Dáil Éireann debate -
Friday, 21 Nov 2003

Vol. 575 No. 2

Residential Tenancies Bill 2003: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. B. Smith:

I am glad to have the opportunity to contribute to the debate on this important legislation. I compliment the Minister of State with responsibility for housing and urban renewal, Deputy Noel Ahern, and his colleague in the Department, the Minister for the Environment, Heritage and Local Government, Deputy Cullen, on bringing forward this important legislation which is long overdue.

The Bill is comprehensive, progressive and well balanced. It contains the appropriate balance between the needs of those providing rented accommodation and those who are renting such accommodation. The Bill provides a fair deal for all. It does not place unreasonable demands on landlords and it provides the basis for a fair deal for all tenants. This legislation can help to stabilise the entire rented sector which has not had stability in the past. The expansion of housing needs will continue to generate the need for more investment from the private sector and such investment expanding the housing supply will be very welcome.

The Bill outlines in a proper way the minimum legal obligations of both landlords and tenants and incorporates the necessary measures to improve security of tenure. It also limits rent to market level and annual reviews at the most.

The legislation provides for the establishment of a Private Residential Tenancies Board and a new tenancy registration system. This will provide for a proper statutory dispute resolution service which can be effective. I welcome the statement in the Minister of State's contribution that the board will be in a position to review the effectiveness and the operation of the legislation. I hope that the mediation and arbitration approach, which is the basis for the workings of the board, will be satisfactory and will enable the effective and speedy resolution of disputes that may arise.

I recently attended a function of the Cavan Association in London and I was asked to raise with the Minister of State, Deputy Ahern, in particular the needs of some of our emigrants who are living in poor circumstances throughout Britain and in North America. Some local authorities have begun a process of providing housing accommodation for some emigrants who may wish to return to their native counties. My local authority is embarking on such a programme. Under the substantial local authority housing programme the Minister put in place over the past two years and which will be ongoing in 2004, I hope he will direct local authorities to provide some of that new housing stock for emigrants who may wish to return. We all know, particularly those of us who come from rural constituencies which were devastated by emigration in the 1950s, 1960s and in later years, that many of those people left these shores in difficult times. Many of them contributed handsomely to this country by sending home money to ensure that their younger siblings could be reared. They helped in a positive manner to ensure that some families had at least a basic and minimum standard of living.

In his capacity as Minister of State with responsibility for housing, will he arrange for his Department to co-ordinate a programme throughout all local authorities, particularly those in rural areas, to ensure that progress is made in putting housing at the disposal of emigrants who may wish to return home? I hope the Minister will meet representatives of some of the voluntary associations in London and elsewhere which are trying to co-ordinate such a programme and that work on it can be speeded up and driven by him and his Department.

In recent years there has been a welcome increase in the supply of housing. We all know there has been great pressure in terms of housing supply and in recent years the quality of local authority housing has improved dramatically. A person can drive into a local authority housing estate today and note the high standard of design. Such houses are probably of a better quality than the houses in private estates. As Deputy Johnny Brady said last night, great credit is due to the former Minister for the Environment and Local Government, Deputy Dempsey, and the Ministers of State at that Department for their progress in ensuring substantial funding was made available to local authorities to provide the largest ever housing construction programme, houses that are of an exceptionally high standard, both of design and quality of construction. I am aware the Minister has obtained substantial funding for 2004 to ensure that this house construction programme continues.

For far too long the rights of tenants, particularly of houses, were practically non-existent. Fortunately, in recent years we have had very welcome advances in consumer rights, but the rights of tenants have lagged behind. The Bill address these deficiencies. Huge profits can be made from property and the tenants who generate these profits are fully deserving of their rights as consumers. The Bill provides for a more professional approach in the rental market, which is good for tenants and for the long-term stability of the sector, particularly for those who are able to supply such property. It will mean enhanced property standards and improved management and it will ensure an increase in the supply and quality of accommodation.

A person should have a genuine sense of home in the place where he or she lives, regardless of whether it is rented or purchased. For far too long Ireland has adopted a Victorian approach to property rights. The system was weighed heavily in favour of the landlord. Tenants had to clock up 21 years in a property before they gained security of tenure. As a consequence of tenants having few rights and no security, Ireland has been out of sync with the rest of Europe. Across Europe renting is seen as a real option for the medium to long-term. An effective and law-based rental sector must be part of our modern economy, where there is more mobility.

I support the comments of Threshold, the national housing organisation, which has broadly welcomed the measured proposed by the Bill. The legal rights of the tenant and the landlord will now derive from law as well as from any written or verbal tenancy agreement between tenant and landlord. A tenant will be entitled to quiet and peaceful enjoyment of his or her home. The landlord will only be allowed to enter with the permission of the tenant, which is right, and if he or she needs to carry out repairs or inspect the premises it will have to be by prior arrangement. If a property is put up for sale the landlord will be obliged to agree viewing times with the tenant. These are practical measures which are being put into legislation. Most reasonable landlords will have always lived up to those standards anyway.

We all know that, unfortunately, as well as bad landlords, there are troublesome tenants. Deputy Killeen referred last night to the major problem of anti-social behaviour, which occurs in many towns throughout the country. It is a problem that local authorities find difficult to come to terms with and eliminate. There are no easy solutions to this vexed question. This behaviour can destroy many lives in what would normally be quiet estates.

The system up to now has weighed heavily in favour of landlords. I do not know whether it was the Minister for the Environment, Heritage and Local Government, Deputy Cullen, or the Minister of State, Deputy Noel Ahern, who stated that this legislation marked the most effective overhaul ever of tenants' rights. He referred to the days of the land wars and struggle for tenants' rights led by Michael Davitt and others. It is ironic that the rights of tenants on land, which were well established more than 100 years ago, have never been properly established in law for housing. This Bill rights that wrong.

The Bill was drafted after widespread consultation by the Department and the Minister. I do not see how any sector, whether landlords, property owners or tenants' rights advocates, could be unhappy with it. I welcome the Minister's statement that he will review and take into account submissions or recommendations from the tenancy board on the effectiveness and operation of the Bill. He has indicated that he has an open mind towards amendments which may improve the legislation. This is flagship legislation, which is long overdue and particularly important for a sector in which, unfortunately, basic standards have been lacking in the past. In recent years the standards of rented accommodation have improved dramatically, driven by the numbers of investors going into the market and the consequent increase in the amount of accommodation available. I commend the Minister and his Department for introducing this important and innovative legislation.

Mr. Durkan:

I am delighted to have an opportunity to say a few words on this Bill. I am sorry to see that Deputy Johnny Brady is about to leave the House because I wanted to exchange a few pleasantries with him—

Mr. Dennehy:

He is only moving over here.

Mr. Durkan:

—arising from his contribution last night. The history we were dealing with is very pertinent to this Bill. In 1977 the party which all the Deputies over there love and adore vowed to abolish rates and car tax.

Mr. J. Brady:

The Deputy's party started it.

Mr. Durkan:

That was a very progressive move. Deputy Brady asked me whether we would bring them back. There is no need – Fianna Fáil has already brought them back through a thousand different measures. Every day the Government brings in some replacement charge for something it does not provide. It has simply decided that in some amorphous area it must squeeze out of the luckless population money they do not have for something they will not receive. The emergence of the Bill at this time is of historical significance. The fact that we are back to discussing landlords and tenants, as the previous speaker recognised, is significant in itself. The fact that after 100 years or more we must again identify the rights of tenants is an indication of where we have gone in the past five or six years.

Twenty years ago everyone had the aspiration of owning a home of his or her own. It was the aspiration of every young person, every one of the new generation, but it is no longer the case. Now the younger generation can only view photographs of other people's houses because they will never own their own. We have gone back almost to the days of the workhouse. Local authorities are readily referring whole families to emergency accommodation and hostels – sometimes they must even sleep in the open air. The Minister of the day does not even know how many people are sleeping rough in this capital city.

Mr. N. Ahern:

He knows. The Deputy should not worry about it.

Mr. Durkan:

If he does not know how many people are homeless in this city I would hate to ask him about the real housing problem throughout the country.

Mr. B. Smith:

The Deputy is trying to misrepresent the Minister. It is ludicrous.

Mr. Durkan:

With every passing day things are getting worse. What do we do?

Mr. B. Smith:

The Deputy should go out and live in the real world.

Mr. Durkan:

Is an avalanche of houses being provided by this caring Government? No, we get a Residential Tenancies Bill, which will salve the wounds and the hurt of the people.

Mr. B. Smith:

Does the Deputy think tenants should not have rights?

Mr. Durkan:

I am afraid the people will not buy that. The fact that there are so many tenants now—

Mr. B. Smith:

Does the Deputy represent the views of tenants?

Mr. Durkan:

—is clearly an indication of the abject failure of Government.

An Ceann Comhairle:

Please allow Deputy Durkan to continue without interruption. If Deputy Durkan addressed his remarks through the Chair he might not invite interruption.

Mr. Dennehy:

That would be a sad day, a Cheann Comhairle.

Mr. Durkan:

I agree, a Cheann Comhairle. I am trying to address my remarks to you, but I would not like you to be offended or take them personally because they are not meant for you. They are going, through you, to that crowd over there. I would not like to offend the Ceann Comhairle. I am not saying this with the Chair in mind, it is directed through the Chair to the amorphous mass on the benches opposite.

An Ceann Comhairle:

The Deputy would invite fewer interruptions if he addressed his remarks to me.

Mr. Durkan:

Those on the benches opposite have done nothing for the unfortunate people of this country. They have attempted to get away with this and now they are attempting to get away with it again.

Mr. B. Smith:

More than 62,000 new homes have been built.

Mr. Durkan:

The Minister of State has said publicly that if the number of homeless people had not been so carefully counted there would not be so many of them.

Mr. N. Ahern:

I did not say that.

Mr. Durkan:

How in God's name are we ever going to solve a housing problem in this country if this is the way we are going about it?

Mr. B. Smith:

The Deputy should stop misrepresenting the Minister of State.

Mr. Durkan:

Of course, it would be much better if we did not count them as we could ignore their existence and no one would talk about them. It is worse than that.

Mr. B. Smith:

The Deputy's comments are pathetic.

Mr. Durkan:

When I hear backbenchers praising the Minister for the Environment, Heritage and Local Government—

Mr. N. Ahern:

A great man.

Mr. Durkan:

—I have to ask myself what country I have been living in for the past five years. I have tabled countless questions to both the current and previous Ministers asking what the Government intended to do about the housing crisis. I was told again and again that there was no crisis. The Government is like an ostrich that buries its head in the sand. If the Government continues like this the Ceann Comhairle will have to come to its rescue. It is leaving itself invitingly open to getting a sharp response from the electorate.

The House does not fully recognises the severity of the housing situation. Everyone knows there is a serious housing problem, as evidenced by the number of people on local authority housing lists and those in need of affordable housing. Instead of doing something about it, the Government decided to count them once again to make sure that some of those on the lists were not given a house by accident, had not won one on a television or radio programme or miraculously secured one by other means. It took a year and a half to count them and when this was done, the Government decided to look at it once again and produce more statistics. Now we must deal with the Bill before the House. I am saddened that we have come to this juncture.

I listened with great interest to the submissions from the other side of the House. Many years ago I saw graffiti on the promenade in the exclusive confines of Dún Laoghaire. The slogan read, "Vote Fianna Fáil, the party that made meat luxury". This could be added to today and could read, "Vote Fianna Fáil, the party that made housing unattainable". While I am not sure whether the same scribe is still around, I am sure he would not mind me adding that to his work.

Ms F. O'Malley

Is the Deputy advocating painting graffiti on Dún Laoghaire pier?

Mr. Durkan:

I will discuss that again. The legacy of the Government is one of failure. It is a failure to recognise the needs of those who wish to be housed or even accept that a problem exists.

It would be remiss of the House not to point out the problems that loom for these families. The policy has been anti-family. Young people cannot get married or enter into permanent relationships because they have nowhere to live. They are at the mercy of the housing market, a notional concept that is supposed to provide something when the Government fails to do so. While the voluntary agencies are doing their best, it is not their responsibility – it is the responsibility of Government to ensure that adequate housing exists to meet the needs of the people. If one looks at some of the election manifestos that have been touted over the past ten years, one will find plenty of references to meeting housing needs but no cases where the housing need has been met.

The response of the Government has been appalling and is highly unlikely to improve because the whole culture has been changed. We now have the emergence of new thinking where the rented accommodation is regarded as being much sought after. I have even heard this being touted as a positive thing. It is much sought after because living on the side of the road is the alternative. There are people living on the streets of this city. There are people in the province of Leinster who have to live in the open air. I have had to deal with one or two cases where young mothers and their babies have lived in the open air. It is extraordinary that this could have happened on the back of the Celtic tiger. Before now, I have never known it to happen in all my time in this House.

The duplex house is the most recent innovation to have been discovered. It is of no benefit to the tenant or person seeking a home, yet I have heard it being touted as the answer to Ireland's prayer. A duplex house is one house planted on top of another where there are outdoor stairways like those one would have seen leading to a grain loft in the old days. I hope this type of housing will be banned because that would eliminate the need for me to deal with the mothers of small children who visit my clinics to complain of injuries incurred by slipping on ice or being buffeted by the wind on the outdoor stairs. Such homes are entirely inconsistent with rural Ireland. Ireland is the least densely populated country in Europe and it must be asked why we would use such houses to solve our housing problems. If the Minister of State intends to do something for the people he should discontinue the construction of duplex housing. He should not presume that because we are from the country we do not understand such things. We are fully aware of them and know the effect they have.

I do not see how the Bill will benefit those who cannot get affordable housing. While there have been people who have qualified for shared ownership or annuity loans over the past five years, the loan is often inadequate to buy a house and they remain on the list. When the possibility of an affordable house becomes available, the local authority assesses their income again to see if they can cut them off. It is a cynical exercise. The person may have qualified for a loan and then gone out and worked hard to earn more money to gather a deposit or do other things to achieve a home. Then the local authority changes the goalposts by lowering the income limits and disqualifies the person.

While a number of issues need to be dealt with as a matter of urgency, the Bill is the ultimate in cosmetic surgery and has nothing to do with meeting housing needs. Unfortunately, this illustrates the serious problem of the ever-increasing growth of rented property. I refute the assertion that tenancy is the answer to our housing problems. Tenancy gives more power to big brother because the tenant must always be on the move. Tenancy has been put forward as a more economic means of housing people, but it is not. In my constituency the rent on an ordinary one-bedroom flat has risen to €800 per month in the past six years. That is the effect of the market. Other rental properties cost between €1,400 and €1,500 per month and the rent on some houses is €2,000 per month and more. Not all landlords are greedy. The majority are very good, have a conscience and take account of tenants' needs but the amount of high rent abuse is appalling.

The margin on which the householder has to live is tiny when one takes into account the rent and the series of charges, including refuse charges, imposed by Government. I accept that these charges have to be made but the extent to which they are made and accelerated causes a problem.

The Government recently discovered another means of hammering the poor unfortunate people who need a house. It is the development levy. There have always been development levies for water, sanitary services, roads and other services which councils might or might not provide to facilitate future development. In more recent times this levy has increased by multiples of five or six so that in some cases a home, either in town or country, is likely to incur a levy of €25,000 or €30,000. This is Government policy as enunciated through the local authorities and put into operation by them.

How does the Government expect people to live or have a home of their own? It is obviously Government policy to ensure that they can never do so. At present it is estimated that a €300,000 house, of which there are not many, will incur a levy of €95,000 when one takes account of VAT, stamp duty and anything else the Government likes to take. The Government takes almost one third of the value of the house. This does not take account of the new levies, which will increase the Government's share even further.

Is the Minister of State shaking his head in disbelief? If so, he should speak to his party colleagues, who must have heard about the new development levies and the impact they will have on housing requirements.

Mr. N. Ahern:

That is ridiculous. I have given up listening to the Deputy.

Mr. Durkan:

This Bill has many beneficial aspects for tenants and landlords. One could hardly introduce legislation which would have the reverse effect. However, the sad fact is that it has been found necessary to introduce this legislation. Notwithstanding the merit of some elements of the Bill, it underlines the total abdication by Government of the housing area and the fact that Government is oblivious to the needs of the population, about 100,000 of whom the Government neither knows nor cares about. The Bill emphasises that future Government policy will be to ensure that we do not have a settled population to the same extent as in the past, that we have a more mobile population which can be moved around. This was the policy of the communists in the years following the Second World War when they pushed people into high-rise tower blocks whether they liked it and kept them there where they would be under state control. People lived in rented developments, they did not own their houses, would never own them and could never aspire to owning them. Their only salvation was to go to the Gulag.

I hope the Department of the Environment, Heritage and Local Government will soon be visited by someone who will recognise the real housing needs of people and that we will move away from the present situation where housing is an unattainable luxury and the Government has no interest in doing anything about the matter.

Mr. Dennehy:

Deputy Durkan upset me so much that I could hardly stop laughing in time to begin my speech. I usually avoid the temptation to respond to him and concentrate on the matter in hand.

Mr. Durkan:

I am here, I am ready.

Mr. Dennehy:

In this case I must put one or two facts on record. In harking back to 1977 Deputy Durkan opened the historical debate.

Mr. Durkan:

Yes.

Mr. Dennehy:

He then told us that the landlord and tenant issue has been lying around for more than 100 years and has not been dealt with. He shouted at me and my colleagues, two of whom responded to him.

The one thing we do not have in common is that the three Members on this side of the House never served as Ministers or Ministers of State. Deputy Durkan sat on his hands in his office for three or four years. He had direct responsibility for improving the situation which he says has existed for 100 years but he did nothing.

Mr. Durkan:

Wrong Department, wrong again.

Mr. Dennehy:

It is easy to criticise people. With his scattergun approach, he then moved his aim between the communist party and Fianna Fáil.

Mr. Durkan:

They are the same thing.

Mr. Dennehy:

His bitterness was clear in every utterance. He acknowledged that the Bill contained some welcome aspects but immediately moved to compare the situation in Ireland with communist countries following the Second World War. His bitterness was so evident that he could not deal with the item before us.

He claimed that people cannot hope to own a home of their own. In 1993, 22,000 new houses were built. In 2004, the ESB figure for connections to new dwellings will be 66,000. The corresponding figure for 2003 is 62,000. These figures give the lie to what Deputy Durkan has said.

His bitterness against this side of the House is so great that he could not join his colleagues in welcoming the Bill, as every speaker did unreservedly. Some speakers raised points they wished to debate and mentioned criticisms by interest groups, both owners and occupiers, and by organisations such as Threshold, but he could not welcome the Bill. He even attacked the Minister and said he hoped someone in the Department would recognise the real needs of people and deal with them. The Minister of State, Deputy Noel Ahern, with his huge knowledge of inner-city difficulties and his experience of dealing with them is probably the best qualified person to be responsible for housing and urban renewal.

I compliment the Minister of State on introducing the Bill. He deserves credit, primarily because so many others have avoided this issue. Reasons have been given over many years for not dealing with it. Simple ones that spring to mind include the enshrining of the right to own property in the Constitution and the fear of tampering, which was always offered as a reason for not acting. There were many other issues involved, such as the commercial one, which led to the driving of people out of the rented market. The Minister of State has taken on these issues and has made a very good shot at rectifying the problems that exist by putting in place rules and regulations. The latter are badly needed because all the other problems associated with the difficulties and abuses of existing schemes have arisen due to the lack of regulation and control.

It is correct to state that this is the first major Bill to deal with residential tenancies since the foundation of the State and probably long before that. It deals with many of the issues house owners and tenants will face, as well as many of the issues raised by representative groups such as Threshold, to which all speakers have referred, probably because it lobbied us all. It also deals with the concerns of many other smaller interest groups who try to care for the less well-off and who need accommodation. The questions of security of tenure and rent review must also be considered and regulations and guidelines have to be made to address them. These matters have been avoided for far too long.

The Minister had to cross departmental lines when drafting the Bill. I am glad that he took the advice of the Attorney General when doing so because the last thing I want is legal challenges. These were threatened or referred to on occasions in the past year or two.

It is important to point out that the Bill benefits both landlords and tenants. There are great benefits to those who provide rented accommodation and this is how it should be. People on all sides should get a fair deal. There is a tendency to take an extreme view in favour of one side or the other. Some refer to all landlords as money-grabbers, rackrenters, etc. Deputy Durkan stated they are trying to bleed the tenants of their last euro. However, the survey carried out in Dublin showed that 61% of all rented accommodation was owned by landlords with a single dwelling for rent. Of course there are landlords with many properties, but this statistic must be acknowledged. The landlords deserve the same respect and State protection as anybody else providing a service. I will refer later to some of the abuses that have taken place on both sides.

Another extreme view is that all tenants are careless, negligent and do not want to pay their rent. This is incorrect. We need to realise the importance of the rented sector. It plays a massive role without which we could not cope. It is important, therefore, that we take a fair and balanced approach to it. Too often an extreme view is taken, which is of no help to anyone.

Unlike other European countries, there has been a reluctance to recognise the need for rented accommodation in Ireland. This may be because of something in our psyche or because of our 800 years of occupation. There is some snobbery involved because in certain social groups one is asked if one is renting or purchasing. A view obtains that if one does not own one's own house, one is not of equal status to some others. This is rubbish. We should accept that there is a need for rented accommodation and help in every way possible in this respect. In Cork city, for example, there is a huge demand for rented accommodation on the part of a transient population linked to University College Cork, the Cork Institute of Technology, the major teaching hospitals, such as Cork University Hospital, and other facilities. We must meet this demand and do so in a proper fashion.

I do not like to see whole streets taken over simply for rental purposes. Sometimes this can lead to a ragged look, especially if landlords have not maintained their properties to a high standard. I hope this will be tackled in the Bill. The State and the private sector must make a joint effort to meet the needs that exist.

One difficulty in dealing with the residential tenancies issue arises because of the changing economic climate, particularly over the lifetime of this Government and its predecessor. It is a fact that up to the mid-1990s, we exported up to 40,000 people per year. We found proof of this at the Committee of Public Accounts yesterday when we dealt with the issue of the pre-1953 insurance stamps. Of the claims that were made – there were ten times more than expected – 50% were from the United Kingdom and only 33% were from this country. We effectively exported 67% of the claimants at one time or another. The trend was reversed in the mid-1990s and this created a difficulty in terms of planning for the then Government. The private building programme, which was then completing 22,000 new houses a year, will this year complete 62,000, although a figure of 58,000 was quoted. Last Monday, we had a briefing in the Cork region by the ESB, which has its homework done, and it stated it would be connecting 62,000 houses next year.

There has been a radical change in the housing sector and, although one may complain about the nature of the change, it is a fact of life. An opportunity has been provided to young people to house themselves. In addition, local authority programmes are in operation. Various other groups must be considered and Deputy Durkan referred to one which I believe should receive more help, namely, the voluntary and co-operative sector.

I am involved with a very small group called Skiddy's homes, or Skiddy's charity, as it was originally called. It is the oldest charity in Ireland and the United Kingdom and it dates back 350 years. It is unique in that its bequest was to be divided equally between Catholic and Church of Ireland denominations. It provides 22 comfortable bungalows, mainly for elderly people without accommodation, for example housekeepers.

I pay tribute to the work of the lady who ran the charity and who was its chairperson for the past 40 years, Mrs. Walls. Unfortunately, she died two months ago. She came from the minority section of the tenants but her leadership helped us provide the 22 bungalows. Many others would have similar drive, ability and leadership if they received assistance. I know the funding is available and we need to encourage this approach. I have no ideological hang-ups over the source of accommodation if it is suitable, of a good standard and affordable. We need to encourage this sector.

Having accounted for various segments of the market, we are left with the most crucial sector, private rented accommodation. There may be a degree of snobbery at work in this regard – certainly there are constraints. We are unlike the Dutch and many other nationalities who rarely even consider owning property. They rent according to their needs which means a person might rent accommodation with two or three bedrooms and then move to a smaller place later in life. We must allow for the fact that we do not have this approach.

The Minister has taken steps to rectify the matter of controls, which is one of the main difficulties in the rental market. On the commercial and business side of the market, regardless of whether one is a tradesperson seeking to rent a single room from which to work or a company seeking to rent a large complex, the system in place, including the legal framework, ensures one knows exactly what is expected of one, what one can or cannot do and the measures which will be taken if one steps out of line, whether legal action in the courts, fines or something else. People take this for granted, it is traditional. On the private rented side, however, there appears to be hang-up about having a similar system in place. The Minister of State is now addressing this issue in the legislation.

It is to be expected that aspects of the Bill will be criticised and alternative proposals will be made. I hope the work of the Commission on the Private Rented Residential Sector has ironed out differences to the extent that the decisions made by the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, and implemented in the Bill, including the provision on the duration of rental contracts, will be pitched at the best possible level. While property owners and other representative groups will take different positions on this issue, we need to strike a balance.

The commission was established with 18 members, which I considered a little unwieldy at the time. Although I did not believe it would work, with hindsight I now accept that the number of interests brought into play on this issue meant that the commission needed to have a wide degree of knowledge available to it. Its members have done a good job and I hope it will result in the successful administration of the provisions of the legislation.

Various speakers criticised the rent subsidy scheme. Without wishing to wrong Deputy Durkan, I believe he referred to it in a scathing fashion. During my time as a member of a health board and a local authority, I dealt with this scheme on many occasions. Its introduction has been the single most important change in the rented accommodation market. It has had a major and positive impact on the market by allowing tens of thousands of people to avail of high-quality accommodation. Without it, these people would have had no hope of gaining access to such accommodation.

In many instances, the rent subsidy scheme has provided shelter for young mothers who are left with little option other than to leave home for whatever reason. Before this scheme was introduced, many young mothers found themselves on the street or sharing a flat. It has also enabled people who are extremely unlikely to get local authority housing in many areas to get accommodation, including single males aged under the age of 55, a group referred to by Deputy Killeen. Of all the people on housing waiting lists, single males tend to have the lowest chance of getting accommodation.

The scheme has provided a source of income for people who let accommodation, some of whom are multiple owners. If all the conditions laid out in the Bill are met, we should have no complaint about this. As I stated, a survey has found that 61% of landlords in Dublin had single dwellings for rent. I presume a similar figure would apply elsewhere.

The criticism of the rent subsidy has ranged from the extreme and ludicrous to proposals for workable change, which probably should be accepted. Some people, including earlier speakers, argue that all funding under the scheme should go towards new housing. I have defended this scheme when members of parties from across the political spectrum made the same argument in the chamber of Cork City Council. Although the €30 million or thereabouts paid out under the scheme would build a certain number of houses, what would we do with the thousands of people availing of the subsidy? Would we put them out on the road? This argument is untenable because it would leave 97% of the people availing of the scheme destitute and without housing. The rent subsidy was introduced for people who are entitled to housing but cannot be housed by the local authority.

Others, including Deputy Seán Ryan in his speech last night, argue that the scheme is being abused. My reply to them is simple. Abuse takes place across the spectrum, from schemes for business to social welfare. We should take action to rectify the abuse, rather than throwing out the baby with the bath water. When the Minister for Social and Family Affairs, Mary Coughlan, took action on this matter, she was fiercely criticised by Opposition speakers who stated the scheme was being abused. We should deal with the main form of abuse, which is rent increases by house owners I would be delighted if we could use social housing or social economy schemes to try to create some kind of purchase scheme.

Mr. Gregory:

Ba mhaith liom tacaíocht de mhéid áirithe a thabhairt don mBille seo. Níl aon dabht ach go bhfuil an t-athrú seo ag teastáil agus má tá an Rialtas sásta glacadh le leasaithe áirithe b'fhéidir go mbeidh dul chun cinn suntasach, ó thaobh cheartaithe thionóntaithe de, mar thoradh air.

Má smaoinítear ar stair na tíre, ar an easpa stádais a bhí ag tionóntaithe i gcónaí agus go raibh na cearta ar fad ar thaobh na dtiarnaí talún, tá sé do-chreidte gur seo mar atá cursaí ag an bpointe seo. Tá na cearta ar fad ag na tiarnaí talún go fóill agus tá roinnt mhaith droch thiarnaí talún sa tír.

It is incredible and does not say much for successive Governments that the rights of the majority of tenants are virtually non-existent, by which I mean that the average tenant, who does not have security of tenure, can be evicted without reason from his or her home by a landlord. The legal position is that a landlord can serve a notice to quit, go to court and get rid of a tenant for no reason. It is in the context of bringing about change to this position that I welcome the Bill.

A great deal has been written about this legislation since it was published, which I welcome because it has given much food for thought and has been a great guide to me in formulating my approach to the Bill. I am referring to people such as Fr. Séamus Murphy who has produced a position paper on the Bill. He refers to it as a tentative first step. I am also referring to groups such as Threshold. The introduction to its position paper on the Bill states:

Threshold broadly welcomes the Bill published on 4 June 2003. However there are ambiguities, omissions and weaknesses in the Bill, which must be corrected if the legislation is to result in the promised "major and overdue advancement of tenants' rights.

That is what we must assess. There is no doubt that it is long overdue, but is it a major and significant advancement of tenants' rights? There is a danger that in its present form it is not but it could be if appropriately amended. Threshold suggests that one obvious way to make the legislation more effective is to include a general anti-avoidance provision to ensure that the acquired rights of tenants are protected.

There should also be obligations on landlords with regard to minimum legal standards. The chair of Threshold stated:

A small minority of full time landlords are engaging in scaremongering and sensationalist arguments around this Bill in an attempt to undermine some of the fundamental rights enshrined in it. It's about time that people trying to make homes out of rented accommodation were not regarded as ‘income sources' who can be evicted with four weeks notice at the whim of an unscrupulous landlord.

While many landlords behave reasonably, it is essential that all should be made to do so if tenants, particularly the vulnerable 56,900 recipients of social welfare allowances, are to get a fair deal. I support that summary of Threshold's position.

This Bill is long overdue. For decades there has been serious neglect of tenants in the private rented sector. The Government, in this Bill, is proposing a major reform of the law governing landlord-tenant relations in residential premises. I so not see my role on the Opposition backbenches as opposing measures for the sake of it. When I see something that is necessary and worthwhile, I support it and acknowledge the necessity for it. However, where it requires amendments or changes, I will argue strongly for them.

The Irish tenant's lack of rights and legal protection should be a source of embarrassment to every Member of the House, and certainly to successive Governments, to the point of being shameful when compared to the tenant's status in other European Union jurisdictions. In that context, this Bill has been introduced not a moment too soon. There is a growing number of people, the majority of them poor, vulnerable and on the margins of society, whose vulnerability has increased due to the non-expansion of the public housing sector and the incredible house prices in this State. In the twice weekly property supplements, schemes are being advertised in which prices for houses start at €1.35 million. The average house price has been steadily increasing and is well over €300,000 in Dublin. Many people, therefore, are entirely dependent on the private rented sector.

Leases are normal at the expensive end of the rented sector. Such leases usually ensure a balance between landlords' and tenants' interests. In particular, a lease provides security of tenure for the duration of the lease. Security of tenure is what has been lacking in the rest of the private rented sector, where the great majority of the poorer and more vulnerable tenants are. The Bill can be seen as an attempt to provide security of tenure if only for a renewable four year period for tenants with six months continuous tenancy.

The all important factor in the private rented sector is security of tenure. If a landlord can evict a tenant more or less at will, as is the case at present, it follows that a tenant is in no position to resist, for example, demands for rent increases or infringements on other alleged rights of the tenant. If a landlord can get rid of a tenant for any or no reason, the tenant's other legal rights are largely irrelevant because the absence of security of tenure renders them ineffectual.

In recent years tenants have acquired the legal right to a rent book. Travelling around Dublin one might not believe it but tenants also have a legal right to have the structure and exterior of the premises properly maintained by the landlord and, although I have raised many such cases at city council level, a legal right to certain minimum standards of sanitation and cooking and other facilities. The problem is that the landlord can make it clear to a tenant that any attempt to enforce such rights will be met with a notice to quit. I have seen this happen on many occasions in the centre of Dublin.

While a notice to quit does not of itself legally compel the tenant to vacate the premises, the message is clear. The tenant must put up with what they have or they will end up in court, where they have no protection. A landlord who goes to court to evict a tenant will invariably succeed in acquiring a court order for eviction by the sheriff. Knowing this to be the case, the tenant cannot fight for the above-mentioned rights since doing so might lead to loss of the tenancy, which would be self defeating. The harsh reality is that it is often not in the interests of the tenant to co-operate with the local authority, even when that authority is trying to protect the tenant's rights. The tenant knows that the landlord ultimately holds sway and has the courts on his or her side.

Approximately 82% of Irish dwellings are owner occupied. As a result, there is only a limited understanding of the plight of tenants in private rented accommodation. Many tenants do not know their rights and others are often in despair when they discover there is no way or protecting them. A tenant who lacks some reasonable measure of security of tenure is vulnerable to all sorts of illegal exploitation by landlords and cannot fight it. The State must step into the breach and change the law to ensure tenants can vindicate their rights.

The objective thing would be to say the solution lies in an appropriate balance of rights and duties between landlords and tenants to ensure fairness. Even in that context there will always be unscrupulous landlords and obviously some irresponsible tenants. No law can guarantee that there will not be conflicts. What can be pursued, however, is a reasonable legal provision that allows tenants to hold their own against unscrupulous landlords and ensures effective redress against irresponsible tenants.

A tenant has a right to a home. A person who has no security of tenure for a reasonable period is not much better off than a person in a homeless shelter since he or she is always on the verge of homelessness. This is especially so if the tenant has dependent children. A tenant, therefore, should be able to exercise his or her rights. It is in the interest of good Government that both landlords and tenants be able to vindicate their rights. It is bad policy to assign legal rights to a category of people and then fail to ensure the exercise of these rights does not lead to loss of the very interest on which the rights in question are grounded.

The obvious solution is legal provision to ensure that no tenant may be evicted where a court finds that, on the balance of probabilities, the landlord seeks possession arising from a desire for revenge against a tenant for demanding their rights or for drawing the local authority's attention to the fact that the landlord failed to register the premises, thereby breaking the law. The report of the Commission on the Private Rented Sector proposed doing just that but the Bill does not provide for it. Failure to get to grips with the issue of registering is a major shortcoming in the legislation.

However, I want to be objective and refer to some of the Bill's positive elements before pointing out its weaknesses. Tenants in continuous possession of a premises for six months without receiving a notice to quit will be entitled to three and a half years security of tenure which, while fairly limited, is an advance on the current situation. This amounts to four years in all and renewable for further periods of four years. When established, the Private Residential Tenancies Board will be a second step forward with the power to resolve disputes between landlords and tenants. The board will be able to set up tenancy tribunals with the power to summon witnesses, hear evidence and determine cases. It will replace the District Court and small claims court in dealing with landlord-tenant disputes. There are weaknesses in all the aspects to which I will refer, but they are progressive steps forward in a limited sense. A third step forward is that rents cannot be set, whether at the beginning of the tenancy or in subsequent revision, at higher than the market value. Rent reviews shall not occur more than once a year.

I want to refer to the concept of the market rent because it is a major shortcoming in the Bill. The concept of a market rent is vague. The specialist powers the board will have may give it some effectiveness. Only time will tell how that concept of market rent can be exploited by landlords to their benefit and how effective the board can be in ensuring what is intended is what happens.

Only time and experience will tell if the Government scheme will work. It would be foolish to think that one piece of legislation will reform the private rented sector once and for all. The Bill should be seen as cautious, limited reform. The Minister should study carefully the various position papers and analyses of the Bill. I have read four or five of these, all of which concentrate on certain aspects and certain weaknesses in the legislation. I am sure I will have an opportunity at a later stage when we attempt to amend the Bill to put greater emphasis on these weaknesses.

Mr. Finneran:

I am pleased to have an opportunity to speak on this important legislation and I compliment the Minister of State, Deputy Noel Ahern, and the Government on bringing it forward. Legislation to protect tenants has been discussed for the past 20 or 30 years but no one has taken the bold step to do something about the issue by providing protection in legislation. Different Governments over the years toyed with the idea but they did not bring forward the necessary legislation. The Minister of State is to be complimented on his initiative in this regard.

The Residential Tenancies Bill 2003 is a milestone in the area of private rented accommodation. The general concept of housing in Ireland down through the years has been that people bought or built their own house. Approximately 80% to 85% of people lived in housing they owned themselves. This contrasted with other European countries where a far greater percentage of people lived in rented accommodation. In many jurisdictions there is protection in legislation for tenants and landlords. We must remember that there are two sides to every story. Therefore, any legislation must be balanced.

It is generally accepted that, up to now, the balance was not in favour of tenants. They had little or no protection under the existing rules. Tenants were the poor partner in any arrangement entered into. Under this legislation protection for tenants is being written in law. They have the right to a four-year agreement, following an initial six-month probation period and the protection that rents cannot be increased except on an annual basis. There is also the Private Residential Tenancies Board on which has been conferred powers and functions, albeit of a limited nature, to resolve disputes. The way forward for many years has been to take every matter to the law courts. I am pleased the Government is moving away from that in a whole range of areas.

If we look at the other side of the coin to the insurance industry, the take of the legal profession has been a disgrace in that 40% of awards went to the coffers of the legal profession, thus driving insurance costs through the roof. Up to now tenants going to court had no protection but under this new arrangement they have enormous protection and that is welcome.

Much debate has taken place in recent years about the provision of housing and housing generally, whether in the public or private sectors. Ireland's housing market has been a phenomenal success with close on 60,000 houses being built in 2002. Apart from housing being made available to those who need it, the important issue is the social housing content. For every 100 houses built in any town in Ireland, 20% is available to the social housing programme, either by direct payment to the local authority or the provision of 20 sites or 20 houses. The reforming legislation is having a positive effect on the provision of housing, particularly for those in the social housing area.

I have heard derogatory comments on the housing market and what is being provided. As one who has kept my feet on the ground over the years, through the local authority system, I see a massive change in the type of accommodation available to those who, in the past, would have been classed as local authority tenants, people who would go on local authority lists and wait to be housed. Year after year the local authority of which I was a member built 20 to 30 houses annually while there were 500 on the list. This made no attempt to address the serious housing problem. Thankfully we are moving towards a resolution of that issue. On the local authority side we are building 100 plus houses annually and under the social housing programme that number is being quadrupled. That is the type of approach I am pleased the Government has overseen.

During the 25 years I have been a member of Roscommon County Council we have not been allocated the same grants from Government that were allocated in 2002 and 2003 towards public housing. I compliment the Minister of State, Deputy Noel Ahern, on securing this funding from Government and allocating it to the much needed local authority schemes which remained on the shelves for many years. It is obvious that his own experience at local authority level in Dublin played a major part in his thinking. I compliment him on his positive intervention in the whole area of housing, social and affordable housing and local authority housing.

Recently there has been some debate on rent relief and rent subsidy. It is a good scheme and one that must be maintained. I agree with some of the statements that it gives an unrealistic lift to the cost of rental accommodation. That needs to be addressed, but certainly the scheme must be maintained. It is the only major protection, particularly for young mothers who may have to leave with a child or several children. This scheme enabled them to get into decent accommodation. In circumstances such as that there was little or no protection if they had to go on the open market. They were never the first choice of landlords because they did not have the financial wherewithal or experience of the rental market and ended up in sub-standard accommodation. The rent scheme allowed them to get properties in the private sector market. That scheme will have to be maintained in a manner that gives the necessary protection and an opportunity to those end up on the street, following whatever disputes or problems have arisen to cause them to leave home and seek alternative accommodation.

There are two sides to every agreement. The Irish Property Owners Association has some reservations about the legislation. It was deeply involved and played a positive role in the discussions at the commission on rental accommodation. I understand it has a representative on the ad hoc private residential tenancies board. From the information available to me the Irish Property Owners Association practically signed up to the recommendations of the commission but sees anomalies and changes that were not included in the report. Much that it signed up to in that comprehensive package was not palatable to property owners compared with what they had been accustomed to in the past. Having said that, the association signed up to it and had included in the package the whole area of letting of residential accommodation, given that they are involved in the same tax treatment and reliefs as other businesses.

That is very important and its position should be no different from that of any other business. It points out that the one-size-fits-all approach may not be the most appropriate measure and says this would not be the case in any other European state. It adds that there are tenants who would like flexible arrangements. Have the Minister of State or his officials looked at that question, or is there a need for further discussion on whether there can be any provision for such people? I am neither well enough versed in, nor do I know enough about, that area to comment with any authority on it.

The association also raises the issue of the troublesome tenant, about which I do know a little. How much protection is there in this Bill to deal with such a person? I know of many cases in my constituency where the local authority had to deal with this and found it very difficult to address anti-social behaviour in housing estates. We cannot ignore this problem and previously the local authority was not in a position to address it successfully. I would appreciate a comment on this from the Minister of State, either at the end of the Second Stage debate or at the end of one of the later Stages. He might outline how he sees this position differing from the structures available to the local authority system at present. Does he feel that there is enough protection there for the landlord and for other tenants who may be in that block, house or whatever? These are simply a few of the concerns that have been raised.

This legislation, however, is very welcome and it brings the tenant and residential letting and housing in the private sector into the 21st century. It will be particularly helpful in the social and affordable housing area where it has a welcome knock-on effect. If we are to move, as we seem to be moving, towards a position where private rented accommodation will become part of people's housing needs in the future, it is important that we have sufficient safeguards, checks and balances in the Bill. This is a milestone in that area. As I know from my own family and many others with whom I have contact, people today want to have the flexibility in the early years when they are climbing the career ladder to be able to move at fairly short notice. Many such people do not consider buying a home at an early stage. It is important that this type of legislation is enacted but it is also important that there is a flexible arrangement for these people. That is one of the points which the Irish Property Owners Association has brought to my attention. Maybe the Minister of State will comment on that at the end of this Stage or some other Stage of the Bill.

It goes without saying that many landlords in the past have not met decent standards or even a moral obligation in the properties they have rented and the way they have treated tenants. It is sad to have to say that but that was, and probably still is, the case for some unscrupulous landlords. It is vitally important that this type of legislation exists to ensure that such people do not get away with abusing the rental sector by leaving people in poor or unhealthy accommodation. Happily, as a result of what is happening here that will change, there will be protection and landlords will have to conform to minimum standards and tenants will get their entitlements, whether in sanitary or cooking arrangements, or whatever else is necessary, and have some sort of tenure. Four years is a reasonable period.

I welcome the Bill and compliment the Minister of State and the Government on their initiative. In the past 20 or 30 years many Governments have talked about this but have not brought forward the necessary legislation. Now we have it and it will protect tenants and provide a forum for dealing with disputes. It is a major step forward and will stand the test of time but, if not, any anomalies or difficulties that arise can be dealt with at a later stage.

Mr. M. Higgins:

Tá áthas orm go bhfuil seans agam labhairt faoin mBille seo. Tá tábhacht ag baint leis. Maidir leis an reachtaíocht tá sé soléir, ní hamháin go bhfuil sé ag teastáil ach go bhfuil géar riachtanas leis. Chomh maith leis sin tá sé riachtanach go mbeadh na forálacha leathan agus iomlán agus níl sin éasca. Tá Páirtí an Lucht Oibre sásta glacadh leis mar chéad chéim.

I welcome the opportunity of speaking on this legislation and the attitude of the Labour Party is that it is a first step. We support it on Second Stage as my colleague, Deputy Gilmore, said and we will put down several amendments on Committee Stage which we hope will bring the legislation along. The concept of a housing market is included in the Bill in so far as it refers to the establishment of a rent in terms of the market. I have difficulty with the calculation of this because section 24(1) defines "market rent" as one which:

the willing tenant not already in occupation would give and a willing landlord would take for the dwelling in each case on the basis of vacant possession having regard to–

(a) the other terms of the tenancy terms, and

(b) the letting values of dwellings of a similar size, type and character to the dwelling and situated in a comparable area to that in which it is situated.

This is a fairly unqualified definition of "market rent". It is interesting that it departs from other legislative uses historically. For example, the original tenant purchase schemes introduced in the 1970s took account of length of tenancy and so forth. The Bill does not refer to non-market conditions, as it were. This raises a point which needs consideration which I bring up by way of being helpful when it comes to housing legislation, namely that the Bill does not take account of the life cycle.

Many references have been made to the European private rental sector market. Even accepting the concept of the market where it exists, the European private rental sector market accepts and acknowledges the changing nature of tenancy through the life cycle. The concept of a probationary period of six months followed by three and a half years' security to be followed in turn by a further four year period could be interpreted by the unscrupulous as giving a landlord the right to keep controlling the kind of tenant wanted. It would give a very limited version of security to the tenant in situ and in compliance with most of the conditions through the life cycle. If we are to move towards a regulated rental sector that enjoys the security of the European model, it must have a consideration of life cycle.

While I hope we will have other opportunities of discussing housing in general and do not want to stray from the terms of this legislation, general points have been made by previous speakers about the volume of supply, as it were, into the housing market, which in turn, it is assumed, translates into the volume available in the private residential rental sector. I question some of these assumptions. It is appropriate to put on record what is happening in the private rental sector and, for example, to examine the proportion of gross and disposable income for which rent accounts. Reference was made to young people seeking accommodation in Dublin city. I do not view with great credibility the figure of 61% of landlords having a single dwelling. I would like to see this figure re-examined. It certainly does not relate to Galway city, where I live.

As for those on starter incomes in Dublin city, from my information and my experience in talking to people, I know of no case where the monthly rental income is less than 35%. It is usually above 40% of gross income. I can put that in real terms. Young professionals are on starter incomes of about €24,000, and there are no single occupancy dwellings available in Dublin city centre for less than €800 per month. It is not rocket science to work out the proportion of rental income to gross income. I am deliberately not picking lower salaries even though a great number of people are on salaries lower than the one I mentioned.

People may suggest that one can find this here and that there in Dublin, but I do not have the time in this contribution to discuss all that. If one goes down that road, as many do, one then starts calculating social time, beginning with the time spent travelling to work. I have a view on what is happening in housing and I am encouraged to say a little more, as elaboration is needed.

When I started out in university as a young lecturer without security of tenure, it was difficult to get a mortgage. A loan was given at about two and a half times one's gross income. As I say, I am encouraged to discuss this because people may want to question some of the figures I am using. I can give accurate figures, some of them based on my own experience.

When I was a young lecturer it was possible in Ireland, and is not possible now, for a person to get married and rear a family on a single income. Most of us who were progressive agitated for the right of both partners to be in the work force if they so chose. Now there is no choice. Mortgage slavery began to get worse. There are people who like that. A retired senior civil servant told me less than two years ago at the official opening of a museum that he thought it great that his children would pay more than €250,000 for a house. I had a good hard look at him, because what has happened in the housing market has torn the heart out of the economy. This man was one of those people who enjoyed a very large income and wanted to earn a great deal more after he had officially retired. He saw nothing wrong with speculation in the housing market. I see a great deal wrong with it.

I would like to discuss housing legislation more generally but I have a number of important things to say about the legislation before us and want to make it clear that my views are not abstracted. I refer to a time in Ireland when people were free to exercise a choice to have a relationship with their families and so forth. It was also a time when people could return from work before seven or eight o'clock and have time for participation in their community. That does not happen any more. It was a time too when one did not have to start early in the morning and look for a place for one's children in a country which is not committed to child care. If people suggest there is something wonderful that must not be interfered with regarding speculation in housing, that is not true. There is a lot wrong with such speculation.

People on both sides of this argument should also remain calm regarding law. There is no absolute right to property in this country. Mr. Justice Kenny established that. If the kind of legislation on the cost of building land proposed by my own party and voted down twice had passed into law, it would have had the effect of reducing the gross price of a house by about 30% to 50% minimum.

There is another side to this. I now see a new stage where people coming to retirement age and to a certain stage of their own mortgage commitments have to enter into a second level of indebtedness to keep the racket going, for racket it is. I accept that people say that 61% of landlords with houses to rent in Dublin have only a single dwelling. That is the figure being quoted. I would like to know more about that. I would like to see an analysis of who is buying houses from plans. In Galway city, where I know the facts, people buy property by recycling rents, powerfully assisted by the changes in the taxation code.

The contributors to this debate on the Government side ignored the life cycle aspect and the impact of seasonal factors. How is the market to be established under section 24 if seasonal factors are reduced as grounds? Galway, Cork and Waterford cities as well as other places are relevant in this regard. In Galway city there is a student population present for part of the year. Where there are hospitals, there are nurses and doctors. There is a tourist factor and so on. I refer to these because I can see people driving a coach and four through section 24.

The Minister of State may agree with me on housing speculation. If we have no difficulty about accepting the 61% figure, then I suggest that the figures be published when the registration is complete and we will see who owns what and the circumstances of that ownership, in which market and under what conditions. I genuinely welcome this legislation as a first step. I am not underestimating any of the difficulties that may arise. Among the difficulties that arise is that there is not an unqualified right to property in the Irish Constitution as interpreted by judicial decision. As I understand it, there is, unfortunately, no right to shelter, except in the European legislation.

I wish to tease out the different rights to shelter, the right to make a home out of rental accommodation. Is there such an aspiration? When did it happen that one's right was defined solely in terms of ownership? Is there not something about the nature of the Republic and its Constitution if one has an absolute right to own something but no absolute right to shelter if one is homeless and no right to security of accommodation if one is renting? These are not academic matters, they are matters to do with the debate about rights-based legislation with regard to housing and sooner or later they will be addressed.

I hope at a future date to write in more detail about the mentality of those who took some of the largest salaries from the State, decided then to half dump themselves on the half State, then go on to the fully commercial sector and then, for good measure, set up a kind of defence of the speculative role in housing. At the moment I am being strictly parliamentary by leaving it at that.

If we are to be realistic about housing, the real test is to ask what proportion of one's gross and disposable income per month is given for accommodation costs in the rental sector. Is this disassociated from the rise in the cost of housing, both first-time and second-hand housing? It is not disassociated from it. I would be glad to be proved wrong in my belief that the concept of market value for rent is inexorably connected to the cost of housing. There has been a slight drop in rents in the private sector in Dublin in the past 12 months, but taken over a five year period or longer, there is an established connection. In a six year period the cost of housing in Dublin has risen more than 200%. It is nine times the rate of the increase in inflation, five times the increase in earnings and four times the cost of building. That is a significant contributory factor. This is behind the interpretation of market value.

There is another set of problems. The right of renewal cuts across the legitimate expectation of responsible tenants who are secure and looking forward, beyond the period of four years. It is perfectly understandable that there are people who are not sucked into the ownership syndrome and who may want to remain as responsible tenants. I believe there is a genuine attempt in this legislation to move towards a model of responsible tenancy where the responsible tenant is an asset when a property is being sold. At the moment the right of renewal as expressed is out of kilter with what exists, for instance, in German legislation. I question the probationary period of six months. That is capable of being abused. If the decision regarding the appropriate rent is to be based on what a willing tenant would pay for vacant possession and what a landlord is willing to accept, why is this so different from what is used as the model for rent subsidy?

In Galway city, I am dealing with several cases in my advice centres where, because of the capping of the rent subsidy, people have been told that their accommodation is too expensive. The problem is that there are no cheaper units available. I have been in Galway for about 20 years and this is a side of the Galway rental market I have missed.

Reference was made to section 16(m) and the notion that the tenant must inform the landlord of somebody who is staying in the accommodation with him or her. I will not dwell on the more exotic interpretations of that section, as have other speakers. I suggest that, for example, if there was a death in a family and somebody wished to stay with the tenant during a period of grieving, the tenant should not be under an obligation to tell the landlord.

I regard as extraordinary the provision that if a baby is born the terms are automatically dislodged with regard to the number of beds on offer in the rental accommodation. Contrary to some speakers, I think Part 4 of the Bill is a genuine attempt to define anti-social behaviour and is to be welcomed. I agree that if this legislation is to work, the procedures must be both speedy and adequately resourced, as is the case with the Small Claims Courts. Anti-avoidance clauses and legal compliance will depend on the quality of the orders made by the Minister.

Acting Chairman (Mr. Carey):

I wish to remind the remaining speakers that the Minister of State must reply no later than 12.45 p.m.

Mr. P. Breen:

I do not intend to speak for 20 minutes so there will be ample time for the Minister of State to reply on this important debate. I welcome the Bill, as does the Fine Gael Party. It is a long overdue development in housing legislation. Fine Gael has been calling for Government action in light of the significant changes in the housing situation, particularly as a result of the Celtic tiger economy of the 1990s.

Deputy Gregory referred to the fact that 82% of those housed are owner-occupiers, which is a very high percentage of ownership. Ownership of houses is much lower in Europe. The pattern of housing has changed with the development of urban sprawls. The need for reform of the private rented sector has long been recognised. The Bill is published against the background where the percentage of the housing stock available for rent has risen from 8% to 13%. This percentage increase is all the more noticeable because of the rise in the total number of units.

Exorbitant house prices are a feature throughout the country, including in my constituency, where a three or four bedroom house costs well over €200,000, a huge amount of money. There are many absentee landlords who have bought multiple houses for letting, creating problems for those who would like to buy and leaving the rental sector as the only realistic option for them. Home ownership is the ultimate goal for many people but they have to put it off to a later date.

The Government's record in housing is poor. Before the budget last year, the first-time buyer's grant was abolished, a huge blow to many couples. Fine Gael collected over 100,000 signatures in opposition to this measure from those who were put out because the grant was abolished. Now development charges are being introduced, placing even heavier burdens on young people who want to build houses, adding between €8,000 and €9,000 to the cost of a house in a rural area.

The average house price in Dublin is €300,000 and in my constituency it is well over €250,000. At least 100,000 people are paid a rent subsidy by health boards and tenants enjoy little security of tenure. Many policy decisions on housing were framed on the basis of poor information and the latest Estimates add to the situation by stipulating that tenants must be living in a house for six months before receiving a subsidy, making the situation for many people intolerable. The Housing Statistics Bulletin stated that 5,581 people are homeless and if one walks the streets of Dublin, one will see many homeless people. There is also evidence that homelessness exists in areas outside Dublin – people are sleeping rough in Ennis.

The Bill is the only decent measure the Government has introduced in housing in the past seven years. Fine Gael views the Bill in light of the need for proper recognition of rights and responsibilities. We understand that a vibrant rental sector that is attractive as a medium-term option is vital to the economy. We must ensure the rental sector is fair to landlords to boost supply as well as fair to tenants to maintain demand.

Some changes will be necessary on Committee Stage. The composition of the Private Residential Tenancies Board should be spelt out clearly in section 147. The board is central to ensuring the spirit of the Bill is adhered to and that neither tenants nor landlords can abuse perceived loopholes in it. The Minister is free to choose whom he wants as long as they are deemed to have adequate experience in the area and there is an equitable balance between men and women on the board. That will not ensure a balance between the interests of landlords and tenants. The Fine Gael spokesman on the environment, Deputy Allen, has proposed a balance of five landlord, five tenant and five impartial representatives.

Section 148(2) allows the Minister to make subjective decisions to remove a member of the board at any time. This grants him great power over the functions of an independent group, a variance from what is expected from the legislation. Coupled with section 192, the Minister has effective control to rewrite the day-to-day workings of the Bill subject to his own interpretation.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

Mr. P. Breen:

Section 125 of the Bill refers to the publication of the register, but it will not contain information on the identity of landlord or tenant or the amount of rent payable. Full taxes are not paid on rental income by some property owners and this Bill does not address that. Students often pay rent to middle men who demand cash to avoid paying tax. The Bill, with some changes and hard work, will be a giant step forward in this area.

Mr. Ferris:

I welcome the opportunity to speak on this Bill and will address a number of issues regarding its content. The changes in eligibility for rent supplement will cause serious hardship for many people in the private rented sector. The changes in rent allowances, announced in the Estimates, are reckless and will have a catastrophic effect on the most vulnerable, such as unemployed people living in private rented accommodation for less than six months and for those whose accommodation is linked to their employment. Such people will lose their job and home.

Ministers cannot even agree on whether rent supplement is a housing measure. On Wednesday morning, the Taoiseach failed to answer a question from my party colleague, Deputy Caoimhghín Ó Caoláin, on the following matter. During a debate in the Dáil last week on a Sinn Féin Bill to enshrine the right to housing in the Constitution, the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, vigorously defended the Government's housing record by stating: "The general strategy for realising the overall housing policy aim is that those who can afford to do so should provide housing for themselves with the aid of available fiscal incentives, and those unable to do so from their own resources would have access to social housing or income support to rent private housing." Two days later the Minister for Social and Family Affairs, Deputy Coughlan, when announcing the changes to the eligibility criteria for rent supplements stated that rent supplement is "not a housing measure". The Taoiseach was unable to tell Deputy Ó Caoláin which Minister was correct – the Minister of State with responsibility for housing who claims rent supplement is a housing measure when he needs to patch up this Government's scandalous housing record or the Minister for Social Welfare who says it is not a housing measure when she needs to excuse a housing cutback which hits the poor.

This cut will have a real and damaging effect on those attempting to leave abusive homes, single parents and those stuck in grossly over-crowded situations which have been condemned by Threshold and others such as the Simon Community, the Society of St. Vincent de Paul, Focus Ireland, One Parent Exchange and Network, the Irish Refugee Council, the National Youth Council of Ireland, the Irish National Organisation of the Unemployed, Age Action, Children's Rights Alliance and Cherish. How can this Government not see the dire consequences of this decision?

It is outrageous that it should choose to attack rent allowances again this year. The cap on rents at €107 for those in receipt of rent supplement will also cause great hardship because it is virtually impossible to find accommodation which costs less than that per week. It is pushing landlord and tenant agreements under ground and will force people to falsify documents, with the aid of landlords, to indicate that they are paying less than €107 per week for their accommodation. What this provision will do is to force decent, hardworking people, those caught in the poverty trap, to criminalise themselves in order to obtain accommodation.

This Government has done nothing about the housing crisis during its term in office. This measure will, I have no doubt, bring about an increase in homelessness because the most vulnerable people will find they cannot get into the private rented sector. For some the choice could be one of remaining in a violent home or living on the street. People caught in abusive and violent homes will tolerate such circumstances rather than become homeless.

As my party colleagues stated, Sinn Féin welcomes many of the provisions contained in this Bill. There is no getting away from the fact that it is deeply flawed in its failure to address the issue of fair rent. Security of tenure provisions will be compromised because a person living in the private rented sector for four years will be liable to eviction without reason in the first six months of his or her second tenure.

Minister of State at the Department of the Environment, Heritage and Local Government (Mr. N. Ahern):

I thank Members for their comments. There has been great interest in the Bill with more than 50 Members contributing to the debate.

While the Bill, which is based on the commission's report, strikes a fair balance, I am open to people's views and detailed matters can be examined on Committee Stage. There has been a positive reaction to this Bill inside and outside the House. One of the values of having it published during the summer was that it enabled great debate on it outside this House, as many Members have acknowledged. We now have the views of concerned people on both sides.

There has been some criticism of the Bill but most people have been fair and balanced in their views. People recognise it is a step forward. The reforms provided for will have a positive effect in terms of promoting harmony, stability, professionalism and investment, something which is extremely important, despite what some say, in the private rented sector.

Members have made some very sound points and political ones also. Others have made some off-the-wall points. Deputy Durkan is not present and, while I regard him as a nice man socially, some of the comments he made this morning were off-the-wall. Twenty minutes later I am still unsure whether it was landlords or tenants he supported. I generally listen and do not interrupt but much of what Deputy Durkan had to say was so off-the-wall I could spend my 15 minutes replying to him alone.

Some Members have criticised the Government for being slow to provide local authority and social housing, yet many of them served on local authorities until recently. Some local authorities have been pathetic in delivering houses. It is easy to say the Government should allocate the money to provide such houses. The Government has provided the money by way of a four year multi-annual programme. I could embarrass many people. Deputies were members of local authorities which received money for the provision of houses during the last four years, yet many of them built only half what they intended to build. Rather than slagging me off, people should, through their local councillors, put pressure on local authority management to deliver what they are required to deliver.

Deputy Brendan Smith and others made an interesting point this morning about elderly emigrants. A number of local authorities try to ensure that senior citizen accommodation is provided to such people. A current Member of this House is an active member of a housing association which concentrates on that area. It is right that we should take care of emigrants returning from abroad after 50 years. The pre-1953 social welfare scheme mentioned this morning received much criticism in recent times from some of the liberal media complaining that expenditure has worked out at far more than we expected. That is correct and I do not apologise for that. Many emigrants who left Ireland in 1954 or 1955, who have not worked here for six or seven years and who sent money home during their years abroad, live in very limited circumstances. It is a good that, following 50 years, we are paying them a half pension under the pre-1953 provision. I do not apologise for doing so. Of course other people who do not need the allowance have claimed it.

Many Members raised the issue of rent regulation. The commission examined that matter and felt that rent control had many disadvantages and that market rent was the way to go. We can discuss that again later.

Those of us on the Government side have been trying to concentrate on the supply aspect. A good supply of rented accommodation ensures that market rents are more reasonable. Deputy English said last night that there are houses in his constituency which cannot be let, and I heard what Deputy Michael Higgins said on that. I have met at least two landlords in my constituency over recent weeks who complained to me that this year they failed to let the houses they would normally let to students. I did not shed too many tears for them, so be it, but it will be good to get to a stage where supply equals demand because it will allow people to look for better standards of accommodation. We all know that in recent years when there was a shortage of supply, some landlords took advantage of that and demanded very high rents even though they were providing inferior quality accommodation. If the balance goes the other way, I will not shed too many tears but I do not want to see a situation where there is over-supply and no demand. We want to try to get some balance in that regard.

Rents have come down a good deal in Dublin in the past 18 months. Rents that were €2,000 a month are probably down to €1,600 or €1,700 and those that were €1,600 are down to €1,400. Rents of €1,200 per month are probably still at that price because the rent allowance or whatever is acting as too much of a support. Supply and demand are coming into equilibrium and I welcome that because we will be able to do far more in terms of standards when that happens.

Local authorities have been very lax regarding standards and indeed registrations. I was a member of a local authority when that system was brought in – I believe Deputy McManus was Minister of State at the time. I saw it as a huge revenue source for the local authority I was on at the time but it has not become that because local authorities, for whatever reason, did not see the benefit of chasing landlords for what was then the £40 per unit. There is a reasonable number of houses registered in some local authorities – Dublin and Galway – although one large county, which I will not name, has only one registered let house. That is a joke.

Mr. M. Higgins:

Some have gone down although the quality of accommodation has gone up.

Mr. N. Ahern:

Local authorities have failed to impose the standard and they have failed to bring in the revenue. That is difficult to understand.

I would like to clear up a misunderstanding about penalties for non-registration. There will be a double fee of €140 for late registration. That is not a fine but some people appear to have confused it with the penalties for non-registration which are much higher. If a landlord is convicted of the offence of not complying with a requirement to register, the penalty will be a fine of up to €3,000 or six months imprisonment. The late registration fee and the sentence for nonregistration are two different aspects.

At the outset I mentioned some provisions on data exchange. They remain to be added on Committee Stage. Some Deputies raised the issue of access to data by the Revenue Commissioners. I want to stress that there is no question of information being kept from the Revenue Commissioners. That is not my intention. The details of the data provisions to be included on Committee Stage are being finalised and they will be available. They are likely to enable registration data to be provided to the Revenue Commissioners on a case by case basis where required. However, the Revenue does not require us to put such a clause into legislation because its powers generally are dealt with in taxation legislation and any wider power that might be considered necessary for the Revenue Commissioners to access data on rented accommodation would be a matter for consideration in the context of such legislation. In addition, a Revenue powers group is examining all those aspects and it may seek extra data from us. I assure the House I will have no problem in getting the tenancies board to supply necessary data to the Revenue Commissioners.

Many speakers mentioned the six months tenancy period. This issue was discussed at length here and in the commission and it is easy to make a case either way. It was a judgment call by the commission which recommended it as a balanced period. I am not suggesting that logical arguments cannot be made, and I am sure they will be made again on Committee Stage.

A number of speakers mentioned, and Deputy Gilmore suggested, that landlords might terminate tenancies during the six months probation period to get higher rent from new tenants. That does not make sense because under the Bill the landlord can seek the full market rent from an existing tenant at a yearly review. That is the maximum that will be paid. There is no value in a landlord trying to get one tenant out and another in who might be an unknown quantity when the rent they get is the same. I do not see the logic of that and we should not put out misinformation in that regard.

A number of other points were raised which I will not have time to deal with, but mention was made of the SWA rent supplement scheme which provides income support through the welfare system for eligible persons who are unable to afford rent. Rent supplement claimants will benefit from the reforms in this Bill in the same way as other tenants.

It is important to refer to what has been said in recent weeks because there has been some comment on that. From a housing perspective, I am concerned that some of those comments may have caused unnecessary fears. Most commentators appear to have ignored the assurances given by the Minister, Deputy Coughlan, when announcing these changes. The details of these measures fall to be specified in regulations which will be brought forward by the Minister for Social and Family Affairs. The Minister reinforced those assurances in the House this week. For example, she stated specifically that there would be exceptions for the homeless and people at risk of becoming homeless, and that nobody would be made homeless because of the changes, but we all live in the real world. We all move around our constituencies and we know what is happening in terms of rent allowance.

This is a very necessary measure which has been of great benefit over the years but there are almost 60,000 people on rent supplement. We talked about the cap introduced last year which was intended to keep a lid on things but this year alone the cost of rent allowance increased by €76 million, a 30% increase. That does not make sense. It is obvious that many people are using the rent allowance facility but how can we look at a spend of an extra €76 million this year? We are now giving approximately €330 million as a subsidy to landlords which in some cases is for very low quality accommodation. We know the system is being abused and now there is greater supply, much of which in the past year has gone to rent allowance people who, in many cases, were adequately housed but who availed of the opportunity because accommodation is now available. We cannot justify a 30% increase in one year and it is reasonable that some measure be taken while ensuring that genuine people are looked after. That is what we are trying to do here.

I have made no secret of the fact, even in my own constituency, that the State and the taxpayer is ploughing a fortune into the regeneration of certain areas like Ballymun and inner city areas. A key part of that was to ensure a social mix in Ballymun. We wanted to bring in private tenants to provide a social mix, because up to now there were 6,000 units of local authority housing and suddenly all these private apartments were being occupied by people on rent allowance. Where is the social mix? I am concerned about this and I make no secret of the fact that I have asked whether we can limit the number of people on rent allowance in areas where there are already too many.

It has been an interesting discussion. I could keep on talking about this for hours because the problem with listening to the contributions of about 50 Members is that many points are made and I cannot answer all of them. However, we can consider them again on Committee Stage. I was a bit upset at some of the comments of the Irish Property Owners Association. I want this legislation to be balanced, not strongly in favour of one side. As I said in my opening speech, during my life I have been both a tenant and a landlord, although I am currently neither, so I hope I am being balanced. I would prefer if this Bill had been introduced a couple of years ago. I look forward to Committee Stage, on which we can consider these points in more detail. Many points were made about our housing programme, investment and so on and I have good answers for all of them so I am sorry I do not have time to go into more detail. I thank all the Members and everyone who was involved in the preparation of this Bill.

Question put and agreed to.