Written answers

Tuesday, 19 May 2015

Department of Environment, Community and Local Government

Private Rented Accommodation Costs and Controls

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Socialist Party)
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472. To ask the Minister for Environment, Community and Local Government his views on the report by daft.ie on rental costs and supply (details supplied), which indicates the lowest availability of private rented accommodation since 2006 and a rise in the cost of rents particularly in Dublin; and if he will make a statement on the matter. [19346/15]

Photo of Alan KellyAlan Kelly (Tipperary North, Labour)
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The Daft.ie Rental Report for Quarter 1 2015, which was published last week, reported that year-on-year inflation in rents continued to ease slightly in the first three months of 2015. It reported that rents nationally were 8.2% higher than in the first quarter of 2014, down from the 10.4% annual increase recorded in mid-2014. While the report recorded a slow-down in rent inflation in Dublin, this was offset by an increase in the surrounding counties. These trends are broadly in line with the most recent data from the Private Residential Tenancies Board (PRTB) whose rent index is based on actual rents paid as opposed to the asking price. The PRTB data shows that in the fourth quarter of 2014, rents were 5.8% higher nationally than in the same quarter of 2013. Dublin, however, was seeing the highest rates of increase nationally with rents there higher by 9.6% over the same period although the rate of annual increase was down slightly.

The daft.ie report notes that a shortage of supply is at the heart of rising rents and the Government is addressing this on a number of fronts. Construction 2020 A Strategy for a Renewed Construction Sector, published last year, is aimed at addressing issues in the property and construction sectors and ensuring that any bottlenecks that might impede the sector in meeting residential and non-residential demand are addressed. Construction 2020 also commits to identifying and implementing further improvements to the planning system to facilitate appropriate development. The General Scheme for a Planning and Development (No. 1) Bill aimed primarily at addressing the current housing supply shortage situation was published in November 2014. The main provisions in this Bill are:

- the revision of the Part V arrangements on social and affordable housing;

- retrospective application of reduced development contribution charges, and

- the introduction of a vacant site levy to incentivise urban regeneration and the provision of housing in central urban areas.

It is estimated that the revised Part V arrangements will contribute in the region of 4,000 housing units to the delivery of the output targets included in the Social Housing Strategy. The Bill is currently being drafted in consultation with the Office of the Parliamentary Counsel with a view to publication in the coming weeks and enactment before the summer recess.

Addressing the supply shortfall in housing will take time but in the period since the publication of Construction 2020, some welcome signs of recovery in the sector have become evident. Particularly notable in this regard is the increase in the number of house completions in 2014 to 11,016 units nationally – an increase of 33% on the 2013 figure. The latest figures for new house completions show that 2,629 units were completed in the first three months of 2015, up 26% on the corresponding figure for the first quarter 2014.

Social housing is a key priority for the Government, evidenced by the additional €2.2 billion in funding announced for social housing in Budget 2015 and the publication of the Social Housing Strategy 2020 in November 2014. The total targeted provision under the Social Housing Strategy 2020 of 110,000 social housing units includes the delivery of 35,000 new social housing units through Pillar 1. The private rental sector, through Pillar 2 of the strategy, will accommodate up to 75,000 eligible low-income households primarily through the new Housing Assistance Payment (HAP) scheme. Social housing targets have been set for each local authority out to 2017 and are available on my Department’s website at the following link: .

The National Economic and Social Council (NESC) report Ireland’s Rental Sector: Pathways to Secure Occupancy and Affordable Supply which was published last week, is a welcome and timely contribution to the debate around the rental sector. The report calls for more secure occupancy for tenants, including greater rent certainty as well as measures to increase the supply of rental housing. The recommendations put forward in this report will be considered carefully in the context of framing any measures in relation to the rental market.

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