Tuesday, 1 October 2019
Nithe i dtosach suíonna - Commencement Matters
I ask the Minister for Housing, Planning and Local Government, in light of Ireland's climate change targets and the likely impact of increased fuel prices on tenants in particular, what his plans are to accelerate the retrofitting of social housing and raising energy ratings of private rental accommodation while protecting existing tenancies.
We know Ireland has been a laggard with climate action and it also has some of the highest home energy costs in Europe. Those costs will necessarily need to increase because the price will need to reflect the real cost of carbon. This increase will particularly affect the 372,000 persons currently in receipt of fuel allowance. Many of those who would be most affected by higher fuel costs are those who are renting; they would be either tenants in public housing or in private rental with less control over their environments and energy consumption, as well as the energy rating of the home in which they live.
The Government is falling far short of its target for retrofitting. The climate plan sets out a goal of 500,000 deep retrofits, or 50,000 per year, and although many would see a higher number done, last year there were only 250 deep retrofits and 21,000 shallow retrofits. Over the past six years there have only been 70,000 forms of retrofit at all with local authority housing.
Will the Minister address both energy poverty and climate action by deeply retrofitting the 9% of all housing stock that is currently publicly owned or under public funding, either through local authorities or approved housing bodies? This is a chance to take a significant step through mitigation and adaptation. By dealing with 30 to 40 landlords within that 9% portion of housing stock, the Government could have access to 150,000 homes. I am asking for a doubling or trebling of the resource allocation for retrofitting of local authority housing. St. Vincent de Paul has recommended €50 million at a minimum to take a step in that regard.
There is also an urgent need for a new approach in retrofitting of private accommodation. Rents in Dublin are 34% higher than the previous peak and there is low take-up of current schemes by landlords. The proposals from St. Vincent de Paul suggest we need to increase the energy standards in the private sector through a combination of carrot and stick. We may need incentives. I know there are improvements in the new rental and tenancies Bill, but this still allows for the raising of rent, which creates a pressure. Many tenants would prefer to absorb higher fuel costs rather than risk an increase in rent. We must recognise that retrofitting must happen without an increase in rent for Part 4 long-term tenants as it is about raising the standard to at least a C rating in private rentals by 2030. We should offer incentives to landlords but where we do, we must ensure we do not see an increase in rent as well. In effect, we should help them with compliance rather than giving a mandate for an increase in rent.
I hope we can front-load action in this area in the upcoming budget. There are many forms of climate action that are difficult and have multiple stakeholders. There is much capacity for action in this area. If we do not front-load this, the price will be paid by individuals in fuel costs; it will be paid by tenants and the State's citizens. This is a message about mitigation, adaptation and just transition. I thank the Minister of State.
I thank the Senator for raising this important issue. The Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, sends his apologies for not being here today.
The aligned and shared vision of the national planning framework, in tandem with the national development plan, represents a joined-up planning and investment strategy for Ireland's future growth and development, focused on a series of ten shared national outcomes. It includes a number or ambitious climate action objectives specific to the built environment sector, including delivering, of course, more sustainable growth of compact and connected cities, towns and villages. Greater energy efficiency is a key benefit of this type of compact growth. The multi-storey and terraced buildings in close proximity that this type of development involves require less energy, as the Senator will know, and make renewables-based systems of energy distribution such as district heating or area-wide technology upgrades more feasible.
The Department of Housing, Planning and Local Government has responsibility for multiple actions in the all-of-government plan to tackle climate breakdown, including aspects of the built environment. The Department is driving a number of actions that will contribute to more energy efficient housing. In terms of social housing, securing improved energy efficiency has been the focus of concerted action for some time. Indeed, funding of €135 million has been provided from 2013 to 2019 to improve energy efficiency and comfort levels in over 70,000 local authority-owned social housing homes. In addition, energy efficient measures have been incorporated into the 9,000-plus vacant social housing homes that have been returned to productive use since 2014. This effectively means that approximately 50% of our social housing stock has had a certain degree of energy retrofitting works carried out, thus improving comfort levels and addressing issues around fuel poverty. This programme has two phases. The bulk of the work undertaken to date has been centred on phase 1, which has focused on lower-cost improvements, such as cavity wall and attic insulation. Phase 2 will target higher-cost improvements such as fabric upgrades and glazing. The roll out of phase 2 will be a key component of the retrofitting ambitions for the housing stock more generally set out in the Government's climate action plan, and will be taken forward in the years ahead in light of available resources.
Rented properties present a particular challenge in terms of energy efficiency upgrades owing to what is termed as a split incentive. I do not know if the Senator is aware of that effect but it refers to instances where landlords meet the cost of improvements, while tenants reap the bulk of the benefit. The objective is to identify the most appropriate policy interventions that would minimise adverse impacts on the availability of accommodation, while improving energy efficiency and addressing fuel poverty, of course. In that regard, there is an advisory group that is comprised of the Departments of Communications, Climate Action and Environment and Housing, Planning and Local Government and the Sustainable Energy Authority of Ireland. The advisory group is reviewing the issue of the split incentive in the rental market. The group will shortly initiate a public consultation with the focus on identifying proposals, which will help to address the issue. That public consultation will be open to everybody, politicians and the like.
From 1 November 2019, building regulations will require that for all dwellings, including rented dwellings, where more than 25% of the surface area of the building envelope is renovated, the energy performance of the renovated dwelling should achieve a building energy rating, BER, of B2 or the cost optimal equivalent.
All newly-constructed properties built to the new Part L regulations from 1 November 2019 will typically require a BER rating of A2 for a new dwelling subject to transition arrangements. Enhancing protections for tenants is a priority for the Minister for Housing, Planning and Local Government. To that end, the Residential Tenancies (Amendment) Act 2019 introduced a number of key measures and reforms designed to enhance protections for tenants across the board, including applying the new Residential Tenancies Board, RTB, sanctioning regime to improper conduct by landlords who contravene the tenancy termination provisions.The Act provides that where a landlord terminates a tenancy because he or she needs to substantially refurbish and/or renovate the property, the property must be offered back to the former tenant who provides his or her contact details on completion of the works. The Act defines "Substantial change in the nature of rental accommodation" to illustrate the type of works that qualify for the exemption from the rent pressure zone, RPZ, rent increase restriction include works that result in a permanent extension, increasing the floor area by 25%, an improvement in the BER by at least seven ratings, an improvement in the BER by three or more ratings where the original BER was D1 or lower, or an improvement in the BER by two or more ratings where the original BER was C3 or higher, taken together with other changes. This provision allows the landlord to set a fair rent to reflect the substantial upgrade works carried out for the benefit of tenants.
In addition, the notice periods for the termination of tenancies in the rental sector have been extended significantly. The Minister for Housing, Planning and Local Government will be continuing to ensure improved energy efficiency and associated amelioration of fuel poverty, both in social housing and the private rental sector, will continue to be the focus of attention in the years ahead.
Unfortunately, he did not answer my question about the amount of money that is planned to be invested. He has stated only that investment will be made "as resources allow." We are not standing still on this issue as every year we fail to retrofit, there is a cost to the public and individuals. That is the reason I question the split incentive. It is a straw man. The real issue is the double penalty, the penalty paid by tenants and the penalty paid by the State because of a failure to retrofit housing, while landlords have been reaping the benefits. We cannot look at rents continuing to rise. I would like an exact answer to my question as to whether there is a plan to accelerate or double the investment in retrofitting local authority housing in the next year.
The Senator mentioned the effect of the split incentive, whereby the economic benefits of reducing energy levels did not accrue to the party who was achieving the savings. A landlord is not incentivised to upgrade a rental property to make it more energy efficient because he or she does not gain a direct benefit. I agree that that is a problem.
It is the tenant who benefits through cheaper energy bills and having a warmer home. This is reflected across Europe. I know that the group will be meeting in the next couple of weeks. I do not have the figure for or a layout of the cost in the coming years, but let me emphasise that more than €135 million, a substantial sum, has been provided for expenditure in the period 2013 to 2019, inclusive. If one looks at the fiscal space - we are in a tight space - by any stretch of the imagination, it is a large amount in the context of the size of the economy. In the coming months all stakeholders, including the Departments of Housing, Planning and Local Government and Communications, Climate Action and Environment, the Sustainable Energy Authority of Ireland, as well as interested groups will meet to discuss the issue which is being addressed under action 63 of the climate action plan which is due to go for public consultation in the coming months as part of the long-term renovation strategy. I know that the Senator has a great interest in this issue. I ask her to wait for the recommendations to be made public. People like her and other interested parties can be part of the consultation process. There is an obvious commitment by the Government to deal with climate change. One of the best ways to deal with it is by retrofitting public housing.