That leave be granted to introduce a Bill entitled an Act to amend the Residential Tenancies Act 2004 (as amended) to provide for a rent freeze for all existing and new tenancies.
Every Deputy in this House knows that rents are out of control. Average rent for new rentals across the State is currently €1,400 a month. In Dublin city, the figure is €1,700 and in south Dublin, including my constituency, entry rents are now, on average, €2,200 a month. For that to be affordable under the criterion used by Economic and Social Research Ireland, ESRI, that states rent should account for 30% of net disposable income, one would need a gross annual income of €85,000.
A growing number of people, many of them young but some at the later stages of their working lives, whose incomes are between €35,000 and €75,000 simply cannot afford to rent accommodation in our cities and, increasingly, in our towns. In fact, since this Government took office, average rents across the State have increased by €5,000 a year and, in Dublin, average rents have increased by €7,500 a year. That is an enormous additional financial burden on working families, young single people and, in many cases, students.
The cost of rent is having an impact on first-time buyers because struggling to pay such high rents means it is virtually impossible to save for a deposit. It is having a negative impact on the local economy. Much of the income being spent on rent would otherwise be spent in the local economy, in shops and services, particularly in smaller rural towns and villages. Employers are telling us that it is having a big impact on wage claims, putting many small and medium enterprises in very difficult situations.
It is clear from the three years' worth of Residential Tenancies Board and daft.ie data that the rent pressure zones are not working. They were designed to constrain rent increases to below 4% in high demand areas and they have consistently failed to do so. While many of us argued some years ago for rent certainty, linking rent reviews to the consumer price index in order to keep them in line with inflation, the situation has become so critical that we now need much more urgent and radical action.
For a number of years, Sinn Féin, along with other Opposition parties, has been calling for a freeze on all rents for existing tenancies and new tenancies. In our alternative budget for this year and that for last year, we called for a refundable tax credit to put a month's rent back in renters' pockets because freezing rents at such high and unsustainable levels in and of itself is not enough. We need to reduce rents as well.
The Bill I am introducing attempts to do both of those things. The Bill seeks to introduce an immediate rent freeze, with rents set according to the Residential Tenancies Board equivalised rent index for particular geographical areas for all new and existing tenancies. As the Leas-Cheann Comhairle knows, Opposition Members cannot introduce taxation measures but this Bill would oblige the Minister to bring forward a report within three months on the practicalities of introducing the refundable tax credit to put a month's rent back in renters' pockets, with a view to proceeding with that tax credit, subject to Government approval.
When we get to Second Stage, I am sure the Government will make the case it has made already, namely, that such a measure could deter future investment in the rental sector. The very opposite is the case. Rental yields are now at such highs, and institutional investors are able to avail of such generous tax breaks, that I do not see how a measure such as this would have any impact on them. More importantly, we have to give renters a break. Rents are too high. We have to stop them rising. We have to bring them down, and this Bill is intended to do just that.