Dáil Éireann debate -
Thursday, 22 Jun 2023

Vol. 1040 No. 5

Local Government and Residential Tenancies (Amendment) (Carrigaline Rent Pressure Zone) Bill 2022: Second Stage [Private Members]

Deputy Donnchadh Ó Laoghaire

I move: "That the Bill be now read a Second Time."

I thank the Minister of State, Deputy Noonan, for his attendance. This legislation is somewhat peculiar. I am sure Deputies looking at the Dáil schedule will have wondered what it is and why we are discussing a local area. The reason is that this issue arose as a consequence of the way in which previous legislation was drafted. The Bill affects only two areas, to my knowledge, both of which are referenced. They are Carrigaline in my area and Clogherhead, County Louth. I believe the issue is perhaps more substantial in scale in Carrigaline but that does not make a blind bit of difference to renters in Clogherhead who could be affected to the same extent if they were asked for a rent increase of €200, €300 or €400, as they could be.

The Bill is fundamentally about people living in areas - little islands - surrounded entirely by rent pressure zones, RPZs, in which tenancies are controlled. These are highly competitive urban markets in which rents are rising quickly but because of the way the legislation is constructed, they cannot be captured by it. The first time I raised this matter was in 2017. At the time, I raised the anomaly that Carrigaline was split between two municipal districts. This caused the peculiarity that the southern side of the town, because it was in a different electoral area, was not in the rent pressure zone and hence the peculiarity. However, the electoral area issue was rectified and Carrigaline was brought into one electoral area. I am sure Deputy Nash can tell us later about the different movements in the Louth area. The area comprising the southern part of Carrigaline, from the bridge down, Crosshaven, Ballygarvan, Myrtleville, Fountainstown and some of the areas surrounding them is effectively in the Cork City rental market. Most of the people in this area look to Cork city to do business, work and so on. Most people working in the city look towards Carrigaline to rent or buy a house. For this reason, rents have risen to high levels. The larger part of the town was one of the first areas to be designated a rent pressure zone, along with the big city council areas of Cork and Dublin. Without rehearsing all the detail unnecessarily, as a result of redrawing, the smaller area of the new electoral area was brought in, but because it was the smaller area it was considered that the electoral area was designated. At that point, I began to raise the matter with Ministers arguing that all the surrounding area should be in the rent pressure zones. Subsequently, more electoral areas were designated pressure zones. I contacted the then Minister, Eoghan Murphy, the current Minister, Deputy Darragh O'Brien, and the Minister, Deputy Coveney, in whose constituency Carrigaline is located, although he did not have the housing portfolio at the time. When I raised this anomaly and asked what was going on, I was reassured time and again that if the rent increases are adequate, the legislation allows for the town to be captured and it will be brought into the rent pressure zone. However, as time passed and this did not happen, I investigated some more. I raised the matter with the Residential Tenancies Board, RTB, last year. The metric for bringing an area into the rent pressure zone is that the level of inflation must be above the national standardised average rent. I asked whether the breakdown went any further than electoral areas. I was told by Ms Gallagher of the Residential Tenancies Board that the local electoral area is the smallest area to which the RTB disaggregates the data. She could not tell me whether the RTB could do that if it were asked, and it had not been asked.

I already had the legislation drafted at that stage but that was the final proof I needed that this was a loophole and that there was no way for these areas to be captured. There are some areas in which small parts of previously designated rent pressure zones were in an electoral area that was subsequently designated a rent pressure zone. My belief is that because it was only a very limited part of the electoral area, the data were captured for the whole area and it was effectively treated as a new rent pressure zone.

This, on the other hand, is being treated as an existing rent pressure zone, with a bit added on and we are not sure what that is doing. That is what we need to fix.

I want to come back to what this means in real terms. I have given the background and some of it is probably a bit tedious and complicated for anyone listening in. In practical terms, what does this mean? It concerns a substantial number of renters, about 1,200. The best the Residential Tenancies Board, RTB, could give us was the percentages of renters in the electoral area who are in the rent pressure zone and who are not in it. It is about 1,200 renters, which is a lot of people. We have been contacted by people who have faced very substantial rent increases, way beyond the rate of inflation. Landlords know they can do this, they do it and they can do it because the competition in the rental market is so severe. People are facing increases of hundreds of euro.

In some ways I do not have all that much more to say. Carrigaline is a very popular place to live. It is a thriving community with more and more amenities, both public and private. It is an area with a very young population. I brought it up in respect of different issue during the week. Almost one in three of the population is under the age of 18, so it is a very young area. The pressure on the rental market is only going to increase. I take this opportunity to flag the fact that affordable housing is a big need there, particularly as the price of houses rises. The county council and the Minister of State's Department need to examine that. There is one scheme and maybe one more progressing over the next while but a lot more is needed in the area. It is in the county council area but, realistically, it is a well built-up urban area.

This problem is only going to become more severe. I understand the Minister of State is not going to oppose this Bill. I hope we can have his co-operation in trying to progress it and not just not opposing it going to Committee Stage. Whether it through this legislation, or residential tenancies legislation the Government brings forward periodically, we must get this enacted.

Tá mé ag súil gur féidir linn an fhadhb seo a réiteach. Tá réiteach á lorg againn do na tionóntaí i gCarraig Uí Leighin, i mBaile Garbháin, i mBun an Tábhairne, agus i mBaile Bhunáin. Tá brú millteanach ar na tionóntaí sna ceantair sin go léir ó thaobh cíosa agus caithfimid an deis a ghlacadh anois é seo a réiteach dóibh. Tuigim nach raibh sé ar intinn ag an Rialtas an fhadhb seo a chruthú. Is botún a bhí ann agus tarlaíonn sé sin. Nuair a bhítear ag iarraidh reachtaíocht a chur tríd, ní fheictear i gcónaí cad a tharlódh dá mbeadh athraithe i bpíosa reachtaíochta eile agus an tionchar a bheadh aige sin. Ní féidir linn go léir é sin a fheiscint. Cad is féidir linn a dhéanamh áfach? Is féidir linn réiteach a fháil air.

To wrap up, I do not mean to imply by any of this that rent pressure zones are the solution or that they are the be all and end all. They are an imperfect situation. Sinn Féin would like to see a rent freeze. As I outlined, we also want to see a huge upscaling of social and affordable housing construction. There is too much reliance on the private sector, including for the social housing need. We have a profound anomaly here. We have a real oddity and a situation where renters in Carrigaline, Fountainstown, Crosshaven, Ballygarvan and all those areas can face rent increases way out of proportion to inflation. This is happening. Landlords are inflicting these rent increases on renters. I hope the Minister of State will work with me. I am grateful to him and the Government for not opposing this legislation. I hope we can get this resolved for the renters in this area and in Clogherhead in County Louth and that we can get this fixed.

Minister of State at the Department of Housing, Local Government and Heritage (Deputy Malcolm Noonan)

Let me begin by thanking Deputy Ó Laoghaire for tabling this Bill for Second Stage debate, which the Government will not be opposing. As I understand it, the principle underpinning the Bill is to provide affordable, stable rents and rent certainty for tenants. I, and my Government colleagues, have worked since taking office to improve rent controls for tenants living in areas with high rental demand and facing the highest rents and sustained rent inflation.

In that spirit, the Government will not be opposing the Bill. However, it should be noted that, as currently drafted, the Bill has a number of technical and practical shortcomings which, if enacted, would have serious ramifications. Considerable action has been taken by successive Governments since 2016 to provide rent predictability in the private residential rental sector.

The rent predictability measure was introduced in December 2016 due to rapidly accelerating rental inflation in the sector and the need to control rents in certain areas with high rental demand. High rent inflation occurred on foot of a confluence of factors that resulted in an under-supply of both rental and owner occupier housing and growing demand for housing due to increased demographic household formation in a recovering economy after the financial crash.

The measure was implemented with immediate effect on 24 December 2016 in the administrative areas of the four Dublin local authorities and Cork city because they already met the criteria to be designated as RPZs. A further 50 local electoral areas, LEAs, and Kildare local authority area have since been designated as RPZs as their rent data met the criteria required under the Residential Tenancies Act 2004. This does not mean, and should not be taken to mean, that the Government is ignoring rent pressures in other areas. In fact, the law statutorily mandates both the Housing Agency and the RTB to monitor prevailing rents and report to the Minister, Deputy Darragh O'Brien, if an area should be designated as an RPZ.

I will go into some detail on this statutory process now. Section 24A of the Residential Tenancies Act 2004, as amended, provides that the Housing Agency, in consultation with housing authorities, may make a proposal to the Minister that an area should be considered for designation as an RPZ. Following receipt of such a proposal, the Minister requests the director of the RTB to conduct an assessment of the area to establish whether or not it meets the criteria under the Act for designation and to report to the Minister on whether the area should be designated as an RPZ. For the purpose of the Act, "area" is defined as either the administrative area of a housing authority or the LEA, within the meaning of section 2 of the Local Government Act 2001. There is no provision for any other type of area to be designated as an RPZ.

The criteria to be satisfied by an area under section 24A(4) of the Residential Tenancies Act 2004 for designation as an RPZ are as follows. The information relating to the area, as determined by reference to the information used to compile each RTB rent index quarterly report, shows that an annual rate of increase in the average amount of rent for an area is more than 7% in each of at least four of the six quarters preceding the period immediately prior to the date of the Housing Agency's proposal, and the average rent for the area in the last quarter, again as determined by reference to the information used to compile each RTB rent index quarterly report, is, in the case of counties Kildare, Meath and Wicklow or an LEA in any one of those counties, above the average rent in the State, excluding rents in the four Dublin local authority areas. In the case of any LEA outside of the greater Dublin area, for example, Dublin, Kildare, Meath or Wicklow, above the average rent in the State, excluding rents in the greater Dublin area.

Each RTB quarterly rent index report includes a summary table of the data of the most recent six quarters used to establish whether each LEA fulfils the criteria for designation as an RPZ. This ensures transparency in relation to the position of an individual area in terms of its average rent levels and increases over the last six quarters and provides clear and objective information to underpin the legal justification for the Minister to designate an LEA as an RPZ, having met the criteria under the Act. Approximately 74% of tenancies in the private rental sector are covered by RPZ designations. It is important to note that the RPZ designation process is deliberately transparent to prevent political interference in the designation of new RPZs. The Minister can only designate RPZs in the manner outlined just now.

Due to lower rents in rural parts of some local authority areas having a drag effect on the average rent, rents in a given local authority area as a whole may not have reached levels in excess of the national average. This is why we have put in place a mechanism to enable smaller geographical areas, the LEAs, to be examined against the designation criteria. Consideration was given to using data from smaller areas, such as electoral divisions, but the rent data is not statistically robust at a lower level.

With regard to Carrigaline specifically, and by way of background for the House, the former Ballincollig-Carrigaline LEA was designated a RPZ on 27 January 2017 in accordance with section 24A of the Act.

Subsequently, new local electoral areas and municipal districts were signed into law on 31 January 2019 for Cork city and county, which took into account the expanded Cork City boundary for the May 2019 local elections. The new LEAs and municipal districts effectively split the former Ballincollig-Carrigaline LEA. Ballincollig became part of Cork City Council, while Carrigaline and its hinterland are now contained within its own LEA and municipal district. The new Carrigaline LEA is wholly within the administrative area of Cork County Council.

The areas within the new Carrigaline LEA, which were designated as an RPZ under the old Ballincollig-Carrigaline LEA, remain designated as an RPZ under section 24A(6) of the Act, which provides that: "Where a local electoral area is prescribed by order as a rent pressure zone and, subsequently, any local electoral areas are duly amended in a manner that affects the area of the local electoral area so prescribed, then the order shall continue to have effect as if the local electoral area concerned had not been so amended." Under section 24A(6), therefore, areas already designated as RPZs will remain designated and areas that are not designated nor were due to become part of Cork City Council will retain their current undesignated status. Areas within the new Carrigaline LEA that were not previously designated as an RPZ remain undesignated.

The Residential Tenancies (Amendment) Act 2019 provides that any area falling within the new Cork City Council boundary, which was not already within an RPZ, became an RPZ from 31 May 2019. The data from the rent index report for the third quarter 2022 relating to the local electoral area of Carrigaline shows that while average rents in the Carrigaline area are above the non-GDA standardised average rent of €1,047.15, rent inflation in the LEA has been above 7% in just three, and not four, of the past six quarters. Accordingly, Carrigaline LEA does not fully satisfy the criteria for designation as an RPZ at this time. The Housing Agency will continue to monitor the rental market and may recommend further areas for designation. Where, following the procedures set out in the Act, it is found at a future date that additional areas meet the criteria, they will be designated as RPZs.

On an initial assessment of the Bill, section 2 presents the biggest challenge to the application of the existing rent controls, which are designed to avoid any political pressure for electoral boundary change. I accept that the Bill is put forward in good faith and I know the Deputy has been working on it for a considerable time. The section seeks to amend section 2 of the Local Government Act 2019 to include the new Carrigaline LEA within the boundary of Cork City Council, with the intent of being covered by rent controls. As I have said, the design of the rent predictability measure provides that any order designating an LEA as an RPZ should not be impacted by subsequent LEA boundary changes. Rent controls were designed to operate objectively, without political influence.

Section 2 would have far-reaching impacts for both Cork City Council and Cork County Council. Work on the Cork boundary alteration began in January 2015 and concluded in December 2020, which was a period of six years. It was a considerable logistical exercise that required careful evaluation and planning. The Bill, if enacted, would have serious ramifications for the two local authorities involved. I think the Deputy will agree is disproportionate to the intent of his Bill.

Section 3 proposes to amend section 24B of the Residential Tenancies Acts to require the Minister to designate the entirety of an LEA, post-boundary change, as an RPZ where a substantial area of that LEA has already been designated if the Minister is satisfied that to so designate would be fair and in keeping with the intent of Part 3 of the Acts.

Part 3 provides for rents and rent reviews including the RPZ rent controls, which are designed to operate objectively and without political influence. Accordingly, there is legal and political complexity involved and difficulties are likely to arise with the current wording of the Bill.

In conclusion, the Government is acutely aware of the difficulties faced by people in Ireland’s private rental sector. The Government will not oppose the Bill and will work with the Deputy, as he has asked us to do. The issue that he has raised merits careful consideration as part of the review of the sector, which is under way. The principle underpinning the Bill is not opposed by Government and it is in order for the Bill to proceed to pre-legislative scrutiny.

Deputy Ged Nash

I thank the Minister of State for his response to Deputy Ó Laoghaire’s very well considered Bill. The Minister of State acknowledged that this is an issue that the Deputy has been working on for some time and in good faith. As the Deputy indicated at the start of his contribution, there is a similar situation in my constituency. It is a matter that was raised with me a short number of weeks ago. While the Clogherhead electoral district is not as large geographically or population-wise as Carrigaline, and this issue does not impact as many people in Clogherhead as Carrigaline, it is nonetheless important. I think the Minister of State will acknowledge that as well.

Tenants in my constituency in the Clogherhead electoral district are affected by this anomaly. It has been rightly described as an anomaly. I do not think for one minute that the situation we are describing here today would have necessarily been on the mind of the drafters of this Bill originally. We need to find flexibility in how this issue can be addressed in good faith and to address the needs of those who have raised this issue with us. This is because there is an inherent unfairness. I think the Minister of State will accept the logic behind what we are trying to communicate here today and the purpose of this Bill.

The neighbours of the individual I have been dealing with, and indeed others who may be affected, in Clogherhead are able to benefit from the protection that being in an RPZ brings but because of this bizarre anomaly and the way in which the original legislation is constructed, they find themselves stranded on an oasis, as Deputy Ó Laoghaire described it, free of those protections. That bizarre anomaly in the local designation of RPZs has resulted in tenants in Clogherhead, which is just north of Drogheda, the largest town in the country and is yet to be designated as a city, facing some of the biggest rent hikes in the country.

I will explain the sequence here, and it is important to put this on the record. Clogherhead, thanks to a complicated sequence of events over the past six years, has fallen between two stools. It remains a tiny oasis for landlords who can, as the law prescribes, demand whatever they like in rent from their tenants while all around Clogherhead, in the Drogheda and Ardee electoral areas, tenants can avail of restrictions on rent increases by being part of a rent pressure zone. Renters in Clogherhead remain outside the rent pressure zone. It is essentially a free for all for landlords in terms of the rent they can extract from tenants in that area. It could be described as a bonanza.

This odd situation was brought to my attention by a local woman who is renting in Clogherhead and who is facing a staggering almost 60% rent increase over the next couple of months. I was shocked by her story and I decided to investigate how this could be possible. It was my understanding - and I had just assumed it was the case - that all of County Louth was an RPZ. Every electoral area in County Louth is a rent pressure zone, apart from this comparatively tiny electoral district of Clogherhead. We just made that assumption and it is fair assumption to make. The matter had not been brought to my attention before. I had tabled a parliamentary question on the issue, unaware of the work that Deputy Ó Laoghaire had been doing for a number of years on this self-same issue. I tabled that parliamentary question to the Minister for Housing, Local Government and Heritage, and the explanation for how Clogherhead found itself alone and outside the RPZ really beggars belief. It points to a fundamental flaw in the legislation that Deputy Ó Laoghaire’s legislation seeks to address sincerely and in good faith.

The principles of section 3 could be applied to the Clogherhead electoral district as well. They could address the problem I am raising. I will give the Minister of State some context because this is important so that people can follow it. I want to explain what happened over the past six years. The Drogheda local electoral area was designated as an RPZ in 2017. At that time, the Clogherhead electoral district was part of the Ardee local electoral area, which had not yet been designated as an RPZ. The Ardee LEA became an RPZ in 2019, but by that time, Drogheda LEA had been split in two and Clogherhead was transferred from the Ardee local electoral area to a new Drogheda rural local electoral area.

I hope the Minister of State is still following me. The problem with all this is that the Residential Tenancies Act, which lays down the criteria for being part of an RPZ, effectively freezes in time the make-up of a given LEA at the point it becomes designated as an RPZ, and therein lies the issue for tenants in Clogherhead. Put simply, Clogherhead was not part of any of the Drogheda LEAs when it became an RPZ and, subsequently, was not a part of Ardee LEA when it became an RPZ. As a result, it remains the only town in the region where renters cannot avail of the vital protections against the huge rent hikes in the way that all of its neighbours can.

The twin village of Termonfeckin is an RPZ. Right next door to it, Monasterboice is an RPZ. Tullyallen is in the Drogheda rural area RPZ, but Clogherhead is not. This needs to be urgently addressed. As a way forward, I suggest that any area transferred into an LEA that is designated as an RPZ would also become part of the RPZ. That should have been the default position when the original legislation was being drafted, debated and passed in these Houses. What we have now is these small islands of uncertainty for renters which leaves them vulnerable to excessive rent increases, which is way outside of the rate of inflation in terms of what landlords can do.

This kind of situation was never acceptable at any point and certainly could not be acceptable now when we face rent increases of up to 60% in a short period in the context of the cost-of-living crisis that we are experiencing and the housing crisis that we are also experiencing.

I took the time earlier today to look at daft.ie. We often peruse it on behalf of constituents who are looking for somewhere to rent given the very limited rental supply in our communities. In Clogherhead today, there is one property available to rent. It is a studio apartment for €1,000 per month. Effectively, my constituent is being asked to sign up to an enormous rent increase to remain living with her family in the area in which she was reared because there are simply no other options for her. She will be burdened with an enormous rent increase very soon. I think the Minister of State understands the logic of this and where this needs to go. For my constituent, a change to the legislation cannot come quickly enough because she is facing a rent increase after her notice period in August. From her point of view, we have two to three weeks to amend the legislation.

I do not detect that the Department sees this matter, whether it be Clogherhead or Carrigaline, as especially urgent. Not opposing the legislation is not the same as supporting it. The Minister of State says in his remarks that he is happy for this legislation to go to pre-legislative scrutiny. We simply do not know when that will happen. This is urgent. Deputy Ó Laoghaire has been raising this for several years. It is an area on which I have become much more knowledgeable because of the experience of my constituent. The default position simply could and should have been that once an electoral district is moved into an existing RPZ, tenants in the area are covered by the protections inherent in the RPZ legislation and the designation of that RPZ. That was the logical thing to do, and that is the principle against which this should be measured.

In conclusion, I will make a couple of points in response to the Minister of State's remarks and he might refer to them in his summing up. He says that for the purposes of the Act, "area" is defined as either the administrative area of a housing authority or an LEA within the meaning of section 2 of the Local Government Act 2001, and there is no provision for any other type of area to be designated as an RPZ. I can pretty much accept that. After what I have told the Minister of State about the entirety of County Louth - the local authority, which is the housing authority, as described in law - there is a means by which the Clogherhead electoral district could be designated as an RPZ. That would provide sufficient cover and support for the Minister to do that and it could not be defined as ministerial or political interference. There are two options here: it is either an LEA or, as described by the Minister of State in his remarks, a housing authority. A housing authority administrative area is the entire local authority administrative area, so this could be done on that basis. I ask the Minister of State to respond to that proposition.

Deputy Eoin Ó Broin

I thank my colleague, Deputy Ó Laoghaire, for yet again raising what is a very important issue. I want to put on the record my support for the propositions that Carrigaline and the electoral division of Clogherhead in County Louth would be included.

However, I want to disagree with both my own colleague and Deputy Nash from the outset. This is not an anomaly. As somebody who was here going through the detail of the legislation when it was introduced in very rushed and unsatisfactory form in 2016, and as somebody who has dealt with this very specific issue in respect to a portion of Limerick on the boundary of the city and county, and with respect to Waterford on the boundary of the city and county, this has been a feature of very badly designed rent regulation. When the then Minister, Deputy Coveney, introduced the legislation back in 2016, we highlighted a number of problems at that point which we said would lead to the very situation that both Deputies Ó Laoghaire and Nash have outlined today. The first is that if we only introduce rent regulation, it should apply to all renters the same. The idea that you would have a system where a renter who is in Dublin has a 2% cap and a renter somewhere else in the city or in the State can have no cap whatsoever and have rent increases of 20% or 50% - in some cases in Sligo recently, we saw 100% rent increases - is inherently unjust and unfair. We made the point to the Minister at the time and he simply refused to listen. In fact, we went one step further and said that if we create RPZs and then have areas immediately surrounding them that do not have those protections, as is the case in Carrigaline or Clogherhead, that will create a perverse incentive for landlords to increase rents above what would have been normally permissible for fear that at some point they might be caught by an RPZ.

What happened over the seven years since that legislation was introduced? RPZs have continue to expand in concentric circles out from the original designations of Dublin city and Cork city for that very reason. That is not a criticism of landlords. If you think you are going to face a cap in the future, it makes sense that you would try to increase the rent as much as possible beforehand.

A third issue is the question of the electoral divisions. It is simply not correct to say that we cannot have accurate data on rent changes in electoral divisions, particularly those that are on the edges of very large urban areas and, by extension, are becoming part of those urban areas, such as Carrigaline. Of course there are some electoral divisions where we cannot have a sufficient volume of rental tenancies to be able to have robust statistical data. I accept that, but there are other electoral divisions – Carrigaline is one where Deputy Ó Laoghaire rightly outlined the number of tenancies - where we can have robust data. How do I know that? It is because we asked the RTB that in committee at least four or five years ago, and it said it depends on the electoral division.

In addition to the very sensible suggestions Deputies Ó Laoghaire and Nash have outlined, I think we actually have to go one step further and fix this problem once and for all. While we will continue to press for rent regulation that applies equally to all renters, something the Government does not support, we will also continue to press for a ban on rent increases for all renters, which again the Government does not support. Something the Minister of State could support is amending the legislation and having an explicit provision so that where the RTB is satisfied that in an electoral division there is sufficient data to provide for a recommendation for the inclusion of an electoral division into an adjoining RPZ, it has the power to recommend that to the Minister. If we had done that, for example, when we first asked for it in 2017, those people in Limerick and Waterford, who for many years did not even have the paltry protection of the RPZs, would have been protected. Likewise, I think it would ensure that not only in the cases we have today but also in future cases because this is not going to go away and other areas will be affected. Therefore, I think Deputy Nash makes a very sensible suggestion in terms of the use of the existing provisions of the legislation to designate the entire local authority. That fixes that. Deputy Ó Laoghaire has provided a number of mechanisms for Carrigaline. Ultimately the legislation has to be changed. The reason it has not been changed is because it is such a minor technical change to the Bill, and very often they are the things that take the longest to fix.

It is not because I think anybody in government or in the Department is opposed to the proposition. I cannot count the number of times at committee that I and others have strongly recommended amending the existing legislation and empowering the Residential Tenancies Board subject to the availability of the data to recommend the extension of an existing RPZ into a neighbouring electoral division. It is possible and should be permissible and I urge the Government to take that approach.

While the Minister of State indicated his willingness to resolve this issue, he did not outline how he is thinking of resolving it because he is not proposing any changes to the legislation. Like other Deputies, I invite him in his wrap-up to tell us how he thinks this can be fixed and if the propositions put forward by Deputies Ó Laoghaire and Nash provide some mechanism to do that because we will be returning to this at the committee.

I am sure the Minister of State's attention has already been drawn to the report from Threshold that was published yesterday. The Minister, Deputy Darragh O'Brien, spoke lyrically about all the great things that he has done for renters over the last three years since becoming Minister for Housing, Local Government and Heritage. It is a pity he did not stop to read the key findings of the report before he told people what a good job he is doing because that is not the view of the renters who were surveyed for this important research. In fact, renters have never felt more insecure and renters have never faced such high rents.

I want to deal with two bits of the report relevant to this legislation. A very significant number of renters - about 50% - in this survey are paying more than 30% of their disposable income on rent. Those lower down the income scale are paying a higher percentage. That shows that even with a 2% cap, even if the 2% cap is extended to the areas we are outlining here, these are renters who simply cannot afford that. Given that the 2% can be rolled over year after year, resulting in a 6% or 8% increase all in one go, a 2% annualised increase is simply not acceptable at a time when rents are going to continue to rise because of the Government's housing failures elsewhere.

There was one very concerning finding in the report which is that a very significant number of renters in the survey who are living in rent pressure zones, 37%, have faced rent increases above the 2% caps. I am asking the Minister of State not only to respond positively to reasonable requests from Deputies today and in particular my colleague Deputy Ó Laoghaire who sponsored this legislation and raises this issue continually, and not only to outline how he intends to ensure the protections, poor as they are, within RPZs are extended to the good people of Carrigaline and Clogherhead, but I am asking him to go away and talk to his officials and the Minister about those 37% of people within rent pressure zones who are getting hit with rent increases above 2%. I suspect many of those are being hit with rent increases that are not permissible but they are too scared to raise that formally with the Residential Tenancies Board because of fear of losing their tenancy.

Therefore, we need greater resources for the RTB to be able to take its own investigations against landlords who breach those rules, including in cases where landlords are asking for larger under-the-counter rent increases above the 2% so that all renters have at least the protections that they are meant to have.

Ultimately, we need to go much further, as my colleague said. We need a three-year ban on rent increases. We need a refundable tax credit worth a full month's rent, not the €500 that is available to all renters. Crucially we need that dramatic increase in the supply of both social and affordable cost-rental homes. I know that is something the Minister of State believes in, but it is not something the Government is currently doing. We will argue that point on another day.

Deputy Ruairí Ó Murchú

I thank Deputy Ó Laoghaire for his significant work on this anomaly. I am afraid to call it an anomaly after what Deputy Ó Broin said. Deputy Ó Broin's point was that the rent pressure zone legislation and the rent pressure zones are a piecemeal solution that has failed to work across the board anyway. If we are serious about dealing with the problem for those in the rental sector and providing them with protections, it is exactly like Deputy Ó Broin said. We really need a three-year ban on increases. We need to make sure that we can put a full month's rental back in the pockets of those who must be under incredible pressure. I would have thought that a long time ago many more people would have found themselves unable to pay. I know a significant number of people are. It shows people's resilience and ability to get through the gap.

I looked on daft.ie within the last two weeks and I saw a house in my own locality with a rental cost of about €3,000. It had a number of bedrooms and was in a nice place and all the rest of it. However, if I had told anyone that a number of years ago, they would have laughed me out of the room. I agree with what Deputies Nash, Ó Broin and Ó Laoghaire have said. We need to see a solution from the Government. The Minister of State said he is not tackling the legislation; he needs to show us a solution to this problem because it is very straightforward. The people in Clogherhead and in Carrigaline ended up frozen in time which was unintended.

The real issue that needs to be dealt with is the complete disaster that is the rental sector. In the long term, along with those protections that we have been talking about ad nauseam in here, we really need to get down to increasing supply. I suppose here comes the single transferable speech that we need to get serious on the provision of public housing on public lands. We are talking about cost-rental, affordable and local authority housing. Deputy Ó Broin has referred to the need for 20,000 for a significant amount of time. We all know the targets that have been set. The Minister, Deputy Darragh O'Brien, and many others will give statistics on the magnificent work that has been done by the Government, but the problem is the people out there do not realise that because they are dealing with the reality of not being able to buy or rent a house, or are facing eviction. That is why the Government had to introduce the tenant in situ scheme. I was never quite sure whether that scheme was a real solution or was a debating point that was necessary to get through interviews. I will put it down to pressure brought by the Opposition which was really useful in the sense that in some cases we got solutions for those people who are facing eviction.

Louth County Council and others have engaged in the process of purchasing some of these houses. The longer this goes on and the longer this disaster relating to homelessness figures and all the rest of it go on, I am concerned whether the local authorities have the capacity to deliver on that because we are taking them from other sections. I think I have brought that issue up with the Minister of State previously.

It could be this legislation and-or another solution; nobody is wedded to a particular solution. We need to ensure that at least what limited protections there are for people in rent pressure zones should be introduced as soon as possible for those in Clogherhead and Carrigaline. That goes without saying. This is an issue that has gone on for too long. As we face into further boundary changes, many people in this House will be interested in the matter. I accept that this was an unintended consequence but it may have been down to rushed legislation that was not looked at closely enough. We have now seen a problem and like most problems we know it makes sense to deal with it. That is before we get into the major issue. This is not the first time we have been here saying that renters do not have the protections they need. As much as we would like those limited 2% protections that are provided by RPZs to be provided to the people of Clogherhead and Carrigaline, we really need to redraw that legislation in order to provide real protection to renters.

It has all been said. This will be the first time in my life that I will hand back close on five minutes.

Minister of State at the Department of Housing, Local Government and Heritage (Deputy Malcolm Noonan)

Before I come to the scripted closing remarks, I acknowledge the issues in both Clogherhead and Carrigaline. Within the comprehensive review of the rental sector, we will work with the Deputies opposite to try to address these two areas.

In terms of the rental increase that Deputy Ó Broin spoke about, it is the case that landlords can charge market rents in both areas. There is the ability for people facing large increases to bring a case to the Residential Tenancies Board and if the RTB finds in their favour, it can levy a significant penalty.

I took a glance at the Threshold report just this morning and there is no doubt it sets out the stark challenges. I agree with the Deputy that the Government is delivering on affordable, cost rental and social housing. We all agree that the increased supply of housing, in particular affordable, cost rental and social, will over time reduce rent pressures generally, and there has been some good news on commencements again today.

Deputy Ó Murchú referred to the tenant in situ scheme. It is a good scheme and it has had good uptake across the country, thanks to the proactive approach of local authorities.

As I have outlined, the Government does not oppose this Bill. However, it must again be highlighted that, as currently drafted, the Bill has a number of technical and practical shortcomings which, if enacted, would have serious ramifications. I accept that the Bill is put forward in good faith and I am sure the Deputy will accept that the implementation of the legal provisions to control rents must be above political influence, particularly in the context of boundary changes to electoral areas. The Government is happy for the Bill to proceed to pre-legislative scrutiny so that issues arising with its provisions can be carefully examined and the new Carrigaline LEA may well fully satisfy the criteria for RPZ designation in the future.

Section 2 of the Bill would have impacts for both Cork city and county councils, reaching further than I think the Deputy himself intends. As I said, the Cork boundary alteration process began in January 2015 and concluded in December 2020, a period of six years, and was a considerable logistical exercise that required careful evaluation and planning. The boundary alterations had major consequences for the operational arrangements of the local authorities and human resources and financial adjustments between local authorities, transfer of land and property and the transfer of rights and liabilities. The boundary alterations also required changes to the delivery of the full range of local authority services, such as housing, planning, road transportation, fire and emergency services, economic development, enterprise, recreation and so on, and required provisions to be made for the continuance of contracts and legal proceedings, application of development plans and local area plans, and requirements for planning applications, development contributions schemes, and so on, made by Cork County Council in respect of the transferred land area and the main revenue collection, with outstanding arrears of rates, housing rents and loans continuing to be payable to Cork County Council, and changes to the register of electors in polling districts. The Bill, if enacted, would have serious ramifications for the two local authorities involved and this would cause significant disruption to the operation of Cork city and county councils. Again, it is not something that the Deputy would intend to happen.

Since coming into office in 2020, the Government has sought to enhance rent predictability measures to improve affordability in the private rental sector. The Residential Tenancies (No. 2) Act 2021 introduced measures in July 2021 to extend the operation of RPZs until the end of 2024. The designation of all existing RPZs has also been extended until 31 December 2024. The Act provides that rent reviews outside of the RPZs can until 2025 occur no more frequently than biannually. This provides rent certainty for tenants outside of RPZs for a minimum of a two-year period at a time. The Act also introduced measures to better protect tenants with affordability by prohibiting any necessary rent increases in an RPZ from exceeding general inflation as recorded by the harmonised index of consumer prices.

I want to reassure the House and renters that the Government is taking measures that will deliver and make a very real difference in terms of housing affordability and quality of life. The myriad of actions committed to under Housing for All, which are supported by an unprecedented investment of in excess of €20 billion over the next five years, are having a positive impact and will grow in the short, medium and long term. Housing for All is a radical plan that sets out four pathways to a sustainable housing system. The updated Housing for All action plan at point 2.1 sets out a review of the operation of the private rental sector and a report on policy considerations ahead of budget 2024. My Department has commenced its review and this will involve consultation with public stakeholders in the sector, beginning this week and running for four weeks. The review will take into account the significant regulatory changes in the past several years and the Government will consider acting on its recommendations. The review will include a thematic review of the principal and relevant elements of the rental market, including the implementation of rent controls, and its conclusion will be utilised to inform the future policy direction of the rental market. The review will draw conclusions on how our housing system can provide an effective, affordable, viable, safe and secure framework for both landlords and tenants.

Again, I want to give assurance to the Deputy that we will work across the House to try to address these areas. I again thank the Deputy for bringing forward the Bill.

Deputy Donnchadh Ó Laoghaire

I appreciate the sincere approach to this legislation. I hope that we can build on this and that the officials from the Minister of State's Department might be willing to meet me to discuss this.

I am very familiar with the process of expansion of the city boundary and it certainly caused plenty of headaches and challenges, in my experience. It was something that needed to happen and it did end the partition of my own native Togher, which was split across two local authorities for 40 years. The intention was that the 2019 legislation was to designate the northern part of the electoral area as a rent pressure zone. It was purely for the purposes of rent pressure zones and nobody is, by any manner or means, looking to upend the current boundaries. However, if that is clumsily worded, it is something we can work towards.

The Minister made one point in his speech that comes back to the kind of answers I would have received in the past. He referred to the average rents in the Carrigaline area being above the non-greater Dublin area standardised average rent of €1,047. He stated that rent inflation in the local electoral authority, LEA, has been above 7% in just three and not four of the last six quarters and that Carrigaline does not fully satisfy the criteria for designation as an RPZ at this time. There are a couple of problems with that. This applies to over half and closer to two thirds of the area. I want to give a sense of how we got to figure of 1,200. The RTB is not able to tell us precisely how many renters are in the relevant part of the electoral area but it is able to tell us the number of tenancies in the whole electoral area, which is 3,394. It is also able to tell us the proportion of registered tenancies in both parts, and 35.4% are registered tenancies. Unless there is some strange anomaly and there is a greater congregation of tenancies in the northern part than the southern part, which I do not expect, then I think a figure of about 1,200 is a reasonable conclusion to draw.

To come back to the problems with that statement, if two thirds of the tenancies are in a rent pressure zone, to say it has been increasing in four of the last six quarters would be rather a damning indictment of the rent pressure zone, given the whole of the area would still be racing above the level at which it had to be so designated. The controlled part and the uncontrolled part together would have to be above the rate and the Minister of State can clearly see the problem with that. The second problem, which we have already covered, is that for the uncontrolled part, the data are not being collected for that part alone so we do not know if rent increases in that part have exceeded the rates required. The third problem is that we have now had four years of rent increases without any protection. For maybe the last 20 quarters, renters might have had the rate increases that would be required during the whole of that time but none of that counts towards the fact the rent is now at such an unsustainable level and could increase further. That is a problem. The fourth problem is that it was said that, accordingly, Carrigaline LEA does not fully satisfy the criteria. Strictly speaking, the majority of Carrigaline LEA is a rent pressure zone, so there are a number of problems with that approach.

How do we solve this? There are a number of ways. The electoral division approach is a potential solution in most instances. As it happens, this affects two electoral areas because most of the rent pressure zones, at least in a geographic sense and in terms of the territory covered, were designated after the last local elections and redrawn.

This is the first local election since 1999 that elections have subsequently been fought on the same set of boundaries twice. Will there be changes next time? There could be. If there is, and we still have the rent pressure zone system, which I think we will, then we could have much more substantial distortions and anomalies and whether we are using the word anomaly or not there will be distortions and peculiarities because we have a lot more rent-pressure zones now than we did in 2018 or 2017. This will reoccur unless we find a solution now. Electoral divisions might be part of the solution but I am not sure if it is the only part. The electoral divisions in my area are quite large. There are only about eight electoral divisions in the whole Carragline electoral area. I think the data is probably sufficiently robust. It might not be in other areas. Some electoral divisions are quite small and that might not be adequate.

I do not think I agree with the idea that it would constitute some kind of political pressure to say where an area is. I do not think it undermines objectivity. Maybe we have to define what "substantial" means. Perhaps that is the solution so that a substantial amount of an area is within a rent-pressure zone already then the remainder is so designated. Maybe that requires an additional bit of objectivity. If you can do that and you have an objective measure of what substantial is then I do not think it is in any way political interference because the local electoral boundaries are not decided politically. What we are trying to do is to respond to a situation where the rent pressure zones which were set on electoral boundaries set by an electoral commission were subsequently changed. What we are dealing with here is the knock-on of two sets of independent decisions outside this House, namely the boundary commission for the 2014 local election and the boundary commission for the 2019 election. All we are trying to do is put things right from the knock-on effects of those. I do not accept that it is in any way political interference. Maybe we have to define what "substantial" means or maybe there are other methods but I do not believe it is beyond us to find a solution. I hope the Minister of State will sit down with us and we can go through this.

Tá súil agam go mbeidh na hoifigigh sa Roinn sásta déileáil leis seo. Tá súil agam nach bhfuil siad den tuairim go bhfuil an t-ábhar seo chomh bheag sin gur féidir leis fanacht. Tá súil agam gur féidir linn réiteach a fháil air.

I am not precious about this legislation. I know from talking to Deputy Ó Broin that the housing committee is fairly backed up with legislation so if this finds itself in a residential tenancies Bill then that is fine with me. I do not mind what name is on it once we get a solution but it does not seem to be beyond us by any means to find a solution. Maybe defining what "substantial" is might be a more robust approach than electoral divisions. That probably needs a bit of figuring out. Is it possible that a very small area could be excluded after the next local election just because a small electoral division has been moved around? If so, what is the solution if the data cannot be gathered on that? We should probably explore that a bit more and hopefully we can do that. I thank the Minister of State and all the Deputies, Deputies Nash, Ó Murchú and Ó Broin, for speaking on this Bill.

Question put and agreed to.

Cuireadh an Dáil ar athló ar 5.54 p.m. go dtí 2 p.m., Dé Máirt, an 27 Meitheamh 2023.

The Dáil adjourned at 5.54 p.m. until 2 p.m. on Tuesday, 27 June 2023.