I move: "That the Bill be now read a Second Time."
With the permission of the House, I will share time with Deputy Catherine Murphy.
Residential Tenancies (Amendment) Bill 2018: Second Stage [Private Members]
Is that agreed? Agreed.
There can be no doubt that we are living in the middle of a very serious housing emergency. Rents, as we know, are at record levels, with the average rent now at €1,056. The average rent in Dublin is now a shocking €1,518. In the past year, rents have risen practically everywhere. They have risen by, for example, 21% in Limerick, 14% in Waterford and 13% in Westmeath. These are all very strong cases for rent pressure zones. They have also risen by 11% in Cork, where there is an existing rent pressure zone.
Overall, throughout the country rents have increased by 9.5% in the past year. It is because of this that the Social Democrats have brought forward the Bill. We believe the spiralling rents are directly responsible for the surge in homelessness. These increases are simply unsustainable and lay bare the abject failure of a reliance on the market to ensure an adequate supply of appropriate housing for the population. People are paying more money for poorer housing as the market contracts further and further, and desperate prospective tenants are left to trawl through shorter and shorter lists on websites such as daft.ie for any kind of liveable and affordable property.
In addition, I am sure every Deputy here this evening deals on an almost daily basis with families and individuals who are either becoming homeless, have been made homeless, are in emergency accommodation or are sleeping on the floors of family and friends. These situations are a direct result of the failure of successive Governments to effectively ensure the delivery of sufficient housing in Ireland at an affordable price. It is an issue that goes far beyond homelessness, but homelessness is one of the most tragic outcomes of this failure by the Government. The failure to fund proper public house-building programmes over the past number of years, along with the failure to control land prices for private sector housing, has resulted in the current crisis. This, in turn, has put a particularly severe strain on the very poorly regulated rental sector.
We would all like to see a properly developed rental sector. It would be a critical element of any housing strategy. We know that in most other European countries there are strong rental sectors, but they are sectors where people are guaranteed affordable rent, there are effective rent caps and people are assured of security of tenure. In such circumstances, long-term rental is a viable proposition for people in terms of providing for their housing needs. Unfortunately, we are very far away from it in this country, and what we have are many accidental landlords. Many of them were on the airwaves today raising issues about this legislation.
Rent controls are not about ensuring that people who may have become accidental landlords and are in negative equity are bailed out. That is not what rent controls should address. Rent controls are about ensuring people can access good quality rental accommodation at an affordable price. Much work needs to be done on developing this type of long-term rental option for people if we are to ensure people have choice when it comes to the provision of housing.
It is hardly surprising that homelessness is at record levels. According to Focus Ireland, there was a 17% increase in family homelessness over 2017. As it stands today, 8,587 people in Ireland are officially homeless. Of these, 36%, that is, 3,079, are children. By any standard, this is a shocking indictment of the Government's housing policy.
The Government has long been promising to address the fundamental flaws in our housing sector, but progress has been painfully slow. Why is it not a stated objective of Government to drive down the cost of housing and make housing affordable for all families whether buying or renting? This has never been stated by the Government. I would like to hear the Minister's view on this, given that housing is such a central part of people's lives. It is the biggest single purchase that any of us make and it is critical to our welfare, health and well-being, yet the Minister seems to be prepared to stand by while so many people are forced into appalling housing circumstances or homelessness or, indeed, are put to the pin of their collar to put a roof over their heads. It is a central responsibility of the Government to ensure people can access adequate housing in line with their budget.
I would like to hear the Minister coming out and saying it is an objective of the Government's housing policy to drive down house prices, but I have been waiting to hear that and we will be left waiting. I have to ask, and I hope the Minister will answer the question for me in his contribution, why it is that the determination of the former Minister, Deputy Michael Noonan, to prioritise the recapitalisation of the banks and the bailout of property speculators has overridden a key responsibility of the Government, which is to ensure an adequate supply of affordable housing for its people. We all remember too well the then Minister, Deputy Noonan, when he introduced his help-to-buy scheme. It was a stated intention of the scheme to stimulate demand and this, in turn, inevitably inflated house prices. We have to ask, in terms of the previous Government and the former Minister, Deputy Noonan, in particular, who exactly was he serving as a Minister in Cabinet? Was he serving his masters in the banks and some of his masters in the property development sector? Was anybody in government taking their responsibility seriously in terms of ensuring people had access to decent housing?
We now have a population of 895,600 renters in this country. That is 20% of our population living in the private rental sector. Many are in very precarious positions, living in fear of a notice to quit from their landlords. Increasingly, we see landlords seeking to use exemptions under the Residential Tenancies Act, whereby they can claim they are selling or refurbishing the property or moving in a family member to justify termination of a tenancy. At present, the notice periods for tenants in this situation are extremely short. It is these tenants who are the most vulnerable to homelessness, and these tenants who are the main focus of the Bill before us.
The Bill is structured as follows. Section 1 deals with interpretation. Section 2 provides for longer periods of notice for tenants when landlords are terminating a tenancy. Section 3 provides that new tenants would have access to details of the amount of rent paid under the previous tenancy, to ensure the maximum increase for rents charged in rent pressure zones is applied correctly.
Section 4 raises the maximum fine that may be applied under section 9 of the Act from €3,000 to €15,000. With rising rents, the penalties set down in the Act need to be raised in order to maintain an adequate deterrent. Section 5 sets out the Short Title, collective citation and construction.
The Bill provides for longer periods of notice for tenants when landlords are terminating a tenancy. Currently, a very short minimum notice period is set down in legislation. Tenants with less than six months in a tenancy are only entitled to 28 days' notice from the landlord. Tenants resident for between six and 12 months are only entitled to 35 days. In the current climate, where there is a severe housing shortage, it is very difficult, if not impossible, for tenants and the housing services supporting them to find alternative accommodation in such a short space of time. The short notice period is undoubtedly a factor in driving the surge in homelessness, as people are simply unable to source alternative accommodation in such a narrow timeframe.
In a comparative sense, Ireland has very short notice periods for tenants who have been residing in a property for less than five years. Notice periods were improved under the Residential Tenancies (Amendment) Act 2015 but only for those resident in a property for five years or longer. We want to change this. This Bill would extend notice periods for termination of tenancies by landlords so all tenancies under one year's duration would require a 90-day notice period, with tenancies of between one and five years requiring 120 days' notice. The proposed change would amend section 66 of the Residential Tenancies Act 2004 and provide an important extra protection for tenants to prevent homelessness. This change would bring us into line with other European countries where renting is more common.
According to a report commissioned by the Residential Tenancies Board, RTB, the minimum notice period in the Netherlands is between three and six months, depending on how long the tenant has been in residence. The landlord may only seek a termination in certain circumstances, including if it is needed for the landlord's family or a family member's use, if the property is to be sold or if the tenant has broken the terms of the contract. In some cases, landlords may have to cover some of the tenants' moving costs. Conversely, in Sweden it is very difficult for a landlord to terminate a lease, even when strong grounds are cited. In some cases where the landlord wishes to renovate the premises, he or she may have to provide alternative accommodation. In a comparative sense, Irish landlords have a huge degree of autonomy to terminate leases at will.
The vast majority of landlords respect their tenants and treat them fairly. We seek to amend the existing legislation and not punish landlords; rather, our objective is to ensure that landlords act within the law and that tenants can have sufficient time to make arrangements to move out, with a chance to find alternative accommodation to rent without being at risk of having nowhere to go. This is a reality for far too many people in Ireland today and one of the primary pathways into homelessness for individuals and families. An unexpected tenancy termination turns into prolonged couch-surfing, which in turn often leads to homeless services. The proposed changes are not onerous or punishing, despite the reaction from some landlords today to this Bill. In the current climate, where there is a severe housing shortage, it is very difficult for tenants and housing services to source suitable alternative accommodation within 28 days.
As has been pointed out, this section of the Bill will not address the supply issue for housing. That is correct, and the ball is very firmly in the Government's court when it comes to improving supply. We are seeking to ensure families and individuals can be given a proper and fair chance, with adequate time, to find new accommodation in what is a very volatile housing market. We want to ensure all the information and supports are available to these people. As Focus Ireland commented with respect to the Bill, these steps provide those at risk of homelessness or exploitation with time and information. Focus Ireland knows from its work with families and individuals that to prevent homelessness, time and information are the two most important tools.
There are other proposals in the legislation before us that I will speak to later. They relate to ensuring tenants have access to data on people in the accommodation prior to their tenancy and increasing penalties. I will now give way to my colleague, Deputy Catherine Murphy, but I urge Members on all sides of the House to support this legislation.
We are seeing quite significant changes in how people in Ireland live and work but the two cannot be separated when it comes to housing. Contract rather than permanent employment, for example, means lending institutions are not providing mortgages, and even when the income is sufficient, the choice of home ownership for some is simply not available. That is before we even consider more precarious forms of employment. We know there has traditionally been a very high home ownership rate in Ireland but that is changing. The Central Statistics Office report from 2016 indicates the number of owner-occupied households fell from 69.7% to 67.6%, a rate last seen in 1971. However, when aggregated by age, the results indicate renting was more common than owning before the age of 35. Beyond this, more householders owned rather than rented their home. This might change, depending on the type of employment available in future. That is another day's work. The equivalent age in previous censuses was 32 years in 2011, 28 years in 2006, 27 years in 2002 and 26 years in 1991. We can see in the years when family formation primarily occurs or where people desire to live independently, the option that is the one most relied on is renting.
This Bill is about the immediate but it is also about the future. Renting in all its forms will continue to play a bigger role than in previous decades and we must respond to this by developing a rental sector that works for both tenants and landlords. A critical element in this regard is a well-regulated sector, with a regulator that has teeth and where disputes are dealt with in a timely way. What exists now falls very far short of that. One of the main reasons we had a high rate of home ownership is because people, particularly those with children, wanted certainty in their lives that the house they lived in was their home and not just someone else's property. The question is how we achieve that for renters. How do we achieve a longer-term rental sector that assures security of tenure and where landlords are still happy to belong to it?
Like all other Deputies in an area that is described as a pressure zone, the number one issue coming through my door for at least five years has been housing. It has always been there but it has now changed. I see people every week and have done so for more than five years now who will say they never thought this would happen to them. These are functioning families, no different from their next-door neighbours, but they are facing homelessness. The first concern is to find alternative accommodation and, in most cases, the primary concern will be for the children, to keep them in school and connected with their friends and after-school activities. It is about keeping things normal and ensuring their stress is not transferred to their children, even though in most cases these people are cracking up. I have a box of tissues on my desk and it is used all the time, invariably by people who come to me about housing.
There are in excess of 90,000 applicants on housing waiting lists; I stress that these are "applicants" rather than individuals, so a conservative estimate would have approximately 250,000 people on the lists. The criteria for qualifying for social housing includes income thresholds. These are households that cannot afford to buy and which in so many cases are supported by the housing assistance payment, HAP. This is an expensive option that is unsustainable in the medium to long term.
There is no escaping the need for large scale building of social housing.
We proposed the establishment of a housing delivery agency in our manifesto in 2016. We see its role primarily as a project management agency that would control State-owned lands and would aim to achieve efficiencies in the cost of delivering houses for rent and for sale. Efficiencies would occur when the scale increases so it is about building mixed communities with a variety of house size. The agency would have a role in seeking planning permission. Given the certainty that would create, it would be an attractive option for the building sector. Perhaps a collaboration of small and medium-sized building firms could be involved.
This Bill is not aimed at replacing responsibilities. It is focused on both the short and the longer term. We must recognise that there is a fundamental change and we must move with that change.
I thank Deputies Shortall and Catherine Murphy for bringing this Bill forward and for providing us with another opportunity to discuss the development of the rental sector, which is a priority for the Government. I acknowledge the substance of the Bill and its genuine motivation to improve the situation for tenants at a time of under-supply in the residential rental sector. It also addresses some issues that will be covered in forthcoming legislation that is a priority for my Department. The Government will not oppose the passage of this Bill.
The Bill raises some issues that have been considered and addressed in recent legislation and in the Government's strategy for the rental sector, which was published in December 2016. The rental strategy sets out the Government's vision for a strong, viable and attractive rental sector, supported by a policy and regulatory framework that delivers long-term, affordable and high quality accommodation solutions to meet diverse tenants' needs and a secure, predictable investment environment for landlords and accommodation providers. The rental strategy contains 29 actions aimed at achieving improvements in respect of security, standards, services and supply in the residential rental sector. Implementation of the strategy is well under way with many rental reforms already introduced and in train.
A number of targeted measures and initiatives have been announced with the aim of providing better security of tenure, higher accommodation standards and greater rent certainty for tenants, as well as enhancing the supports and services available to landlords to facilitate the development of a more vibrant and sustainable rental sector. These initiatives include the establishment of rent pressure zones in areas of high and rapidly rising rents; the introduction of new rental accommodation standards; new legislative protections for tenants where multi-unit developments are being sold; the strengthening of the role and powers of the Residential Tenancies Board, RTB, to provide its services more effectively such as through accelerated dispute resolution processes, empowering tenants and landlords, and developing a one-stop-shop within the RTB to improve access to information for tenants and landlords. Of course, more must be done. Policies can always be improved and implementation of those policies must be driven.
As part of the review of Rebuilding Ireland, I outlined, last September, a list of further actions to be pursued to broaden further the role of the RTB - for example, a move towards annual registration of tenancies would provide more accurate and detailed data on the rents being charged - as part of a two-year change management plan for the agency. A key commitment is the planned new provision to make it an offence where landlords implement rent increases that contravene the law. The RTB will be given the powers to investigate and prosecute landlords who implement such increases. The onus will no longer be exclusively on the tenant to act.
Rising rents have not been left unchecked. The Fine Gael and Labour Party Government introduced amendments to the Residential Tenancies Act in December 2015 to double the minimum period between rent reviews to 24 months. This measure will apply until 2019. The current Government built on this by introducing an annual rent increase cap of 4% in rent pressure zones. The 2015 Act also increased significantly the minimum period of notice of new rent from 28 days to 90 days and significantly lengthened the minimum notice periods for the termination of long-term tenancies.
With regard to section 3 of this Bill, I am happy to advise Members that under section 12 of the Residential Tenancies Act, as amended by section 33 of the Planning and Development (Housing) and Residential Tenancies Act 2016, when the rent is being set for a new tenancy in a rent pressure zone, the landlord is obliged to inform the tenant of the previous rent paid for the property and the time at which it was set. The tenant or prospective tenant concerned is also able to see the previous rent and any rent increase being proposed and assess whether the rent being sought is in line with the legislation. If a tenant thinks he or she is being charged more than he or she should be in accordance with the law, the tenant can raise the issue with the RTB. In addition, there is valuable comparison data available on the RTB's website. The RTB's quarterly rent index provides rental data information from all rents registered with it during each quarter, based on the actual rents paid, the location, six categories of dwelling types, accommodation size, number of occupants and tenancy length. These reports provide tenants with a general picture of rents by which they can determine if the rent proposed is broadly in line with market rents in the area. Access to rental data as well as rent transparency for specific rental properties is being further considered in the context of drafting the Government's forthcoming Residential Tenancies (Amendment) Bill and of the RTB's change management plan which was announced last September.
Section 2 of the Residential Tenancies (Amendment) Bill 2018 provides for significant increases in the range of minimum notice periods for tenancy terminations by landlords as they apply to shorter tenancies. The current graduated notice periods were prescribed in December 2015 and implemented a recommendation in a 2014 report on the future of the private rental sector, which was commissioned by the RTB. The 2015 provisions introduced the current graduated notice periods as they apply to tenancy terminations by landlords for tenancies of five or more years duration. While the current graduated notice periods have been in place for a relatively short time, the length and notice periods for longer-term tenants appear to be working well. However, having regard to this Bill's proposals relating to extended notice periods for shorter-term lettings, I will reflect on these points in the context of developing the Government's residential tenancies Bill, which is being drafted for publication during this term, cognisant of the impacts on, and needs of, both tenants and landlords.
It is important to understand the need for balance as we address these proposals. The majority of landlords only own one property. The vast majority of landlords are good landlords who are providing a service that people want and need. It is important that further analysis be carried out on the potential impacts of substantially increasing the notice periods to ensure there are no adverse consequences which might deter new landlords from entering the rental market or drive existing landlords from the sector. It is equally important that there are no unintended consequences that might see a sudden surge of notices issued out of fear of what might be perceived as a hasty move to new conditions that are too restrictive for the landlord to continue as a landlord. While the acute pressures in the rental market mean we must manage the inflation of rent prices in the short term, ultimately the most effective way to reduce and stabilise rents in the medium to long term, and benefit the entire sector, is to increase supply and accelerate the delivery of housing for the private and social rented sectors. That is what we are doing under Rebuilding Ireland.
As regards the other section in the Bill before us, it might be useful to outline briefly the current penalties that apply to anybody guilty of an offence under the Residential Tenancies Act. On summary conviction of an offence, a class B fine with a maximum of €4,000 applies or imprisonment for a term not exceeding six months or both. If after the summary conviction the offence continues, a further offence is committed under the Residential Tenancies Act on each day that such action or inaction continues. The maximum class E fine of €500 can be applied to each further offence. If, for example, a landlord persists with an offence for one month following his or her initial summary conviction, a further penalty of €15,000 will quickly clock up. The quantum of the maximum fine proposed in this Bill will be quickly reached under the current law. The Fines Act 2010 under the remit of the Minister for Justice and Equality provides for the payment of fines and the default of fine payments, including the publication of a list of names of persons who do not pay fines on time. However, I have asked my Department and the RTB to re-examine the scale of the penalties applying to offences under the Residential Tenancies Act in the context of developing the Government's residential tenancies Bill which is currently being drafted and is a priority for the Department. I have also asked them to look at what might potentially be described as criminal acts under those legislative changes.
Developing the rental sector is an important goal for the country. In doing this, it is paramount that we avoid unintended consequences of new Government measures. It will continue to be important to balance the rights and responsibilities of both landlords and tenants. The vast majority of small independent landlords are good landlords. They look after their accommodation and their tenants. The Government in its work will continue to enhance the protections under the Residential Tenancies Act and to invest in the services provided by the RTB and Threshold. True housing security for people in the long term must be delivered. All parents wish to be sure that they do not have to uproot their families from their community, schools and familiar environment. This is not just about parents. We all accept that homelessness is particularly difficult for children. Familiarity and community are important. They are settling and a type of personal security, particularly when one is young. Furthermore, developing a more mature and modern rental sector requires introducing affordable rental schemes, as we are doing, as well as incentivising the development of thousands more homes for rent, which we are doing through our new build to rent guidelines.
Implementation of the rent predictability measure is a priority for the Government. When passing the relevant legislation in December 2016, Members will recall that both Houses extensively discussed and reached decisions on the issues and options involved. The rent predictability measure is being implemented and currently covers a majority of private tenancies in the country. I accept that some legal enhancements are necessary to enforce its implementation. That is the clear focus of the legislative measures currently being developed by my Department following the public consultation and review of the rent predictability measure last autumn.
The Government has given priority to the early publication of a Bill during the current Oireachtas term to address rent issues and Deputies will have the opportunity to propose and discuss any new ideas in that regard. I will be asking my officials to reflect on the proposals outlined in this Private Members' Bill to see whether and how to best address these concerns. In light of this, I do not oppose the Second Reading of the Bill.
I will also be supporting the Bill, which I welcome, on Second Stage. It is opportune because, as the Minister stated, the Planning and Development (Housing) and Residential Tenancies Act 2016, which contained provisions for minimum notice periods, the creation of rent pressure zones, the capping of increases within those zones to 4% and the limitation of rent reviews to every two years, was introduced in December 2016. The Government and, in particular, the previous Minister for Housing, Planning, Community and Local Government, Deputy Coveney, said there would be a review of its workings but that has not yet been seen by Members. He said the Commission on Taxation would feed into the budgetary process regarding incentives and initiatives to retain landlords and encourage more landlords into the marketplace but that has not been seen by Members either.
There have also been commitments over a long period of time to provide for an adequate inspection regime. However, considering that there are only approximately 65 such workers across the country for 325,000 rental properties, the failure to deliver on that commitment is also disappointing. Any such measures or incentives that would retain landlords in the sector and encourage more into it would yield a return which is needed in the short term because of the terrible vista and crisis with which we are faced. In the absence of that having been done, I support the Bill as proposed and, no more than any other Member, will allow it to pass Second Stage and move on to Committee Stage. I hope the Government will get its act together in the meantime and be in a position to bring meaningful amendments to the Bill in order to honour the commitments it made this time last year.
My party and I realise the need for immediate initiatives and interjections in the marketplace because the current cost of rent, often upwards of €2,000 in cities, cannot be sustained. Nobody in this day and age who wishes to provide for himself or herself and a family should have to pay such exorbitant rates. We have always bought into the theory that nothing will happen overnight. How many years has the current Government been in power? As I said yesterday and many others said today at a conference organised by the Irish Congress of Trade Unions and attended by many Members, supply is the key to affordability and cost is the key to supply.
The Government, despite its commitments in the programme for Government and the confidence and supply agreement to take away barriers to the construction sector such as cost, development charges, certification costs, cost of finance and VAT, has made no attempt to address those issues. In the absence of any such attempts or the provision of affordable or social schemes along the lines that Members expected, we are faced with this dilemma and I, and many like me throughout the country, meet in our constituency offices the poor, unfortunate people faced with the terrible vista of a landlord telling them there are relations home from the United States or Australia who need the house, or the landlord wishes to make substantial changes and alterations to the house and, hey presto, the tenant is out on the street. We have asked on several occasions for a greater definition and qualification of "substantial alterations". That was committed to by the Government but not acted upon.
I hope that the Government, in allowing the Bill through Second Stage, will give a commitment as to when it will be heard on Committee Stage and when the Government will be able to respond to the Bill and live up to the commitments it has made. I have not seen the report of the Commission on Taxation and have no knowledge of what the Minister for Finance, Deputy Donohoe, considered in his negotiations on foot of that report. The commitment in that regard was originally given by the previous Minister for Finance, Deputy Noonan, during his time in office.
Some 70% of landlords own just one rental property and many are involuntary landlords. There have been no initiatives on the waiving of commercial rates for over-the-shop developments where conversion to residential use could be forthcoming. There has been no initiative to assist with the reduction of local property tax measures to help the industry. In his pronouncement yesterday, the Minister referred to affordable rent schemes. For how long have Members been crying out for such a scheme and expected movement in that area? We have yet to see such movement but yesterday there was talk of pilot schemes that may ensue in the coming weeks and months. We should have a blanket scheme across the country in that regard at this stage.
Nothing has been done regarding the revision of the repair and lease scheme that has been an abject failure. I do not think there have been any recent drawdowns from that scheme. Indications of its potential failure were recognised eight, nine or ten months ago but there has been no progress in that regard. There have been many announcements and pronouncements and many considered, small steps but a lack of urgency, initiative and effort to overhaul the system or bring about new thinking and ways and methods. As I have been saying for quite some time, conventional methods have abysmally failed over the past six years but they are being persisted with.
I made a contribution today, as did Deputies Bailey, Boyd Barrett and Ó Broin, among others, to a housing conference. Many experts were in attendance, as has been the case at various housing conferences over the past number of months, and everybody present at the conference shared a frustration that we have not seen the sort of progress that we thought might emanate from the all-party committee that sat in this Oireachtas and fed into the Rebuilding Ireland programme and provided many credible proposals and suggestions that had the support of all parties and none, some of which were taken on board but many of which were not. The Rebuilding Ireland document was acknowledged as a programme that was well undertaken, well meant and well informed, considering the consultation process that took place, but we always said implementation was key. Unfortunately, the figures do not lie and the terrible failures are evident for everybody to see in so far as when affected people come to our constituency offices there is no house building programme to which we can point and say that there has been progress in the relevant county and there will be more progress.
When the Minister this week met with the CEOs of local authorities and county managers he stated that targets will now be put in place. I have no problem with measuring success in respect of those targets when they are published but I would have hoped, as I said to the Minister last week in the Custom House, that we would also measure failures and be honest and frank about them. How many people were on the waiting lists of each local authority on 1 January 2016? How many houses were built by each local authority and how many purchased in that year? How many houses were built by approved housing bodies? How much land had local authorities available during that year? At the end of the year, how many people were on their waiting lists? If that information was available for every local authority for 2016, 2017 and 2018 we would see the wastage in respect of land and the lack of urgency on the part of either the local authorities, the Department or the Minister who is driving them. It is high time we identified where the deficiencies lie.
We have been told on many occasions that the eight-step process in respect of procurement from when a site is identified to when it is built on, which is often three or four years later, has been reduced to four steps.
It has not, however, made any difference to when these sites become viable. I repeat what I have said in this Chamber for the past two years. In my constituency there are two sites in Tullamore and Edenderry where 30 units were to be constructed. They were identified two and a half years ago and there were various announcements and pronouncements about them. There should be 600 or 700 houses built on the two sites if one was to add up all the times that progress was acknowledged on the sites. As is the case throughout the State, unfortunately, not a digger has moved on site since. This is the reality. While all of that is building up and while there has been no progress in this regard, the demand in the rental sector increases and it manifests itself in Bills such as this coming before the House. Some opportunists in the sector take advantage of the situation and take advantage of leniencies in the existing legislation around timescale and then we have the situations we see in our constituency offices throughout the country. People are in terrible states of being. Their mental state is put to the test in their efforts to house their families or to be in a position to have some hope. Deputies are in a terrible predicament - no more than these people - in not being able to offer hope, because we cannot show progress in this Dáil term with the leadership from the Government.
I spoke earlier about incentives and initiatives that could be put in place that could allow for the creation of improvements in tenure for greater periods. Then there would be no problem with a six-month notice because there would be a tenure of perhaps ten years with incentives, initiatives and support from the Government. The market would work itself out, supply issues would be addressed, the rents would come down and people would have choice. When people have choice there is affordability and that is where we want to get to. That is where we hoped we might have got to at this stage but it has not been the case. As I have said before, it is time for all parties and others to be in a position to start conditioning the public to the different alternatives and mechanisms there are and the different way in which things can be done. The Government seems to be hell-bent on travelling the same road that has failed miserably over the last years.
I thank the Deputies for bringing the Bill forward. I appeal to the Minister and the Government to make sure this Bill is brought to Committee Stage as soon as possible. It will offer the Minister and his Government an opportunity to live up to the commitments and the expectations they gave us when they made resolutions on foot of the passing of the previous Residential Tenancies Bill that there would be a review and improvement of that legislation, in addition to the limited success it has had, and that positive initiatives would be brought forward to help and assist the landlord sector to ensure that properties are available for greater tenures for those who need them in the meantime.
Sinn Féin is more than happy to support this legislation from the Social Democrats. I thank them for the introduction of this Bill. It is eminently sensible. I cannot see any reason, nor have I heard any reason on the floor of the Chamber tonight, why anybody would not support it enthusiastically and see it passing into legislation.
The extended notice to quit periods should be in place as a matter of course but they are particularly important in the current homelessness crisis. Deputies are dealing with families who have received notices to quit. While housing assistance payment, HAP, accommodation is coming on stream it is happening incredibly slowly. I deal with families every week who find that securing private rental accommodation after they get a notice to quit can take three, four, five and six months because there are far more people out there looking for rental properties than there are rental properties available. To stem the flow of families in particular into homelessness, the proposals in the Bill would be preventive measures that should remain on the Statute Book afterwards as general tenants' protections.
The Minister spoke of unintended consequences. When the Minister was on "Morning Ireland" yesterday I noted with interest that he seemed to think by introducing these changes a tenant who moves into a property and does not pay his or her rent could avail of these measures. The Minister has not repeated that today and I presume it is because his officials told him that no such thing is possible under current legislation. There is a specific provision that would prevent such an occurrence; if a person does not pay the rent he or she is subject to a 14-day notice and a 28-day notice to quit, irrespective of how long the person has lived in the property. I am sure the Minister can confirm that to the House in his remarks later.
The second measure in the Bill covers access to the rental rate of the last tenant. The Minister is correct that the current legislation requires the landlord to give people that information. We are aware, however, that landlords are not doing this. If one considers the dramatic rise in asking rents on daft.ie or myhome.ie we can see a two-tier rental market. People like me who are long-term rental tenants are availing of the average rents and our landlords are complying, but new tenancies are way beyond the 4% limit. Having some independent check and verification for tenants is a good thing and I can see no reason it would not be supported.
With regard to the increase in the maximum fine, the Minister has said that it would not be too long before a bad landlord racks up €15,000 worth of fines. This means that for a tenant to be properly protected he or she has to wait for multiple breaches of the legislation before a serious punishment and serious deterrent is available. The problem with enforcement of the rent pressure zones is that it is up to tenants to police it and to take cases to the Residential Tenancies Board or elsewhere. This is fine if the tenant has a relatively secure tenancy, but it is simply not adequate that those at the bottom end of the rental market in very vulnerable circumstances should self-police an already badly designed rent pressure zone system. A stronger first-off offence fine is one good way of ensuring that the measures, limited as they are, are properly adhered to.
Earlier in this debate the Minister said he is not opposing the Bill. This is supposed to sound as though he is not actually against it. I believe that the Minister should just be straight with us; he does not support these measures and we will not see them in the forthcoming legislation around the enforcement powers of the Residential Tenancies Board. The fact of the matter is that the Minister is simply too embarrassed to lose a vote and so he will not force a vote on it. We have to get past this nonsense of people saying they are not opposing something. The Minister should tell people if he is not in favour of stronger protections for tenants, tell people he is not in favour of an independent check for tenants in rent reviews and tell people that he does not want stronger deterrents and punishments for landlords. That would be much more honest than the position we have in front of us today. The Minister is correct that it is a minority of landlords but they are landlords who nonetheless breach the legislation.
The reality for renters is that the rent pressure zones are not working. They are not constraining rents to such an extent that people are able to get by. The evidence we have from all the rental indicators is that average rents have gone up by 10% to 11% since the measure was introduced. We also see that asking rents are at astronomically higher prices than average rents. Not only do we need to see the proposed measures in this Bill we also need to see and hear the Government accept that rent pressure zones have not worked and it needs to go back to the proposal that many in this House have supported and introduce legislation that links rent reviews to an index such as the consumer price index to give renters the real protections they deserve.
I will pick up where Deputy Ó Broin left off. I commend the Bill. For a long time Ireland has lagged quite a distance behind EU comparators in protections for tenants and not just in the area this legislation deals with. Previously we have discussed the issue of tenants being able to remain in a property after the property is sold, which is a frequent occurrence. The amendments proposed in the Bill are of considerable value. Substantial areas of Cork were included in the rent pressure zones and it has created some anomalies where significant urban areas near the city were not included. An all-State approach would have been preferable. One year on from the introduction of the rent pressure zone measure I question whether it has made any significant difference to people in my constituency and the surrounding areas.
Tenants, particularly those in receipt of HAP and other payments, are in a difficult position in terms of seeking to have this enforced. As Deputy Ó Broin has said, it is quite the ask of someone who is aware that there is a significant lack of alternative rental accommodation to pursue it with the Residential Tenancies Board. All sorts of approaches have been used by unscrupulous landlords, including stating they require it for their own use and then renting it again some months subsequently. I have also come across the term "renovictions" whereby landlords explain away the eviction on the basis renovations are required but these subsequently do not go ahead. On a much larger scale, the carrying out of renovations was used as a spurious excuse for evictions in the Leeside apartments.
It is clear that there is a need to strengthen our legislation governing the private rental sector in order to give people greater security of tenure. I believe the amendments proposed in the Bill would make a significant difference in that regard.
I thank Deputies Shortall and Murphy for bringing forward this Bill because it will make important and helpful changes for those who find themselves in difficulties in their rental situation. As is the case with most Deputies, our constituency offices are overwhelmed by people calling with housing issues. Yesterday I was dealing with a woman, Maureen, in Limerick city who is 69 years of age, has been renting the same house for 30 years and recently received a notice to quit. This came as a massive shock to her and she was very upset. After contacting Threshold, she was informed the notice was invalid and she now has slightly more time in her home before she has to leave. This woman's case highlights how vulnerable are those who rent their homes.
Section 2 of the Bill, which aims to extend notice periods, would have helped Maureen and, if passed, would provide renters, particularly long-term renters, with more time to find a new home if their tenancy is terminated. As stated by my colleagues, the current short notice periods are a factor feeding into the homelessness crisis as tenants can find themselves put out of a house with few or no alternative options on the market in this housing crisis. I thank Novas Initiatives and other organisations throughout the country like it which provide an excellent service for those who find themselves in such situations.
I welcome section 3 of the Bill. This welcome provision aims to give tenants access to information on the previous rent paid in order to see if the rent caps are being applied. Although rent pressure zones are limited in their effectiveness, they do give some renters certainty where they are in place. Unfortunately, despite Limerick city seeing rent increases of 19.1% in the past year, it is still not listed as a rent pressure zone. We have had increases of 57% in the past five years in the rental market. Landlords who flout the law are still commonplace and enforcing the current legislation is a massive problem. Therefore, the increase in penalties for breaches of residential tenancies laws may make some of these unscrupulous landlords rethink their ill-treatment of their renters.
Like my colleagues, I am happy Sinn Féin is supporting the Bill and, again, I thank Deputies Shortall and Murphy for bringing it forward.
I thank Deputies Shortall and Murphy of the Social Democrats for bringing forward this Bill. We will be supporting it fully. I note that the Government is not opposing the Bill but I reiterate what has been said, which is that we would like to see the Bill implemented and not just be unopposed. The Bill adds to the protections that are so urgently needed for those in the private rental sector at the moment. People are extremely vulnerable for a lot of reasons but it is mainly due to the shortage of supply given so many people are now in the sector and competing with each other.
My first point is that, even if they have a genuine grievance that might well win a case in the Residential Tenancies Board, people are afraid to complain. They are afraid to bring forward their case because they are afraid they will not be able to find somewhere else that they can afford in the area where they need to live if they lose their tenancy. That is a real problem. Last Friday I dealt with a woman who has three children. She is a separated lone parent in receipt of rent supplement. Her landlord increased her rent by €100, which is topping up. This is not allowed under the rent supplement scheme although it is allowed under the HAP scheme. However, most people throughout the country are topping up or their landlords are putting pressure on them to do so. This woman's landlord told her he was going to increase the rent by €100 and he also told her that he would put it up by another €100 if she looked for repairs or any work to be done within the next year. I told her that he is not legally entitled to increase the rent again within the year even though Limerick is not in a rent pressure zone. However, most people are not aware of their rights and, even if they are, they are afraid to complain because they are afraid of losing their home.
I want to address the rent pressure zone issue in particular. Limerick, Waterford and a number of areas on the edge of the greater Dublin area are excluded. This simply is not working. It is not right that people in Limerick have no protection when last year we had one of the highest rates of increases in rents. We have gone through this many times before but it is not working in a number of ways. First, that rent pressure zones are measured in terms of the local electoral area is unfair to people in areas where rents are high but the average rent in the local electoral area is brought down due to low rents elsewhere. I do not know how to fix that except by doing what many of us in opposition have proposed by way of motion and Bills in the Dáil. We have proposed making the entire country a rent pressure zone and linking allowable rent increases to the consumer price index. This is the only way we will be fair to everyone. It is well over a year since the introduction of the legislation before Christmas 2016. I understood it was to be reviewed and it really does need to be reviewed because many people who are in very difficult situations are not in a rent pressure zone. Even for those who are in a rent pressure zone, landlords are getting around it in a variety of ways. One example is the issue around substantial renovation which is being abused by many landlords. There are also other loopholes, so I would urge the Minister to review it.
I welcome all the measures in the Bill. In particular, I welcome in the rent index proposal. Threshold has been calling for this for quite some time. There should be clarity for any new renter and the public in general as to what rents are, and this should be published by the Residential Tenancies Board. It is absolutely necessary that that happens. Security of tenure is absolutely vital and this must be balanced against rent certainty. If we just have security of tenure but do not have rent certainty, there is a danger that landlords will use one against the other. We need both. Other measures that are not contained in the Bill are also required but all of the measures in it are positive and necessary. The extension of the minimum notice period will protect many people from what would otherwise be a precarious situation.
There is no doubt that more and more people are being driven into the private rental sector and are finding it hard to get out of it. Unfortunately, the measures announced yesterday do not go anywhere near where we need to be in terms of people having affordable rent or an affordable scheme. As has been said already, a number of us attended a seminar organised by ICTU this morning. As part of the data presented to us, the Government's model of an affordable housing scheme, on which we do not have enough detail, appears to be one that simply will not work because it will be relying on the private sector to build houses and make profits and many of them will not be in the affordable category as a result. The alternative model is to use State lands, where there are more than 700 sites, most of which are in the ownership of local authorities, and to build something in the model of the Ó Cualann scheme in Poppintree, although it does not have to be that exact model.
The idea is that the local authority provides the land and the infrastructure at a low price in order to provide affordable and social housing without private profit as the motive. According to a statistic revealed to us this morning, 35% of the cost of housebuilding is taken up by the cost of land and the profit. If we could take out those factors, we could make housing affordable, even in the Dublin area, because the two things are related. There are more people in the private rented sector now who are working and are on low to middle incomes and who would like to be able to buy a house. The scheme that has been announced is comprehensive enough to address that.
There are many measures that need to be taken but tonight I want to commend this piece of legislation. I hope it will be proceeded with as it is practical and deals with some of the real problems renters have.
It was Frederick Douglass who said: "If there is no struggle, there is no progress." It is incredibly relevant for those of us who want to see action to resolve the horror of the housing crisis. We need to build a movement of all those who are affected, that is, renters facing landlords who are hiking up rents and are out of control; people who cannot afford to buy a home; those on the housing lists; and those sleeping on the streets, on couches or in cars. The movement has to demand intervention to break with the logic of the market and to build public homes. If we do not have the struggle, we will not have progress on the housing crisis and we will have more of the same.
The Minister says he will not oppose the measures but everybody knows they will not be implemented. They will pass in the Dáil tonight but will not become law because the Government is not in favour of them. We will get more self-congratulatory press releases and more meaningless plans but no action. That is why the national homeless and housing coalition protest on 7 April is so important. It is an opportunity to get tens of thousands of people out onto the streets and to start a social movement that can force progress on the issue of housing. Work has to begin now, all around the country, to get the numbers out.
The conditions facing renters are hell while those facing landlords and property investors are paradise. These conditions have been created by this Government, in particular by the landlords' party of Fine Gael, and by successive other Governments. It is reflected in renters living in expensive and precarious accommodation that is often of poor quality. In this city in particular, it is reflected in renters paying, according to a recent survey, 55% of average net income in rent, which is almost double the recommended international maximum while property investors make 7% and there has been a doubling of the amount of profit for landlords between 2010 and now.
This has been created by a reliance on the private market. The context of that is a legal framework which clearly favours landlords over tenants, but which this Bill goes some way to address, and a housing crisis which massively shifts the balance of power further in favour of landlords. Crucial in this context is the collapse in public housing. Until the 1970s, almost one in five households lived in affordable public housing but, because of the logic of privatisation over decades and stopping the building of public housing, the figure has been reduced to one in 13 households and home ownership has dropped to its lowest level since 1971 in the absence of a legal framework where the rights of tenants are protected. It is a consequence of this and previous Governments' policies which relied on the market. The key intervention and the only answer is to build public housing on a massive scale.
We support what is outlined in the Bill as it represents a modest but important increase in the rights of tenants and a shift from landlords to tenants. We would like longer notice periods for tenants who are present for a year or more and a series of other changes, including making indefinite tenancies the norm, ruling out the sale of property as a ground for terminating a tenancy and providing a requirement for a relocation allowance where a tenancy is terminated because a landlord requires a property for their own or a relative's occupation. Crucially, we need to have a referendum to create a constitutional right to housing.
I welcome this Bill because anything that strengthens tenants' rights is welcome and progressive. The rental market in Ireland is a racket. It is a racket where some unscrupulous landlords make fast profits and the Government has created the conditions for this. We can argue about the housing, rent and homelessness crisis but the Government has created the conditions for those. It has passed tax laws and given generous tax breaks to corporate landlords, who buy cheap and rent high. A REIT company bought a lot of apartments cheaply after the crash and rents them for very high prices. The rental market in Dublin is spiralling out of control and rents are 18% higher now than in 2007.
I hear horror stories on a daily basis, one of which I raised with the Minister's predecessor. Landlords are now asking for people on homeless HAP as they do not want ordinary HAP any more. With homeless HAP they get 20% more, up to €1,900 for a two or three-bedroomed house. This is absolutely outrageous. How can people afford that? These landlords should be wearing balaclavas because they are robbing people, including the Government. Until we challenge a system where people are left to the private market we will continue to have this social disaster. The Minister will utter platitudes to the effect that he will try to implement these measures but this is ideologically driven by the Minister's party. It is no coincidence that one fifth of Deputies are landlords. What does that say? It says that the Government has a vested interest in landlordism. When we got rid of the British in 1922, there were Irish landlords who were even more unscrupulous than the British and that is what we have today. We will continue to have the problem until the Government starts to challenge the system.
I am sharing time with Deputy Mick Wallace. The housing crisis is not only a problem in Dublin but it affects people in my constituency of Donegal too and the lack of social and affordable housing, rising rents and negligent landlords are features of Donegal's housing sector as well. For the first time, we are now seeing a rise in rural homelessness among people who were never at risk before. Donegal's existing high levels of deprivation mean rising rents create a toxic mix for low-income families already struggling to find and maintain work. When they cannot cope, there are few alternatives for them to avail of. There have been increases in HAP payments but market rents are increasing even faster, with most landlords refusing, point blank, to accept HAP or deal with people who are looking for HAP.
I looked at one well-known website this evening.
There is one house in the entire county of Donegal that is below the income level for a family to rent. There are 100 houses that are above the rent. It is not that the houses are not there, but the landlords will not accept the payments.
There were 19 people recorded as homeless in Donegal over the Christmas period, and 30 people were homeless every month before that. These numbers are unacceptable anywhere in this country. Responding to this I co-chaired a conference on homelessness in Donegal with Fr. Peter McVerry and others, in an attempt to provide awareness of rural homelessness. People attended in large numbers to echo our concerns, and were angry with this Government for failing to provide the most basic housing needs. Today we have an opportunity to adequately address the housing crisis by finally increasing tenant rights through Deputy Shortall's Bill. If this Government had done this in the first place we may not have been facing a housing emergency today.
My Thirty-fifth Amendment of the Constitution (Economic, Social and Cultural Rights) Bill 2016, which includes the right to housing, was twice voted down by Fianna Fáil and this Government because of their choice to consistently prioritise private sector interests over the basic needs of individuals. It is time for the Government to rights-proof decision making and bring the rights of individuals to the core of policy making, build social houses, increase tenant rights and make housing a right which the State defends. That is how this problem will be dealt with.
I too welcome the Social Democrats' Bill. According to the UN rapporteur for the right to housing, housing has been financialised and valued as a commodity rather than a place for human dwelling. It has become, for investors, a means to secure and accumulate wealth rather than a place to live in dignity, to raise a family and thrive within a community. Deprivation of the rights to adequate housing are not just programme failures or policy challenges but human rights violations of the highest order, depriving those affected of the most basic human right to dignity, security and life itself.
The housing crisis did not fall out of the sky. It was the inevitable result of the policies of successive Governments. Government policy on housing and homelessness in Ireland, when it is not actively attracting vulture capitalists and equity funds into the housing market by having fire-sales of distressed loans or giving tax breaks to the real estate investment trusts, REITs, tends to be reactive, focusing on short-term fixes such as emergency or temporary accommodation rather than prioritising sustainable long-term solutions for people in need. The measures announced yesterday fall into the very same bracket. They will do nothing to alleviate the crisis.
Despite the talk of recovery, and whatever the phrase "Republic of opportunity" means, figures compiled by Focus Ireland show that one third of Irish people worry about and-or struggle to pay their rent or mortgage every month. One in nine people is worried he or she will lose his or her home, while 6% of the population are worried about becoming homeless. Despite the Government's spin, the number of homeless persons has risen by 20% since November 2016. Rents in Dublin are now up almost 65% from their lowest point in 2010, and are 14% higher than their previous peak at the start of 2008. By contrast, the consumer price index, CPI, did not change in 2016. It fell by 0.3% in 2015, rose by 0.2% in 2014 and 0.5% in 2013. More than 80% of available rental units are too expensive for people on State housing benefits, and so the majority of rent supplement recipients are also paying top-ups to landlords. According to the Housing Agency, house prices in Ireland are moderately unaffordable. That is great; people can moderately not afford to buy houses.
The Bill before us presents a number of common sense measures to make the housing market a little fairer and to provide more protection to tenants. The call for a publicly accessible rent register is particularly welcome, as under the Residential Tenancies Act as it currently stands, there is no enforcement of the 4% rule in cases of a change of tenancy. Despite the rent caps, daft.ie figures show that rents nationwide rose by 11.8% in the first six months of 2017.
I have an issue with the 4% rate. Looking at CPI figures for 2016, 4% per annum represents eight times the increase in annual earnings for full-time employees. It is way too high. Rent caps should be linked to inflation. Setting the limit at 4% is just making it inevitable that all rents in the rent protection zone, RPZ, will rise by 4% a year; an annual rise which will gradually drive people out of their homes. Landlords are able to evict tenants if they state that they are moving a family member in or if the tenant is unable to pay an increased rent. This has been abused in recent years as a way to evict tenants and sell the property, and is one of the main causes of the rise in homelessness.
The Bill also proposes an extension of the current notice periods for termination of tenancy by landlords, along with increased fines for landlords who flout the laws. These are both very rational and welcome proposals.
With an average of 700 families living in commercial hotels and other forms of unsuitable temporary and emergency accommodation each month in Dublin, some suspect that emergency accommodation is becoming a long-term housing response. This draws an obvious parallel with the direct provision system which, as I said earlier, are nothing short of refugee camps. Some 18 years on, the Government is still pumping millions of euros every year into this temporary measure which means that some people are being forced to live there for up to ten years, and from which a number of private companies are profiting considerably.
The Government has introduced so many measures in recent years to "address" the housing crisis, but the policies are obviously not fit for purpose. What we need is more political interest in pursuing policies that prioritise the provision of affordable and secure housing to actually meet the housing needs people have. There is no rationale to the Minister's long-term approach to dealing with the housing crisis. The truth is that the Government does not really have a long-term plan. Every plan is a sticking plaster. The price of property is actually being driven up, and it is going to continue to go up because of the policies in place. The Government is doing nothing about bringing down the price of housing. Housing is not being made affordable. One of the measures brought in yesterday, where people can get mortgages through their local authorities at a cheap rate, would be great if the houses were priced at an affordable rate. The people who are not able to get a mortgage will end up as the lucky ones, because the price of houses in Ireland is too high. If one travels 25 km from the centre of any city in Europe one could buy a house for €150,000. In Ireland one would not be able to buy a place for double that.
I appreciate that many tenants are in a desperate way. Aside from the cost of rents, landlords are terminating tenancies for different reasons. Many are terminating tenancies - we have to take them at their word - so that family members can move in to the houses. In other cases, where landlords cannot meet their outgoings, the houses have to be sold. They are entitled to take back the houses, and that leaves tenants in a desperate way. Availability is the problem. I agree with Deputy Wallace that there is no face or colour to the prices that some houses are making. Happily the prices in Kerry are not as exorbitant. There are some examples, but they are not as bad as here. There are prices being mentioned here that are ridiculous.
Most landlords, 95% or more, are very genuine people who also may be in financial difficulty. They have to pay off loans and mortgages. Many of them are paying over 50% tax on what they get for the rent of their houses. That is where the problem is. We have to do something about that. It is not worth the landlords' while, and that is why the rents are being increased. Most of them are genuine people, but they have to live too. The fact is they are paying too much tax, and that is why the rents are being raised or the houses sold. That is where the trouble begins. If something was done about the tax situation of landlords, I believe it would help the tenants as well. Many landlords are not able to make ends meet. I ask the Minister to consider this, because that is where the problem lies. The 50% tax rate is very unfair.
I am grateful to have the opportunity to speak on this Bill. The proposed amendment to the Residential Tenancies Act 2004 seeks to extend the minimum notice period for a tenancy termination by a landlord, to make rent data available to tenants, and to increase the maximum value of fines applying. I am happy to support this amendment. In the current climate, tenants find it extremely difficult to source adequate accommodation within the outstanding minimum notice period. As a result of the shock and stress on a tenant getting a termination of tenancy notice, it can take several days before he or she can look for new accommodation. This amendment will help tenants get suitable accommodation within a longer period. That is necessary given the current shortage of housing. I hope also that this Bill will require tenants to show the same respect to their landlords and give them equal notice of their intention to terminate a tenancy contract. It is important that we try to protect both parties in these agreements.
I have spoken in this Chamber many times about our current housing crisis. This Bill will relieve pressure on people who fear homelessness. However, it will in no way go far enough to solve the crisis, and therefore I am pleading with the Minister to put in place some solid action. According to the 2016 census, 260,000 houses throughout the country are vacant. Common sense dictates that those houses could go a long way towards solving the immediate housing crisis. To achieve this, the building control and regulation process must be changed if we are to fast-track the utilisation of those vacant or derelict buildings.
In Dublin city alone it is estimated that there are 4,000 vacant spaces above commercial units. Those could be refurbished to provide much-needed residential dwellings. That pattern of vacant above shop units is replicated in every city, town and village.
During the discussion on housing in the talks on the formation of Government in 2016, I raised awareness of this issue and gave an example of my home town of Schull, in west Cork, where very few families live over commercial premises. That trend, which has been occurring for the past 20 years, has had a very negative impact on towns and villages. I propose that we should be encouraging families to take up residence over shops and commercial units by offering refurbishment grants.
I hope the Government will accept this amendment and take my further recommendations into account as a way to relieve the housing crisis.
I am living over the pub.
Do not be fighting over the pub. The Minister, Deputy Ross, is trying to close them. I am happy to speak on this Bill and I commend the Deputies on bringing it forward. The Bill seeks to amend the Residential Tenancies Act 2004 to extend the minimum notice period for a tenancy termination by a landlord, to make rent data available to tenants, and to increase the maximum value of fines applying. We are all only too aware of the precarious position in which many tenants find themselves. Add to that the uncertainty around the behaviour of some landlords and it is a strain that becomes almost unbearable.
I have said many times that not all landlords are bad and that the vast majority of them are fine. My concerns around a Bill of this type is that we strike the right balance between competing rights, which is very difficult to do. Wherever possible, the rights of the landlord and the rights of the tenant should not be adversarial. We must strive for that. Most of the time it is possible to negotiate a settlement and a reasonable period, but not always. In those circumstances, the tenant must have protection, especially where young families are involved. That is vital.
I am concerned about the proposal to increase the fines from €3,000 to €15,000. That is a huge jump. Being a landlord is not that lucrative a business. I would hope that the threshold for an offence would be suitably robust and that we do not have a situation emerge where landlords become terrified of seeking to remove tenants where there is a lawful and legitimate reason to do so. That aspect is very important because they must be able to have the right to remove bad tenants, and there are bad tenants and awful cases. It is not as clear-cut as we might believe.
This Bill is recognition that we find ourselves in a situation that can only be described as a national housing emergency, despite all the Minister's talk, promises and blunderbuss, which we had from Deputy Kenny as well. To the extent that it seeks to strike the right balance and protect tenants from unscrupulous behaviour, I can support the Bill. I heard Michael Walsh, the CEO of Waterford County Council, who is a very good man, being interviewed this morning. A question was put to him about the number of houses built in Waterford last year. He admitted that none had been built but they were hoping to build some this year. On countless occasions I have asked for the county managers and the housing managers to be brought here to sit down in the housing committee with us or with other people. The Minister seems to call them up for a meeting with the Department where they have a nice chat and go off for a fancy tea afterwards. Someone needs to be held accountable. Houses are not being delivered.
The Government closed all the bedsits here in Dublin. The shops are another case. Do not mind the pubs. Deputy Healy-Rae's pub is still open so we are not talking about putting anyone in there, but there are vacant premises in every street in every village and town in the country and they must be allowed to be changed into living accommodation. The Minister should do two things: bring back the life into those villages and towns and deal with the housing crisis. It is not rocket science so he needs to get his act together and get his officials in his Department to take the cobwebs out of their eyes and allow people to get accommodation.
The Green Party very much supports our colleagues in the Social Democrats on this Bill and in doing so it is standing up for people who are in the rented sector. It is not just a case of standing up for those who are currently in real difficulty in terms of homelessness and in rising rent situations lacking real powers but also standing up for what is possible in the rented sector in terms of a different view of where we could go to create an environment where people in rented property feel secure and valued.
I listened to Deputies from different parts of the country raise concerns about examples in their constituencies but no other part of the country has the same experience as what is happening in Dublin Bay South. If Dublin is already 14% above 2007 peak rental levels, in Dublin Bay South, because of what is happening with the development of the vibrant tech economy, the increases are a multiple of that.
I listened to the Taoiseach earlier and the Minister, Deputy Murphy, yesterday say that they want a rental sector and social housing, but the line comes out that home ownership is an important aspiration in the republic of opportunity. That is really where Fine Gael's heart is. In Dublin 2, 4, 6, 8, who do you appreciate? It is L-A-N-D-O-W-N-E-R-S. That is what Fine Gael stands for, and that is why we are seeing a response to this crisis rather than a change in approach. We are going back to the solution. The Taoiseach said today that the solution, ultimately, will be to build more houses and that will solve the problem. The Minister said earlier that we can see the cranes everywhere and that we are building again but we are not building different accommodation which we should be using this crisis to do.
On the provisions the Minister announced yesterday in terms of various schemes, the last one mentioned, which is the one with the least amount of money and on which there is the least detail, was the provision of a cost rental measure. We had a golden opportunity to switch to that in the past three or four years. A major report by the National Economic and Social Council, NESC, three years ago stated that this should be the solution to our problem. There are examples of how they do it in Vienna and other cities where social housing is a huge aspiration, is successful and where there is a mix of different tenants. What do we have two years into the term of this Government? We have a single pilot project with very few details and no real scale in Dún Laoghaire. The Minister said yesterday that this is a long-term solution that we may turn to some time in the future. We should be turning to it now because I believe it has various attributes that would transform completely the experience of renting accommodation in our country.
I am distraught when I see this opportunity being lost. At a time when, thankfully, we are looking to turn to public lands, what are we doing? We are selling the land because, ultimately, Fine Gael is about the ownership aspiration in the republic of opportunity. Those Orwellian terms are starting to grate slightly because we know what they mean and what they stand for. We are selling our public land to the private landowners and forever stitching us in to that aspirational private land ownership and private property ownership, and while there is nothing wrong with it, it creates an imbalance.
We have seen the Celtic tiger bubble blow up in all our faces, and the Minister is going right back to it. Instead, he should switch to supporting the innovative ways of doing the rental sector, the likes of the cost rental model where there is funding and finance ready to go, so that it does not get stuck in the Government's balance sheet and can be financed in good times and bad. Even when the budget turns downwards, we can still turn to it. Why is it, even though it is in the programme for Government, it is only now thinking of a pilot scheme when the main response is going back to lowering building standards and providing every tax break and other breaks it can for developers?
Everything is about bringing us to where Fianna Fáil had brought us ten, 15 and 20 years ago. It is incredibly frustrating to see it happening all over again while the Government fails to take this opportunity. I have the highest regard for the Minister, Deputy Eoghan Murphy, but while he has very much presented himself as a politician interested in political reform, we have heard the same thing again today about weakening local government and refusing to provide for directly-elected mayors. We are told having directly-elected mayors is too complex and will take too long and should be put back into Never Never Land. Local government is being weakened and the fundamentals of the housing market are not being reformed. There are press releases on different initiatives every day to give developers money here, money there and every possible break just like Fianna Fáil used to do. It is not reform.
I stand up for the Bill to stand up for people in the rental sector, changing the nature of which is the reform we need. Let us take those underutilised State lands and be ambitious, including in Dublin Bay South, where an Army barracks, for example, could be the centre for cost rental and a place where several thousand could live in affordable high-quality rental accommodation which would constitute the pride of places to live. As Deputy O'Sullivan said earlier, the simple maths show that if one takes out the land costs - if we can get it rather than give it to someone else - and the profits going to developers, we can use it to support a cost-rental model. With social housing, the cost is the cost of building rather than a cost which includes a fat margin. One derisks it by taking the funding from the EIB or others who are dying to get counterparties. Earlier this year, the EIB appeared before the Committee on Budgetary Oversight where its representatives were practically begging us to give them something to lend to in this country. It is all doable but instead we have gone back to the old model where it is about the private sector and getting the property numbers up and the development business going again. It is not too late to turn it around. Not all of those 700 public sites have been given away.
We should not just do a pilot scheme but should proceed with projects at scale. Let us force the Department to be bold and restore power to local government rather than to try to hold onto the rise itself and rely on the market to be its agent to make things happen. That model is bust. That model broke us. That model is not what we need to return to. We should turn instead to a rental model along with traditional social housing and sheltered housing for the range of different communities who need it, along with the private sector. We should not go back to the old ways where 80% or 90% of the market is provided for by the private sector. In Dublin Bay South, the constituency I represent, more than any other what one will end up with is an incredibly divided city. One will end up having the rich large tech companies buying every development with apartments for €600,000 or €900,000 for their executives and other accommodation for staff while local people have nowhere to stay. We will end up with the problems San Francisco and other tech cities have had where certain people are excluded from the city. That is not the Dublin I want.
We should be good at this and we can be. The current Dáil encourages and facilitates different opportunities. Private Members' Bills are getting through, which suggests things can be done differently. It is a really healthy stage in our democracy. The Government is accepting the Bill. I say "Fine, but follow that up". The Government should come back here with six projects for cost rental before the Bill is on Committee Stage so that we know it is serious and we know the scale at which things are being done differently. If the Government does not have the land base, it should ask the people in the House where we think we could lose public lands. I could come straight back to the Government with suggestions that would provide houses in the centre of the city so that we do not have the traffic gridlock being caused by going to the old model whereby the city continues to sprawl. We just build more and more roads and get more and more cars onto them. Everything is gridlocked. It is not working and it will not work in future. The Government must change its ways which is why I support the Bill.
I welcome the opportunity to say a few words on the Bill. We have discussed the rental sector here a great deal along with housing in general over the last number of years. It is clear that the rental sector must be a more attractive choice for tenants and a safe and viable investment choice for investors. It is the balance we are trying to get right at all times. As Deputy Cowen noted earlier, 70% of landlords are not major investors. They are people who own an additional property for whatever reason and they are not investment companies. It is not all big companies and there is a mix of tenants out there. However, we want a more professional landlord base if possible which is in the market to provide a service in the way that is done in other countries. We are trying to create a rental market which attracts investment but which also gets the balance right with costs, security and the service. That is the balance we have been trying to achieve for the last number of years. That is our agenda and it is similar to the agenda of Deputy Shortall. She wants to focus on the rights of tenants, the cost of rent and security of tenure, but I believe she recognises that we also have to make it attractive for people to invest.
Tenants who are renting need to have certainty that as long as they pay their rent and meet their obligations, they will be able to stay in the properties they are renting. Equally, landlords and investors, from the individual wishing to secure a home to institutional investors seeking to build balanced investment portfolios, must have confidence in the long-term value for their investments and the income they can derive from them. It is not true to say that supply and demand cannot interact to give cheaper rents. There are lots of places where even four years ago there was lots of supply of empty housing and rent was half of what it is today. It has been forced up for different reasons. I listened to people contributing to a conference today claim that supply has nothing to do with it. That is not true. While I know there are lots of aspects to it, please do not try to tell me that supply does not come into it. Anyone who has studied economics knows without a doubt that supply comes into it. To hear so-called "experts" discuss today that supply is not an issue suggests they need to think twice. We recognise that there are a lot of factors, but it is beyond doubt that increasing supply is a major way to bring down the cost of rent and of housing, albeit the cost of a house is a slightly different story.
As the Minister, Deputy Murphy, outlined in his speech earlier, any legal changes cannot risk weakening the stability of and confidence in the rental sector. No new law should undermine the economic viability of providing rental accommodation or impact negatively on existing and future supply of residential rental units. That does not mean we should not introduce new laws; it means we have to tread carefully and get that balance right. There are knock-on effects on the wider economy to consider also. We need rents to be affordable, but they must also be viable and encourage long-term investors. I disagree with Deputy Ryan. We recognise in the Rebuilding Ireland document that a large proportion of people choose to rent as it provides a great deal more flexibility in circumstances where they like to move around a great deal more in their work. Our planners recognise that which is why we have issued guidelines to local authorities for the build-to-rent concept. There is a greater chunk of people who decide to rent and we want to provide for that. As such, I ask the Deputy not to put us in a box and say we are against the rental market and do not want to give people the option. We believe in that.
There are knock-on effects for the wider economy to be considered. While we need rents to be affordable, they should also be viable. Any new measure should be fair and capable of withstanding legal challenge, including a constitutional challenge. When we were working on the rental sector strategy last year, we had to be very careful to ensure that any changes we brought in would stand the test of time and the test of the courts system. There is no point bringing in new laws if they are then defeated in a constitutional challenge. That is why we tread very carefully when we make changes in this sector. Any change we make is well informed. A great deal of work went into last year's rental strategy and a lot of people from all parties in the House made submissions. We teased them through and spent a lot of time on it before making changes. We are prepared to review that and the Minister, Deputy Murphy, will bring forward legislation in the near future to make more adjustments which make the strategy more effective.
We all accept that there are acute pressures in the rental market, which are driven by a number of factors, including rising demand as a result of the economic recovery, a lack of supply and the high cost highly-indebted landlords face in servicing their loans. There is no point in denying that landlords want to make profits, which also contributes to high rents. However, there are a lot of landlords who do not make profits and who barely cover their costs. Deputy Danny Healy-Rae discussed that earlier because there are high tax implications. On the other hand, some make great profits. I am not trying to say that is not the case. The lack of supply, however, is also a major contributing factor because there is significant demand. These factors have led to significant rental price inflation in recent years. However, the long-term solution for the high level of rent is to increase supply. The strategy for the rental sector from 2016 contains a number of specific measures to encourage and accelerate new supply, keep existing rental units in the market and bring vacant units back into use. Deputy Healy-Rae also raised the issue of taxation not only on profits from rental income but on rental income itself.
It is something that was raised with us while working on the rental strategy in autumn 2016, as were all the other implications of it. There was a commitment in the rental strategy to set up a working group chaired by the Department of Finance to examine the tax and fiscal treatments of landlords. This group, which was chaired by the Department of Finance and included officials from my Department, the RTB and the Revenue Commissioners, examined the tax treatment of landlords or residential accommodation providers and having due regard to their critical role in a properly functioning rental market put forward policy options in its report, including proposals to amend their tax treatment because some people say it is unfair. It is about getting the balance right.
A public consultation was conducted in March and April 2017 to seek views on a number of subjects such as the mortgage interest relief, the capital repayment relief, rental accommodation as a pension investment, the deductibility of various expenses, capital gains tax, long-term tenancies, accidental landlords, the rent-a-room scheme and vacant properties. All of that has been analysed in detail by that working group and the Department. About 70 written submissions were received - I expected there to be more - from a wide range of interested parties, including individual landlords, representative bodies and charitable organisations, and were considered and finalised in the Government's report which fed into budget 2018 considerations and will feed into budget considerations in the future as well. That report is now available. It is a valuable source of information which tries to review this through the eyes of the various stakeholders and to tease it out. There are some parts that are feasible and which merit further consideration. If people get an opportunity they should read through that document. We will have an opportunity to discuss it because we are bringing forward this Bill and others in the months ahead. We have to bear that in mind. It is not all rosy in the garden for every landlord. While I accept some make great profits, not all do.
When it comes to rent predictability and certainty, we need to ensure our rent certainty measures work and do not undermine our efforts to get rental supply. We need to monitor the effectiveness of our rent predictability measures, and the public consultation and the review carried out last year as part of this work are very important. That review started in summer 2017. Implementing change through the Government's upcoming Bill to amend the Residential Tenancies Act is the next step and in our view it is an important one. We recognise we need to do more in this area. The Government has given this Bill priority for early publication during its current Oireachtas term. We will all have an opportunity to take part in that discussion and to frame it through the committee and on the floor of the House.
The Government's rent predictability measure is carefully designed to control rent increases without having negative effects on the supply of rental accommodation. That is the balance we are trying to achieve. Its implementation can and will be enhanced and it limits rent increases to a maximum of 4% per annum. We want that to happen. There are all sorts of different stories out there and the reason we commissioned the report and the review was to gather that evidence. Tenants should see significantly smaller rent rises than those prior to its introduction or than would have taken place if the measures had not been introduced. This has to happen and we want it to happen. The law will be changed to ensure the rent pressure zone controls are effective and enforced. There are different reports out there and different information coming through the system. The measure can and should have a substantial impact. The practical effect of the measure is that the rents of the more than 180,000 households that currently rent their homes in rent pressure zone should be lower than they would have been if market rents had continued to apply. That is in most cases.
We are aiming to bring about a new market rent that will change in a predictable manner with a known maximum annual rent increase and to achieve in time one that is much more affordable. We all agree that some of the figures being quoted here tonight are not accessible to most people and are putting them under extreme financial pressure.
In terms of enforcement of the 4% cap in rent pressure zones there is a statutory obligation on a landlord at the beginning of a tenancy to provide a tenant with details of the previous rent under a tenancy and a statement of how the rent has been calculated under section 19(4) so that a tenant can ensure his or her rent complies with the legislation. A similar provision applies when a landlord is serving notice in the context of a rent review. The tenant is informed how the rent is calculated having regard to the rent predictability measure and whether the landlord is claiming that any exemptions apply.
The RTB published a comprehensive set of guidelines in November 2017 for landlords and tenants and those working in the rental sector clarifying the situations in which a landlord can claim substantial change in rented properties for the purposes of exemption from the rent increase restriction of 4% that applies in rent pressure zones. The RTB also has an easily accessible online rent calculator which both tenants and landlord can use to check their rent is in line with the legislation. The calculator can also be used by landlords to produce the rent notice required. If a tenant believes the rent is above the market rent or above the permitted increase in the rent pressure zone he or she can refer a dispute to the RTB. The rent cannot be increased pending the determination of that dispute. I heard Members say earlier that most people would be reluctant to engage in that process or do not want to for fear of losing the property. That is something we are trying to deal with through the review because we acknowledge that might happen in some cases. We are trying to strengthen that position. The RTB has significantly developed its methodology for producing its quarterly rent index in this report as a result of close co-operation between the RTB and the ESRI, one that gives a significantly more detailed understanding of market behaviour in the rental sector.
I am conscious of time so I will finish up. The new methodology and the substantial database collected and maintained by the RTB means the rent index continues to be by far the most accurate and authoritative report of its kind on the residential rental sector in Ireland. It is the one on which we will base our policy changes. That is the information gathered and the detailed answers with which we have been provided.
I thank everybody who attended the debate and those who contributed and pledged their strong support. I was glad to note that support was unanimous on this side of the House. I am, however, disappointment with the response from Government. Not opposing does not amount to the same thing as supporting. The response of the Government generally has been mealy-mouthed and disappointing in so far as these are measures that could be implemented very quickly and could make a real difference to people's lives. Unfortunately, the Minister of State has not given a commitment to see this Bill through to the end.
The Bill is essentially about doing three very straightforward things which would help tenants. First, it is about extending the notice period. This has been recommended by the DKM-ESRI report to which the Minister of State alluded. The Government went with the extension of the notice periods only in the case of tenancies in excess of five years. There is a very real problem with shorter term tenancies where people have been in a tenancy for only one, two or three years. In those circumstances their situations are very precarious. They live with the danger and threat of their landlord deciding he or she will sell the property or claim he or she will move somebody in, very often in an attempt to get a higher rent. That is what the housing agencies are saying. One of the main routes into homelessness is when tenants are told by their landlords they have to get out for one of those exempted reasons. The measure in this Bill, which would give them some breathing space and a reasonable amount of time to find alternative accommodation in the present difficult situation, is a fair proposal and something to which the Government should be committed. It would undoubtedly stem the flow of people into homelessness.
The second provision is to give tenants a right to access details of rents and the rent paid by their predecessors in the accommodation. The Minister, Deputy Murphy, talked about the success of the rent pressure zones. That is a very questionable statement to make. In the Dublin area, where there are rent pressure zones, rent increased by 10% last year. In Cork, where there are rent pressure zones, it increased by 11%. How else does one explain those excessive increases except to say there was clear abuse of the system and that there were many situations where tenants were evicted and new tenants brought in, with the landlord hiking up the rent? That is the only explanation for those huge increases. It is cold comfort to tenants to hear the Minister say a tenant who is evicted and is going into a new property can always look at the general rents in the area. That has nothing to do with it. It is about looking at how they can establish their own rights in terms of ensuring the landlord is not hiking up the rent and is obeying the law. There is no way of checking that at the moment and that is why it is essential the register to be held by the RTB is accessible to new tenants to ensure there is no rent gouging. The huge suspicion is that it is widespread.
The third provision is to introduce stiffer penalties and higher fines for landlords who breach the legislation. We know this is going on.
The penalties there at the moment are derisory. A maximum fine of €4,000 represents approximately two months rent in the Dublin area, or even less than that. A landlord can take that hit if, in return, he is in a position to hike up the next tenant's rent by 10%. That is what is happening now. We are saying that there is a need to strengthen the penalties there to increase the maximum fine for breaches of the law and that that would act as a significant deterrent to landlords who unfortunately do not respect the law as it stands.
There are three very straightforward measures. Nobody is suggesting that it is a silver bullet to deal with a wide range of issues affecting the rental sector. We all accept that there is an urgency about addressing things such as the exemption for selling a house. That does not apply in other countries where, if a landlord decides to sell, the tenant has security of tenure and the house can be sold while the tenancy remains. There are many other things such as measures to safeguard the tenants themselves but also ensure that tenants take their responsibilities as tenants seriously. We must accept that. There is an issue in the case of a small number of tenants who do not abide by the law, or pay their rent on time and who do not maintain their properties. That must also be dealt with but we need balance. We also need to have an efficient and timely dispute resolution system which is adequately resourced, which we do not have now. In the private rental sector, as in so many other aspects of Irish life, a body is in place and there are theoretical rules and regulations but unless we resource the regulatory body properly and enable it to do its job, it will be a watchdog without teeth. That is the problem and it is how it is with the RTB now.
I heard the Minister's comments on Morning Ireland when he was asked if he would be supporting this Bill. He talked some nonsense, saying that one could not have a situation where a tenant who was in a property for three days and had not paid a deposit or rent would be entitled to notice of 90 days. It was beneath the Minister to make such a comment. It was very wrong of him to do so because it does not apply. Who would have a tenant in their property without having paid a deposit or rent? It is a complete red herring and it was quite disingenuous of the Minister. This Bill is about proper law abiding tenants who are in properties to ensure that they are given a fair amount of time to find alternative accommodation so that we can help to avoid more and more families being driven into homelessness. That is what it is about.
I was very struck by the amount of emphasis that the Minister of State put on the rights of landlords in his contribution. He spoke about stability and confidence. Tenants also have a right to stability and should have a right to security and to believe and be confident that if they obey the rules and pay their rent that they will have security in their own home. Unfortunately that is not the situation now. We all accept that we need to introduce many different measures. The Minister has promised various measures will be taken. There have been many promises about housing from this Government and the last and we are still waiting for many of them to be implemented. We will not hold our breath for the raft of promises which the Minister has made but in the meantime, these are measures which would make a real and substantial difference to the lives of many people who are now in shorter-term tenancies. It would give them some protection and security. These measures could be introduced very quickly. The first and third measures could be introduced by the stroke of a pen. I do not see any reason, if there is majority support in the House for these measures, we cannot move ahead and progress this legislation.
I ask the Minister of State to be more generous in his approach and more practical because that is what this legislation is about, and to reconsider whether he will give his wholehearted support to protecting tenants in this vulnerable situation and to stemming the flow of homelessness. It is in his hands. It is also in the hands of the Opposition given that a majority of those here this evening have pledged their support for this legislation. For that reason, it must be progressed.
Question put and agreed to.