That leave be granted to introduce a Bill entitled an Act to amend the Residential Tenancies Act 2004 (as amended) to provide for a prohibition on rent increases for all existing and new tenancies for three years.
Rents are too high in this country and too many people are paying too much money to keep a roof over their heads. Since 2016, when the previous Government's housing strategy, Rebuilding Ireland, was introduced, rents across the State have increased by an astonishing 40%. The average asking rent across the State is now €1,400 per month. The situation is much worse in Dublin, with rents increasing by an astonishing 70% over the same period and an average asking rent in the city and county of €2,000 per month. It is €7,500 a year more expensive to rent in Dublin today than when Rebuilding Ireland was launched.
While Covid-19 has shifted the focus of the debate to emergency measures to protect renters, the deeper structural problems remain. Research by the Economic and Social Research Institute, ESRI, shows that 70% of workers among the lowest 25% of earners have high housing costs, paying up to 40% of their take-home pay in rent. These people are not eligible for the housing assistance payment, HAP, or other rental supports. Even for those who can access such social housing supports, the impact of high rents means top-up payments are required in addition to the differential rent to the local authority. For example, the difference between HAP rates in Dublin and market rents is now €700 a month for a family and an astonishing €900 a month for a single person. The impact of high rents on people is immense. They have to choose, in some instances, between rent, heat and food. They have to work longer hours or, in some cases, get a second job. They must put off having children or buying a home and they are unable to save towards a deposit or for a rainy day. On the very hardest edge, high rents are increasing poverty and forcing some families and single people into homelessness.
We urgently need the Government to extend the Covid-related ban on rent increases. Given the significant anxiety among renters and landlords across the State, it is astonishing that the Cabinet made a decision in this regard yesterday but has yet to announce it. We also need to deal with the underlying problem of high rents. The Bill seeks to ban all rent increases for existing and new tenancies for a period of three years. Its provisions would apply to existing tenancies at the rate they are currently being charged and to all new tenancies on the basis of the Residential Tenancies Board rent index for the relevant area and property size. The ban will be reviewed annually and automatically expire at the end of three years.
As we have said previously, if Sinn Féin were in government, we would complement this measure with a refundable tax credit putting a month's rent back in every renter's pocket, as well as a major investment in affordable cost-rental accommodation on public land with rents of between €700 and €900 per month.
When we introduced similar legislation at the end of the previous Dáil, Fianna Fáil and Fine Gael said it would deter future investment and that it would be unconstitutional. Institutional investment in the private rental sector benefits from record high rents and excessively generous tax breaks, and preventing rents from increasing any further would have no impact on current levels of investment. Restrictive interpretations of the Constitution are too often used as a fig leaf by a Government that does not have the political will to act. While the Government is correct to take the advice of the Attorney General, it should also listen to the country's leading constitutional law experts. When the Government claimed our previous Bill was unconstitutional, Dr. David Kenny, who is an assistant professor of law at Trinity College Dublin and one of the authors of the country's leading textbooks on the Constitution, stated:
... there is an argument that the rent freeze bill violates constitutional property rights, but it is not at all clear that this argument would succeed.
There is a good chance that, in deference to the Oireachtas’ judgment and the scale of the housing crisis, that the courts would uphold the Bill.
Indeed, I cannot think of any Supreme Court precedent on property rights in the last 20 years that would suggest the courts would invalidate a measure such as the one under discussion.
Further, Dr. Rachael Walsh, who is also an assistant professor of law at Trinity College Dublin, said that "where a clear objective is identifiable for a restriction on the exercise of property rights that plausibly secures the common good and social justice and is procedurally fair, there is every chance of such legislation surviving constitutional challenge". Ultimately, the courts would decide the matter, so the real question is whether the Government has the political will to stand up for renters and go all the way to the courts to protect them from excessive rents.
This Bill is reasonable, proportionate, fair and, most important, absolutely necessary to protect hundreds of thousands of hard-pressed renters. I commend the Bill to the House.