity yesterday to try to fix this problem but Ireland's 720,000 renters were forgotten about. The first-time buyers grant, it is widely acknowledged, will purely increase prices for new builds, and it is a slap in the face for these renters, who will never be able to consider buying with the current rental levels. The Fine Gael amendment is further proof that this Government is just kicking its heels on rent certainty, as it is with so many other aspects of housing policy. It speaks about recognising pressures, a comprehensive response, etc., and although the terms used in the amendment sound good, they will not make a blind bit of difference to the people I spoke about already who will be out queuing this evening, seeking a roof over their heads. The longer measures like rent certainty are put off, the higher rents will rise and the more people will become homeless. This is direct consequence of inaction.
Rent certainty is needed. Those who say they support rent certainty should support the Bill tonight and the parties arguing that they support rent certainty should back it tonight. I appeal to Members to do the right thing. Let us send a message from the Seanad that we can make a proactive gesture to improve the lives of people across all sectors of society. Rent certainty will make a positive change so let us be positive and do it.
It was interesting to watch yesterday's responses to the budget. We all agree the Peter McVerry Trust is at the coal face of this matter, and it saw the budget measures as a series of incentives for developers and landlords. It did not see any real leadership vision or resources presented to deal with the matter. The Minister, who has just left, and the Minister of State face big challenges in our society of housing and rent increases, which are crippling people across the State. The Government is overly reliant on the private sector to address the housing crisis and provide what should be public housing across this State. I have no doubt this is about ideology, specifically a right-wing ideology that believes it is better for the market and privatisation to address social challenges.
Damien English (Meath West, Fine Gael)
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That is not correct.
Pádraig Mac Lochlainn (Sinn Fein)
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The speech of the Minister for Public Expenditure and Reform, Deputy Donohoe, mentioned that the centre must hold. Fine Gael is not at the centre. It is not centrist to abandon hundreds of thousands of our people to the private sector and the whims of landlords. Everybody here represents people.
Damien English (Meath West, Fine Gael)
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Sinn Féin does not want solutions.
Pádraig Mac Lochlainn (Sinn Fein)
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There is no ownership of decency here.All Members know the stories from their areas. They know the stories of landlords who say, "I cannot take you on board if you are on the social" or "I can't take you on board if you are going on the housing list". Members know what is happening out there. There is serious abuse going on and if we abandon our people to that, it will be a massive mistake. If Fine Gael is going to vote this down with Fianna Fáil's co-operation, it better had come up with solutions very soon.
Damien English (Meath West, Fine Gael)
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Sinn Féin does not want solutions. It is very obvious.
Diarmuid Wilson (Fianna Fail)
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Before I call on the next speaker, I would like to welcome Deputy Michael D'Arcy and his visitors to the Public Gallery. The Deputy's guests are very welcome to Leinster House and the Seanad in particular. I hope they enjoy their stay.
Aidan Davitt (Fianna Fail)
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Certainty of tenure and a fair rent are two core principles of Fianna Fáil. By the Senator's own admission, this is a simple Bill. We feel it is too simplistic and that this type of interference could cause more harm to an already chaotic rental market. The main factor in the increase in rents is lack of supply. Introducing a blunt cap at this stage is not the way forward. I recognise that there is a comprehensive social housing programme and I firmly believe that this is the proper mechanism by means of which to deal with this issue and tackle rising rents.
Since the 2015 legislation was enacted, a market cap has been in place and it will remain so four years. Senator Coffey was part of the Government that introduced that legislation, which has been quite helpful to tenants. The Sinn Féin housing policy aims to facilitate the building of 100,000 houses in 14 years. Sinn Féin wants builders to provide 20% social and affordable housing, a measure introduced by Fianna Fáil. Sinn Féin wants to set interest rates. It talks about lowering them and it wants to manipulate the interest rate market and tell banks what they can and cannot charge. It wants to abolish the local property tax, introduce rent regulation and cap rents. It also wants to heavily increase taxes on companies - something we have heard on several occasions - and increase taxes on builders. All these measures are not incentives to build more houses. We must be practical. These measures will not help us build more houses. This is "la-la" economics and would leave us with a massive housing crisis akin to the one that Sinn Féin, as the largest party in Dublin, has overseen. Its hand is on the wheel here in Dublin. We have talked about it. Senator McDowell talked about landbanks in the city centre that could be used to build houses.
Diarmuid Wilson (Fianna Fail)
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Senator Davitt, without interruption.
Aidan Davitt (Fianna Fail)
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Sinn Féin is preoccupied with Fianna Fáil. The Minister was in the House previously and the Minister of State is here now but all we hear is Fianna Fáil this and Fianna Fáil that.
Pádraig Mac Lochlainn (Sinn Fein)
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There is nothing to show.
Pádraig Mac Lochlainn (Sinn Fein)
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The Acting Chairman is in charge.
Diarmuid Wilson (Fianna Fail)
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The Senator should not invite-----
Pádraig Mac Lochlainn (Sinn Fein)
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Who is the Cathaoirleach of this place? Is it Senator Norris?
Diarmuid Wilson (Fianna Fail)
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Senator Mac Lochlainn made his contribution without any interruption. I ask him to afford the same respect to all the other speakers.
Aidan Davitt (Fianna Fail)
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We listened to the three speakers from Sinn Féin who all talked about Fianna Fáil and hardly mentioned Fine Gael. They talked about what they want to do and what they are seeking. When they walk by the homeless people on the streets of Dublin - which is experiencing a serious crisis in this regard - they should remember that Fianna Fáil did not put them there. There were no homeless people in this city on Fianna Fáil's watch.
Jennifer Murnane O'Connor (Fianna Fail)
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Hear, hear. Well said.
Jerry Buttimer (Fine Gael)
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I feel like I should not speak at all at this stage given the comedy I heard this afternoon and yesterday. We all take this issue seriously. Where I agree with my colleague-----
Niall Ó Donnghaile (Sinn Fein)
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The Senator should not refer to it as a comedy. It has been a very good debate.
Jerry Buttimer (Fine Gael)
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What I find comical is the constant prevarication and the back-and-forth nature thereof. If Sinn Féin wants to engage in serious politics, let us come to the middle because that is where-----
Pádraig Mac Lochlainn (Sinn Fein)
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Does Senator Buttimer include his party's Minister in that?
Jerry Buttimer (Fine Gael)
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I did not interrupt the Senator. That is where we should be.
Niall Ó Donnghaile (Sinn Fein)
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I am engaged in serious politics.
Jerry Buttimer (Fine Gael)
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It is not about trying to score points or opposing everything. We can all come in here and provide heart-wrenching human stories involving people in our communities about which we hear every day. They are not statistics on a quarterly report - they are real people. If Members have not already done so, I ask them to read the action plan on housing and homelessness. It did not happen overnight and it did not happen because people were not concerned. It happened because we are in the midst of the worst housing crisis ever. We can all apportion blame but the people about whom Senator Mac Lochlainn spoke who will queue to view properties tonight or the people in Cork who will go into homeless shelters, search for emergency accommodation or sleep in hotel rooms need and want us to deliver for them. That is what this Government is about.
Sinn Féin Members might want listen to the contributions of the Minister, Senators Coffey and McDowell and others. There are consequences involved. I speak not as a multiple home or property owner. I own my own house so I am not flying the flag for anybody other than those who require housing. We cannot deal with issues in isolation. We must parse the various issues. Regardless of whether we like it, one of the fundamental problems in this housing crisis is the lack of supply. If one talks to auctioneers, landlords, tenants or people who want to buy, one will see it comes down to supply. We do not have enough houses and that is the consequence of bad decisions made over a long period. I will cite two examples. We have seen the growth of Cork Institute of Technology and University College Cork, both tremendous higher-education institutions. The growth of Cork University Hospital is linked to that. What did we do in terms of providing accommodation for students? We did nothing. As a consequence, vast swathes of areas are taken up in private rentals for students when they could be used to cater for people who want to buy or rent or the city council could take over some of the properties. As Senator Landy said, people are now using Airbnb.
Senator Coffey talked about the legacy of the boom-and-bust cycle. We must ensure, as we have done in the budget, that we can get first-time buyers to purchase and have a private rental sector that actually works to suit tenants. Regardless of whether Sinn Féin Members like it, we need landlords. In many cases, landlords are not pariahs. I have appeared before the PRTB with residents against landlords and I do not fly the flag for them. However, we need landlords who are responsible and who have houses to let as their main source of income so that people can live in them. If we do not have that, we will get nowhere.
The fundamental difficulty is in the context of the rental sector. I come in here and listen to people giving out about what the Government are not doing. I will provide a couple of facts so that we can debunk this myth in the context of Government. There was an action plan for housing within 100 days of Government. I accept the all-party committee was set up under the chairmanship of Deputy John Curran but the Minister, the Minister of State and the Department have been driving this, as has the Government. The one thing I have learned in opposition and in government is that it is very easy to come in every day and criticise. They should go and talk to their colleagues in Northern Ireland and ask them what is like to be in government. They will provide the answer.
Jerry Buttimer (Fine Gael)
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It is called having to make decisions and having to be responsible. People cannot go from Malin to Mizen Head and all points in between giving out about matters.
Paudie Coffey (Fine Gael)
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There is homelessness in Belfast.
Jerry Buttimer (Fine Gael)
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It is not possible to do that unless a person is prepared to say " I am willing to act when in government."If the Members opposite do, then let us have a proper meaningful talk.
I will give the Members opposite some figures. Up to €200 million has been allocated to the local infrastructure housing activation fund to remove infrastructure blockages to larger housing developments and, in turn, to deliver more supply. A help-to-buy scheme has been announced for first-time buyers with a tax refund of up to 5% of the value of the house with a €20,000 cap. I know the academics have had a field day before and since the Budget Statement. However, I have had telephone calls today from people who want to buy a house in Cork city but tell me they cannot find one.
We have given a 5% increase in tax relief for landlords in 2017 to encourage investment. One problem we have is people with distressed mortgages in buy-to-let schemes and it is in rag order. Some of the conditions of rental properties are sinful and immoral. I have a fundamental difficulty in how the Private Residential Tenancies Board, PRTB, does it business. We need to be more proactive in going after those landlords who do not treat tenants with respect. The increased threshold for the rent a room scheme to €14,000 will ease pressures on rents. An increase of €105 million for the housing assistance payment scheme will benefit 15,000 families.
The four keys areas in tenancies are security, supply, standards and services. Rather than divide the House, will Senator Trevor Ó Clochartaigh park the Bill? Like the housing committee in the Dáil, we should come together in a national movement to ensure supply is increased and we do not have the awful human tragedies of people living on the streets of our cities, not able to rent or buy a house. These are the very people we meet every day. There is nothing more distressing or upsetting than to be confronted with the possibility of losing a tenancy or being homeless. Political point scoring does not work. The Government is committed to dealing with this. Members opposite should join us in ending this scourge. Together we can go back to the people who have elected us to the Houses of the Oireachtas to improve their lives, which is a fundamental part of this budget.
Fintan Warfield (Sinn Fein)
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Senator Jerry Buttimer spoke about how we in the Chamber can all share stories about the housing crisis. I certainly would not make apologies - I would not expect him to either - for expressing the needs and concerns of those most marginalised.
Sinn Féin is in government in the North and works at local government level too. One of the first events at which I met Senator Paudie Coffey was when he was Minister of State. It was at the launch of the Valhalla sheltered housing development in the heart of Clondalkin two years ago. Since that time, however, those on the South Dublin County Council housing list continue a nine-year wait for social housing. We made decisions in South Dublin County Council which had 300 houses ready to go. Despite our local authorities doing their utmost, they cannot do it alone.
Queues of residents, homeless people, students and young people hoping to find a room are commonplace in Dublin city. Every week night, the effect of years of policy inaction, which started well in advance of the Government's term, is visible as crowds gather to rent a property or room, some with deposits in hand, in the hope of their names and references being accepted by landlords. Now online property and rental sites feature rooms with multiple bunks. Staggering homeless figures are evidence of the horrific effect of our lack of affordable rental options.
The Minister, Deputy Simon Coveney, referred to the scenario facing students who need housing every September. He said it affects 25,000 young people, but I have heard the figure is more likely to be 50,000. Market stability should be the long-term goal with meaningful rental options on offer. Rent certainty gives students, young people and homeless people security and a stake in a rental market that has all but left them behind. I encourage Senators from all parties to take significant and meaningful action tonight by voting for this Bill which supports affordability and tenancy rights, as well as what the organisations on the ground are telling us, namely, that certainty can be the start of a significant process in solving this crisis.
Yesterday afternoon, the tax and spend measures announced in the budget showed Fine Gael continuing the same failed housing policies which have dominated public policy for decades. The Minister for Finance's first-time buyer's scheme is available on homes up to the value of €600,000, a measure which will only drive prices higher. It is quite telling the Government thinks struggling first-time buyers will consider a house purchase of between €400,000 to €600,000. The Minister for Public Expenditure and Reform's increase in capital investment in social housing of €105 million will deliver only 900 new houses. That is not combined with the extra €17 million to be given to the housing associations which will deliver only 100 extra social houses. Sinn Féin believes the losers are once again those without a home and those struggling to keep their own.
Trevor Ó Clochartaigh (Sinn Fein)
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Cuirim fáilte roimh an Aire Stáit. Ba mhaith liom buíochas a ghabháil leis na daoine a labhair sa díospóireacht áirithe seo.
An article in the Galway Advertiserin June, with the headline, “Huge rent increases across Galway”, puts this into context:
Over the last 12 months, rent in Monivea has skyrocketed by almost 60%. In early 2015, average monthly rent in the area was €568, but the last year has seen a 57% increase, with prices now peaking at more than €894 per month.
Over the course of a year, or 12 month lease, that represents an additional €3,912 that a tenant must pay to a landlord.
Not many Members might be aware of it but I did a degree in commerce and studied economics for a while. There is a fundamental flaw in some of the arguments put forward by both Fine Gael and Fianna Fáil. They argue the reason rents are increasing is because of lack of supply. That is only an element of what is going on. When I was learning fundamental economics, we were told another issue in the lack of supply would be vultures coming into a market who would be willing to pay more because there would be less of the commodity available. That is what is happening in many cases in our housing market.
Recently, a director of services in a local authority told me they try to buy houses which come onto the market with the moneys available to them. However, increasingly, they are seeing fellows in sharp suits, as he said, coming to sales representing the vulture funds. They will pay over the odds for any houses coming onto the market. It is a bit like the spike in oil prices and what is happening with sterling. Rents are increasing as a result of the increased yields these vulture funds are looking for on their investments. There is talk about accidental landlords. These vulture funds are forcing those landlords out of the market and putting rents way up. Essentially what one has is extortion supported by Government policy. These vulture funds are taking the large sums of money, referred to in the article from the Galway Advertiser, from the pockets of people trying to make ends meet.
There has been much talk about what is a normal functioning market. There are functioning markets in Germany, France, Belgium, the Netherlands, Denmark and Sweden. A part of their markets is having rent certainty. Mention was made of people getting out of the market. I would like to see the vulture funds get out of the market and not get as much money. I would like to see rents at a less volatile level. Rent certainty would deliver that. As for accidental landlords getting out of the market, there were some people who got involved in the property market at the height of the boom when prices were very high, as the auctioneers to my left would know, paying way over the odds for housing stock
Aidan Davitt (Fianna Fail)
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It is good to employ a few people too.
Trevor Ó Clochartaigh (Sinn Fein)
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If they want to get out of the market, why not let the local authorities buy them out and put that housing stock back into their hands?
It has been thrown at us by Fianna Fáil that this legislation is highly flawed and it has a great policy for this area.Where is its legislation? It should bring forward its own Bill and we will examine it.
Aidan Davitt (Fianna Fail)
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"Simplistic" was the Senator's word.
Trevor Ó Clochartaigh (Sinn Fein)
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If the Fianna Fáil Members cannot bring themselves to support our motion, they should at least have the decency to abstain so that the remaining Senators can vote on it.
It is ironic that Senator McDowell called our legislation mistaken but well-intentioned. That is from a man who was the leader of a former party whose members were the architects of our boom and bust economy. Some of its former representatives in these Houses are the champions of the construction industry. They will definitely look to a more developer-led, privatised situation because what we have here is a fundamental difference of ideology.
I welcome the Minister of State's measured remarks, which I listened to carefully, but there is a fundamental difference of opinion in terms of the ideology because he said he wants to increase the amount of private housing in the entire housing sector. We would push more towards greatly increased delivery of social housing-----
Paudie Coffey (Fine Gael)
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The Minister wants to increase social housing as well.
Trevor Ó Clochartaigh (Sinn Fein)
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-----through local authorities and voluntary housing trusts. That is a fundamental difference.
We are not the only ones proposing rent certainty. There is a great deal of support for rent certainty. The organisations that support this approach are Focus Ireland, the Peter McVerry Trust, the Simon Community, the Society of St. Vincent de Paul, DEPAUL Ireland, Merchants Quay Ireland, Threshold, the Dublin Homeless Network and the Cork Homeless Network, to name but a few. These are the people who are dealing with the people on the streets. They pick up the pieces after the failed strategies to date. I would take their opinion much more than I would take a lecture from the likes of Fianna Fáil about flawed legislation being brought forward.
The Minister said we need a long-term reaction to the crisis. We have never said that rent certainty is the panacea that will fix everything, but we need an immediate intervention in the market to make a difference. Sinn Féin sees this Bill as a very small part of many different measures we brought forward in our alternative budget. I am sure all the Members have read that and I wish they would have taken more of our ideas on board. We believe this Bill is very important.
I want to put on the record some of the different suggestions made to us. We have suggested, within the fiscal space available, that in addition to introducing the rent certainty measures, an additional €8 million in funding would be provided for domestic violence refuges, an additional €24 million for homelessness, €15.75 million for housing adaptation grants, an extra €10 million for the warmer homes scheme, €16.65 million for the local government fund-----
Kieran O'Donnell (Fine Gael)
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That is not relevant to the Bill.
Trevor Ó Clochartaigh (Sinn Fein)
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It absolutely is relevant. The Government told us what it put in its budget. Surely it is relevant for me to say what we would have done differently with the same moneys.
Paudie Coffey (Fine Gael)
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It would be interesting to know what Sinn Féin would put in it, but we would like to know how it would fund it as well.
Damien English (Meath West, Fine Gael)
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Take €1.7 billion in taxes-----
Paudie Coffey (Fine Gael)
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Sinn Féin wants to tax jobs and tax employment. It is a high tax party.
Kieran O'Donnell (Fine Gael)
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Will the Senator deal with the rent certainty aspect of his Bill in the time remaining to him?
Trevor Ó Clochartaigh (Sinn Fein)
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I would try to if I was not being barracked.
Senator Coffey should know that all the figures are available. They all add up and they have been checked by the Department of Finance.
Rent certainty is essential. It is a short-term immediate measure that would make a huge difference to all those who are in jeopardy of losing their homes. We know the human stories. This is not about playing politics. It is about trying to make a difference. We are asking the Minister to help us make that difference. We welcome the support from Senators across the floor. I hope Fianna Fáil, even at this late date, would not support or at least abstain in the vote on the Government's amendment to the motion. I hope we will see support for this Rent Certainty Bill, which would make the Seanad relevant and help us make a difference for all those people who need our support tonight.
Tá
- Catherine Ardagh
- Colm Burke
- Paddy Burke
- Ray Butler
- Jerry Buttimer
- Maria Byrne
- Lorraine Clifford Lee
- Paudie Coffey
- Paul Coghlan
- Martin Conway
- Paul Daly
- Aidan Davitt
- Frank Feighan
- Robbie Gallagher
- Tim Lombard
- Gabrielle McFadden
- Michelle Mulherin
- Jennifer Murnane O'Connor
- Catherine Noone
- Kieran O'Donnell
- Marie Louise O'Donnell
- John O'Mahony
- Neale Richmond
- Diarmuid Wilson
Níl
Tá
- Catherine Ardagh
- Colm Burke
- Paddy Burke
- Ray Butler
- Jerry Buttimer
- Maria Byrne
- Paudie Coffey
- Paul Coghlan
- Martin Conway
- Mark Daly
- Paul Daly
- Aidan Davitt
- Frank Feighan
- Robbie Gallagher
- Billy Lawless
- Tim Lombard
- Gabrielle McFadden
- Michelle Mulherin
- Jennifer Murnane O'Connor
- Catherine Noone
- Kieran O'Donnell
- Marie Louise O'Donnell
- John O'Mahony
- Neale Richmond
- Diarmuid Wilson