Housing (Amendment) Bill 2013: Report and Final Stages

Amendments Nos. 1 to 3, inclusive, are related and may be discussed together.

I move amendment No. 1:

In page 3, to delete lines 10 to 16 and substitute the following:

“(a) in subsection (3) by deleting paragraphs (a) and (b) and substituting:

“(a) charges such as rent as is set down in a national rent scheme established by the Minister.”,

(b) by deleting subsection (4),

(c) in subsection (5) by substituting the following paragraphs for paragraphs (a) and

(b):

“(a) A housing authority shall, in accordance with regulations made for the purposes of this section, not later than the date prescribed by the Minister for the purposes of this subsection make a scheme (in this Act referred to as a ‘rent scheme’) in line with the national rent scheme as referred to in subsection (3).

(b) A housing authority may, from time to time, as the Minister directs, revoke the rent scheme and make a new rent scheme.”.”.

I have tabled these amendments because I believe that rents should be set according to people's means and ability to pay. If one is on a social welfare payment in Donegal, Dún Laoghaire or west Cork, one's payment is the same. If one is earning the minimum wage in Kerry, Kilkenny or Westmeath, one's wage is the same. Social housing rents should be set on that basis, namely on what people are able to pay, given their income and no other factors should be taken into consideration.

At one level, this Bill suggests that the Government is moving in that direction because it refers to removing certain considerations that should not be included in the setting of rents. That is welcome because it is wrong, for example, for property prices to be in any way influential in the setting of rents for social housing. In my area of Dún Laoghaire, and I suspect it is true of Dublin generally and other major urban centres, social housing rents have been heavily influenced by local property prices, which is completely unfair. Property prices should have no bearing whatsoever on social housing rents. I have compared the differential rent scheme in Dún Laoghaire with schemes elsewhere and found that - for no apparent reason other than the fact that private rental rates in the area are high in general - social rent rates for the area are higher than the average, even though the income of people who depend on social housing is no higher in Dún Laoghaire than elsewhere. This situation is grossly unfair and the Minister of State seems to be trying to address it with this legislation, at one level at least. However, while it is fair enough to take market prices out of the equation, the Minister of State is still giving the power to local authorities to vary rents. The Bill refers to issues such as the cost of maintenance of the social housing stock, for example, as something which can influence the rents local authorities can charge. I do not believe that is right, particularly against the background where budgets for local authorities and the money being made available for the provision of social housing are being cut, year on year, because there will be major, if not irresistible, pressure on local authorities to increase rents in order to maintain their housing stock. Therefore, significant variations in rent levels between one location and another will continue, based on the financial health or otherwise of the relevant local authority.

We need social housing because there are 100,000 families on the social housing list. We must provide for such families right across the country in a major way, which has not been done for the past ten to 15 years. I hope this Government will address the urgent social housing need that exists. That must be done and the rents for that social housing must be based solely on people's ability to pay, now more than ever, as so many in our society are struggling financially. There should be no question of rents for social housing being increased because of financial pressures on the local authorities.

While there are elements of this Bill that are progressive, there are other aspects that are very retrograde. The way to address that is to have a national differential rent scheme, to be applied right across the board, rather than giving local authorities the power to vary rents, depending on what pressures they are under. That is the logic behind my amendments and I hope the Government will seriously consider accepting them. I believe they are fair. The Department seems to be acknowledging, in this Bill, that there is an unjustified variation in rents across the country. If the Department accepts that, then the best way to address it is to devise a national differential rent scheme, based purely on people's ability to pay. I look forward to the Minister of State's response.

I support Deputy Boyd Barrett's amendments. The setting of rents across local authorities is very important and there must be consistency. One of the main problems is that different local authorities apply different rent rates. Differential rent rates should be based on the income of tenants, which is the fairest way to determine them. Ability to pay should be taken into account. It is very unfair, for example, that people on social welfare pay different rents, depending on the local authority area in which they live.

In the context of the LPT, we have already had indications from Cork County Council and others that they intend to add the LPT onto the rents. Will there be variations in this across local authorities too?

There has to be consistency. That is the only problem I have. In general, what the Minister of State has laid out is okay. These amendments would give us the consistency that is needed across local authorities, and I support them.

I do not propose to accept Deputy Boyd Barrett's amendments. We are moving towards a harmonisation of rent under HAP. It is intended that there would be model rents for different families around the country and harmonisation would be developed under the HAP legislation which we will introduce later in the year. It is a fairly technical amendment to ensure we can have rent schemes during the course of the transition period.

I did not think Deputies Boyd Barrett or Ellis had a Stalinist approach to socialism. I am a democratic socialist and I thought both Deputies were as well. In effect, they are saying there should be a diktat from the Custom House that would take away all local democratic decision making with regard to this. There is very limited democratic input in terms of the role of councillors, but that was widely welcomed across the House when we dealt with Second Stage of the Bill.

The Deputy proposes that the national rent scheme should be absolute across the country from the beginning. For example, the rent for a one person household in one part of the country might be €20 per week but can be over €30 in another part of the country. We want to set a model for a general scheme around the country. We want to give local authorities time to get to that point. I propose a graduation towards model rents.

In other words, a local authority which is now charging €20 would have time to come to a model rent and one which charges a higher rent would suffer a loss if rents were reduced. We need to give councils and councillors a certain amount of time to get to a model rent. I assure the House that the intention is to move towards a harmonised rent scheme. We have not had a centralised rent scheme since 1986.

Section 31 of the Housing (Miscellaneous Provisions) Act 2009 facilitates significant harmonisation of local authority rents while providing locally elected members with some discretion in deciding rent policy for their areas. The section will bring local authority rent policies more in line with each other, while retaining some scope for variation for local circumstances. The Deputy's amendments go to the other extreme and would involve diktats from the Custom House that must be implemented without question by every housing authority.

This approach not only runs counter to the Government's approach to local government reform but also flies in the face of the approach to social housing reform set out in the 2009 Act which involves local authorities exercising their statutory functions within broad parameters set down at national level, but in a manner which reflects local circumstances.

At various times during debates on housing and local government we have all talked about the need to give more power and function to local authority members. Amendment No. 3 proposes the deletion of subsection (7) from section 31. This enactment gives elected members a policy making function in regard to rents for the first time. As I said, Members on both sides of the House welcomed that on Second Stage.

I am somewhat surprised that the Deputy thinks so little of local democracy that he wishes to take away a policy making power from councillors before they have even had an opportunity to exercise it. Section 31, as it stands, strikes the right balance between national and local policy making in regard to local authority rents and I do not, therefore, propose to accept the amendments.

I want to reassure Deputy Boyd Barrett that the intention is to have harmonisation right across the country. We want to give a small amount of discretion to local councillors in terms of policy making. We also want to give councils some time to get to that point. This will facilitate the transfer of long-term rent supplement to local authorities, but in order to do that we need to have model rents for the different types of households around the country.

The intention is to get close to the position the Deputy is taking, but I do not propose to have the Custom House or any centralised government authority take away powers we propose to give to local councillors, albeit a relatively limited power in terms of rent policy.

Power, particularly now, is money. Everything else is just decoration. If the Government is cutting budgets for local authorities to provide and maintain social housing while at the same time saying it is empowering local councillors that is frankly a bit disingenuous, to put it very mildly. It has power over an ever-diminishing cake. In that situation only one pressure will come on those councillors.

There will be no pressure on them to reduce rents; let us be clear about that. The only pressure will be to increase rents. That is what will happen. The logic is very similar to what is being done with regard to the property tax. Many others think it is unfair and unjust, and a burden imposed on people who own their own homes. Then, in an act of empowerment, supposedly, the Government is giving local authorities the right to vary that property tax by 15%. The Minister of State and I know which way it will go. It will go up.

It will. There is no question but that it will go up. The pressure on local authorities who are having their central funding reduced will increase. That will also happen with rents. Talk of Stalinism and centralisation is a bit ironic. Without getting into history, more people on the other side of the House had previous associations with Stalinism than those on this side.

The Deputy cannot talk about-----

If the Minister of State is concerned about having the input of local authorities on the setting of rents it could be done at a national level. We could have inputs from all local authorities on a national differential rent scheme. The end result would be a national scheme where there would be input from all stakeholders, including anti-poverty groups, housing NGOs and so on as to what rents would be fair and reasonable to charge people in a harmonised national differential rent scheme.

I am afraid the Deputy has exceeded his two minutes. Would the Minister of State like to respond?

Without that rents will increase, which is unacceptable. I will press the amendment.

I do not agree that the 15% variation in property tax will always vary upwards. In the Deputy's local authority area 80% could be retained. Given the valuation of houses on the east coast there will be considerable scope in that area generally to vary the tax. Many local authority members will not agree with the Deputy. In fact, the entire Sinn Féin membership said yesterday it would campaign and say it would reduce rents by 50% if it was in government next time. I have no doubt other candidates for local elections will say exactly the same thing. They will have to fulfil that promise when they are elected.

If the Deputy is making the point that because of financial pressures local authority members will somehow want to increase rates in their areas, I do not agree. If it is decided at a national level it is probably more likely to increase than if it is decided at local level. I do not see why deciding it at national level will automatically make it less likely that rents will be higher or lower.

This is essentially about protecting an element of local democracy while at the same time having statutory guidelines in place to ensure there is harmonisation across the State. Transferring the rent supplement is an important element of that in the context of the difficulties, pointed to by many Deputies, that people are experiencing. The application of a differential rent scheme to tenants who are currently on rent supplement will be of great benefit to large numbers of people. In order to achieve that, we must have model rents. We will be setting a model rent framework for different types of household at national level, but it will facilitate a certain level of variation for local authorities. It is a good balance and I do not propose to accept the amendments.

We have had some of this discussion on Committee Stage. I completely agree with the Minister of State's comments regarding the housing assistance scheme and the move to a single-tier administrative function for local authorities. The rent caps were changed very recently, with increases in some areas, including my own. They remain, however, below market rents throughout the country and people are struggling to secure accommodation. I do not disagree with the Minister of State's approach, but I share some of the concerns expressed by Deputy Richard Boyd Barrett.

The Minister of State indicated that a business case will be undertaken in respect of the transferring of rent caps. The problem is that, if the money does not come across from the Department of Social Protection, it is inevitable that there will be a conflict between people in local authority housing and those in receipt of rent assistance through the local authority. There will be a mismatch in terms of the amount of funding available. How does one square that circle? People in local authority housing will be on a differential rent and that same differential rent model will apply to persons in the private rented sector, yet there will not be the kind of funding available to source accommodation in some parts of the country at the rent levels that the Department of Social Protection seems to believe can be sourced. This will inevitably place an additional burden on people through rent increases. Will the Minister of State comment on that?

This is essentially a technical Bill which paves the way for the larger debate. When I introduce the legislation on the housing assistance scheme, the economic assessment will have been completed. I hope to bring a memorandum to Cabinet before we break for the summer setting out our plan for implementing the transition. There is a great deal of work to be done before then, including co-ordination of the information technology systems of the Department of Social Protection and my Department. Nobody disagrees with the principle of what we are trying to achieve, namely, moving people to a fairer system of paying rent on the basis of their income and removing the poverty trap whereby individuals in receipt of rent supplement who obtain a full-time job lose their entire payment. That is a terrible impediment to seeking work.

I am not minimising the reality that there are serious financial issues we must address in the meantime, but I am determined that we will address them. The objective is to have a model of the level of rent that each different type of household would be expected to pay under a differential scheme. The type of variation about which Deputies Richard Boyd Barrett and Catherine Murphy are concerned would arise only on the basis of income. We will introduce detailed proposals in that regard. However, in advance of the completion of that element of the work, I cannot give definitive answers to the Deputies' questions.

My experience in Galway is that local authorities are advising people, because there is so little social housing available, to apply for the long-term leasing scheme or the rental accommodation scheme. I dealt with a case recently in which a young blind woman was seeking a house with a garden for her guide dog but none of the available local authority houses was suitable. The scheme is capped at a certain level, as specified by the Department, for single people, couples and families. What I am finding, however, is that individuals are going back and doing separate deals with landlords whereby they agree to pay an additional €200 per month, for example, out of their own resources in order to secure a property. This is probably outside the remit of the Bill but I ask the Minister of State to consider how it might be dealt with in other legislation. It is very unfair that people are obliged to pay money out of their own pockets, unknown to the local authorities, via side deals with landlords. We must ensure there is adequate funding available to enable people to rent a house on the open market. There is also an issue of staffing in that local authorities do not have sufficient personnel to deal with the volume of applications. Will the Minister of State comment on these issues?

I acknowledge the Minister of State's intention in this legislation of moving towards a fairer system with more consistency across the board in terms of rents. Action must be taken as a matter of urgency to bring rents into line across the country. The Minister of State seems to be working towards that objective, but the pace of progress is too slow. There are massive differences in rents across the country and that will continue when the rent supplement scheme transfers to local authorities. County and city councils are already coming under huge pressure to cope with the demand for properties under the rental accommodation scheme. Large numbers are not being housed because there is no social housing available. We had an incident in Bray in which residents were locked into the local authority premises because of a failure to provide housing under the rental accommodation scheme. That type of thing will happen more and more in the future. The commitment given under RAS was that people would either be given local authority housing or a continuation of RAS. I have spoken to a person who ended up homeless as a consequence of the local authority's failure to fulfil that obligation.

How is it proposed that the rent supplement scheme will be administered when it is taken over by the local authorities? How, for instance, will we deal with situations in which a property is put up for sale by a landlord or lending institution and the RAS tenant is evicted? The rules are too lax in this regard, with many contracts being cut short because the landlord wants to sell. We must tighten up the provisions in regard to these contracts because the current situation is very unfair.

We are straying a little from the Bill, but there is a priority question today on that issue which I think Deputy Dessie Ellis tabled.

Deputy Noel Grealish's point has been raised many times in this Chamber, on Second and Committee Stages of the Bill and in various other contexts. Strictly, it is a matter for the Minister for Social Protection. I do not deal with rent caps and rent supplement, but the issue came up in this context because this and the next Bill will facilitate the transfer of the long-term rent supplement scheme to the local authorities.

On Deputy Dessie Ellis's point, there is a working group that consists of representatives of the Department of Social Protection, my Department and the City and County Managers Association because, in the context of preparation for HAP, it is of concern to all of these authorities. I will inform the House as we progress and we will certainly have an opportunity to discuss these issues again. This is a very narrow, small, technical Bill to facilitate the charging of rent during the transitional period, but I appreciate the genuine interest of all the Members who have spoken today and on Second and Committee Stages on the issues raised. Unfortunately, I cannot accept Deputy Richard Boyd Barrett's amendments because I want to keep the minor level of flexibility in respect of the local democratic element and the powers of local councillors.

The main arguments have been made. I am glad that the Minister of State accepts the general thrust of the argument, if not the actual amendments, in stating her own commitment to a harmonised and fair scheme. I seriously worry that she is leaving the door open for things to move in the opposite direction. The logic behind the amendment is to have harmonisation and I do not really think it is that difficult to achieve. To back up the logic of my proposal, there is a serious rent arrears crisis in many local authorities, certainly in my area which I suspect is replicated around the country. Many people are not able to pay their rent.

It is a major problem in Galway.

Therefore, it has been confirmed in Galway and Kildare. Deputies are nodding in agreement. This is evidence that we need to move urgently to a harmonised and fair system. If the Minister of State said the level of flexibility would be specified and limited to a 1% or 2% variation, I could accept her argument that the transition is acceptable. This, however, is open-ended. She is proposing that there be wide scope for local authorities to increase rents significantly, depending on the financial pressures they are under. If that is the choice available to us, I suggest my proposal is the better solution.

Deputy Catherine Murphy has pointed out that in her consultations the Minister of State mentions the Department of Social Protection, her own Department and county managers. Where are the public representatives? Where are the representatives of NGOs dealing with housing issues on the front line? Where are the representatives of anti-poverty groups to consider these matters? They need to be involved in consultations.

We engaged in considerable consultations with Threshold, in particular.

There should also be consultation with public representatives on local authorities, as well as managers. I will press the amendment on the grounds that the Minister of State is not limiting the discretion of local authorities to increase rents upwards significantly from the model rent she suggests. We need harmonisation. It has to be fair, but the Minister of State's provision leaves too much flexibility for injustice and to increase rents.

Question put: "That the words proposed to be deleted stand."
The Dáil divided: Tá, 91; Níl, 29.

  • Barry, Tom.
  • Breen, Pat.
  • Browne, John.
  • Butler, Ray.
  • Buttimer, Jerry.
  • Byrne, Catherine.
  • Byrne, Eric.
  • Calleary, Dara.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Coffey, Paudie.
  • Collins, Áine.
  • Conaghan, Michael.
  • Conlan, Seán.
  • Connaughton, Paul J..
  • Conway, Ciara.
  • Coonan, Noel.
  • Corcoran Kennedy, Marcella.
  • Cowen, Barry.
  • Creed, Michael.
  • Daly, Jim.
  • Deasy, John.
  • Deering, Pat.
  • Doherty, Regina.
  • Dowds, Robert.
  • Doyle, Andrew.
  • Durkan, Bernard J..
  • English, Damien.
  • Farrell, Alan.
  • Feighan, Frank.
  • Fitzpatrick, Peter.
  • Flanagan, Charles.
  • Flanagan, Terence.
  • Grealish, Noel.
  • Griffin, Brendan.
  • Hannigan, Dominic.
  • Harrington, Noel.
  • Hayes, Brian.
  • Hayes, Tom.
  • Humphreys, Heather.
  • Humphreys, Kevin.
  • Keating, Derek.
  • Kelleher, Billy.
  • Kenny, Seán.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lowry, Michael.
  • Lynch, Ciarán.
  • Lynch, Kathleen.
  • Maloney, Eamonn.
  • Martin, Micheál.
  • Mathews, Peter.
  • McCarthy, Michael.
  • McConalogue, Charlie.
  • McEntee, Helen.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McHugh, Joe.
  • McLoughlin, Tony.
  • McNamara, Michael.
  • Mitchell, Olivia.
  • Mulherin, Michelle.
  • Murphy, Catherine.
  • Murphy, Dara.
  • Nash, Gerald.
  • Naughten, Denis.
  • Neville, Dan.
  • Nolan, Derek.
  • Noonan, Michael.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • Ó Ríordáin, Aodhán.
  • O'Dea, Willie.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Mahony, John.
  • O'Reilly, Joe.
  • O'Sullivan, Jan.
  • O'Sullivan, Maureen.
  • Penrose, Willie.
  • Perry, John.
  • Phelan, Ann.
  • Phelan, John Paul.
  • Ring, Michael.
  • Smith, Brendan.
  • Spring, Arthur.
  • Stagg, Emmet.
  • Stanton, David.
  • Troy, Robert.
  • Tuffy, Joanna.
  • Walsh, Brian.

Níl

  • Adams, Gerry.
  • Boyd Barrett, Richard.
  • Broughan, Thomas P..
  • Collins, Joan.
  • Colreavy, Michael.
  • Crowe, Seán.
  • Daly, Clare.
  • Doherty, Pearse.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Flanagan, Luke 'Ming'.
  • Fleming, Tom.
  • Healy, Seamus.
  • Healy-Rae, Michael.
  • Higgins, Joe.
  • Keaveney, Colm.
  • Mac Lochlainn, Pádraig.
  • McGrath, Finian.
  • McLellan, Sandra.
  • Nulty, Patrick.
  • Ó Caoláin, Caoimhghín.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • Pringle, Thomas.
  • Ross, Shane.
  • Shortall, Róisín.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Wallace, Mick.
Tellers: Tá, Deputies Emmet Stagg and Joe Carey; Níl, Deputies Aengus Ó Snodaigh and Richard Boyd Barrett.
Question declared carried.
Amendment declared lost
Amendments Nos. 2 and 3 not moved.
Bill received for final consideration.

As all the amendments have been disposed of, I ask the Minister when it is proposed to take Fifth Stage.

Question proposed: "That the Bill do now pass."

The Minister of State has wide skills.

On behalf of the Minister responsible, I thank the Deputies for their contributions. While this is a short Bill, the Minister has a particular interest in it, as do those who contributed. I thank all those who contributed, which always adds to the value of any item of legislation.

Question put and agreed to.