I welcome the Minister, Deputy Eoghan Murphy, and his officials.
Residential Tenancies (Amendment) (No. 2) Bill 2018: Second Stage
We all know that we are in the middle of a serious housing and homelessness crisis. The early enactment of this Bill has been given priority by the Government and the Attorney General and facilitated by Deputies in all parties in Dáil Éireann and it now comes to the Seanad for its careful consideration. I thank Members for the time they are devoting to it this week in order that, hopefully, the Bill will pass both Houses this week. I will not pretend that this Bill will put an end to the current crisis. It will not, but it will definitely delay and has good potential to prevent homelessness for many households. The significantly extended notice periods for tenancy termination will afford tenants a greater chance to find alternative accommodation, with or without the support of a State scheme. The new powers for the Residential Tenancies Board, RTB, to investigate and sanction improper conduct by landlords will ensure that any rent increase in a rent pressure zone, RPZ, or any tenancy termination, is lawful. The RTB will have the choice at the outset to prosecute landlords for new related criminal offences through the courts rather than using its own new administrative sanctioning powers if it deems it necessary to do so. Neither the RTB, nor I, seek to criminalise landlords but if persistent and serious, unlawful conduct by landlords occurs, I think we can all agree that a criminal record, a fine and imprisonment might be the only appropriate course for the RTB to pursue. Under this Bill, all RPZs will continue in force until the end of 2021. If this Bill is not enacted, the RPZs or rent caps in the Dublin local authorities and in Cork city are due to expire in December of this year. Again, I think that we can agree that we still have high rents in those areas and in the other RPZs and that Government intervention is urgently needed to extend rent caps beyond the end of this year.
For the first time, new homes for the rental market and large institutional landlords will be covered by rent caps and associated regulation, which is significant. I will get into the detail of the Bill a little later but I wish to reaffirm for Senators that all of our efforts, as a Government and as an Oireachtas, are being directed towards solutions that will help bring the crisis to an end. Fundamentally, supply must be and is being increased, thanks to the policies the Government has pursued and is spearheading through Rebuilding Ireland. As supply increases, we must also ensure that we protect people who are currently struggling with housing affordability and security issues. That places a particular focus on the need to continue to reform the rental sector. The rental sector in Ireland still needs to develop and mature in order to provide a viable, sustainable and attractive alternative to home ownership, rather than serving as a temporary refuge or a staging post on the route to home ownership. The rental market here is not like that of other European countries yet. It is true that we do not have a mature rental sector but we are trying to transform the sector into a more mature European-type one, but we do so at a time of undersupply which makes it very challenging. We do not have a cost-rental market. In other countries, provision of cost-rental accommodation provides 20% to 25% of total accommodation. We are at the very early stages of building a cost-rental sector. If we get it right, the long-term benefits are obvious. What we do have is the Residential Tenancies Board, which provides strong protection to both tenants and landlords.
A professional landlord sector similar to other European countries is beginning to build in Ireland, but the majority of landlords, some 86%, own only one or two properties. Many are accidental landlords following the financial crash in this country, which is still having an impact today on housing, banking and public and private debt levels. The make-up of the landlord sector, with its heavy reliance on small and accidental landlords, has to be borne in mind. We must be careful in making changes to residential tenancy law, that the changes do not inadvertently cause an unsustainable exit of landlords from the rental sector, which would only make things worse. Recent data from the RTB tell us that landlords have left the market. More than 1,700 have done so since 2015. That is a real and legitimate concern that all of us must keep in mind as we progress new reforms in this sector that protect tenants. We must work with what we have and secure continued participation in the residential rental accommodation sector, as we improve and reform it. That will require participation from the traditional landlord as well as participation from the larger, institutional landlords, some of which have only recently begun to participate in the residential rental sector in Ireland. Such activity must be regulated and taxed appropriately. I accept that there is concern with regard to institutional investment in the sector and the Department of Finance and my Department will closely monitor developments in this area. At present, fewer than 5% of landlords own more than 100 units. The vast majority of landlords, or just over 70%, own just one property, with a further 16% owning just two rental properties. Official CSO statistics of the purchasing activity of institutional investors in 2018 will be available later in the summer but in 2017, the combined purchasing activity of property funds, real estate firms and real estate investment trusts, REITs, accounted for a net 1% of transactions. Crucially, institutional investment is adding to supply, and that is explicitly recognised and welcomed in this week's daft.ie report on the rental market. We must be careful and measured in our assessment of developments in the rental market. We need supply to grow.
Figures from the RTB show that more than 339,000 tenancies registered from both private and approved housing body landlords at the end of 2017. People are not renting solely because they cannot afford to buy a home, although I recognise that is a challenge for many in Ireland today.
Many are renting because they choose the flexibility that renting offers or because they do not want to take on the significant debt that is a mortgage, or the liability that home ownership can sometimes become. It is also true that Irish life is changing, and has been for some time. As far back as 1991, the level of home ownership started to decrease. Changes resulted in people staying in education longer, marrying or committing to a partner later and putting down roots in a community at an older age than in previous generations. These factors are also leading to a growing demand for rental properties, different types of rental properties from the ones that we may have seen before and a better functioning rental sector. Not only in our rental policy have we sought to meet this demand but also in the new planning and building guidelines that we have developed in the past 18 months around build-to-rent apartments, more cost-effective apartment delivery and the introduction of new concepts such as co-living. These reforms are now leading to an upsurge in planning applications for new apartments.
While it is the case that renting has been a negative experience for some and has not meant a secure and safe home, renting works for the vast majority, and we need it to continue to work, but to work better than it has been working, with greater transparency and accountability for tenant and landlord and, crucially, greater affordability.
Under Rebuilding Ireland, a rent increase restriction of 4% per annum was introduced in rent pressure zones, where very steep rent hikes arose on foot of particularly high demand. What we have seen in RPZs to date has been a moderation of rent inflation, particularly for existing tenancies, but rent inflation and rents themselves remain unacceptably high in many parts of the country. This is also having an impact on people's quality of life as they try to save for a home. They try to make unacceptable sacrifices to meet the rent or sacrifice time with their families by making long commutes because they cannot meet the rent closer to where they work. Others are living in overcrowded circumstances or have to move back in with parents at a time in their lives when they should not have to. Those really suffering have found themselves without a home and are in emergency accommodation today. There are too many in that situation. These scenarios demonstrate the importance of the Bill that we have before us.
The Residential Tenancies (Amendment) (No. 2) Bill 2018 builds on what has been achieved by the Residential Tenancies Acts and the RTB to date. The Bill provides for the future development of the rental sector, with stronger protections for tenants. The Bill centres on priority proposals in order to facilitate quick passage through the Oireachtas. It does not address everything that we need to do in the rental sector. I expect to submit a further rent reform Bill for pre-legislative scrutiny later this year. The Bill before Members today contains the priority measures that we believe are necessary and must be enacted now in the best interests of existing and future tenants. My colleagues in Dáil Éireann have helped prioritise its passage, and I hope Senators will agree that this Bill will improve the situation for many households and assist in having it put onto the Statute Book as soon as possible.
The Bill delivers on a number of commitments flowing from Rebuilding Ireland and the commitments made in September 2017 to provide the RTB with additional powers and resources to deliver enhanced protections to both tenants and landlords. The key measures and reforms are designed to enhance enforcement powers for the RTB; provide greater security of tenure for tenants; and further underpin the operation of the rent caps, along with some further targeted priority measures, including bringing student accommodation under the remit of the RTB, in addition to RPZs, and introducing amendments to the Planning and Development Acts to provide for the regulation of short-term lettings.
The Bill is set out in three Parts and 38 sections. I will now refer in some detail to the main provisions. Part 2 amends the Residential Tenancies Act 2004 and provides for a number of key changes. For example, sections 3 and 37 of the Bill are key provisions to apply the Residential Tenancies Acts to student-specific accommodation let under a tenancy or a licence to a student by a private provider or a public educational institution. I have worked together with the Minister of State responsible for higher education, Deputy Mitchell O'Connor, the Attorney General and members of the Oireachtas Joint Committee on Housing, Planning and Local Government to make this happen. I thank all involved, specifically student representatives and the RTB, for assisting to make sure that this important legal change has made it to the Seanad for consideration today. It is important that the rent increase restriction in RPZs apply in this sector and that there be recourse for students to the dispute resolution services of the RTB. Sections 4, 5 and 18 provide for consequential technical amendments required in the context of the student-specific accommodation sector.
Section 6 amends section 19 of the Act of 2004, which relates to rent setting by, among other things, modifying the exemption from the rent increase restriction of 4% per annum for dwellings coming onto the rental sector in an RPZ. Under the Bill, any dwelling being let that has not been let in the previous two years can set a rent that does not exceed the market rent level. Any rent increase thereafter cannot exceed the rent increase restriction of 4% per annum until after the expiry of the RPZ. This modification tightens the exemption in respect of new lettings and new landlords and should be effective in better restricting annual rent increases in RPZs.
We are inserting a definition of a "substantial change in the nature of the accommodation provided under the tenancy" in respect of which an exemption applies from the rent increase restriction or cap of 4% per annum to the extent that the works carried out to the dwelling concerned consist of a permanent extension that increases the floor area of the dwelling by at least 25%, improves the BER by seven ratings or results in at least three of the following: the internal layout of the dwelling being permanently altered; the dwelling being adapted to provide for access and use by a person with a disability; a permanent increase in the number of rooms within the dwelling; in the case of a dwelling with a BER of D1 or lower, an improvement of at least three ratings; or, in the case of a dwelling with a BER of C3 or higher, an improvement of at least two ratings. This definition is important and has been developed as the Dáil debates on the Bill progressed. The most recent changes relate to the BER improvements required. I am happy that the Bill recognises the importance of reducing emissions. I am also happy that tenants will see real benefits and real cost savings as a by-product of better restricting the use of this exemption. The provision makes clear that the exemption cannot be claimed in respect of works solely carried out for the purposes of compliance with regulations covering minimum standards for rented dwellings.
Landlords will now also be required to notify the RTB, and to provide supporting information, where they wish to avail of an exemption from the rent increase restriction. Also, three new offences are provided under section 6, namely, non-compliance with the rent increase limit provisions, knowingly or recklessly furnishing information to the RTB that is false or misleading in a material respect in a bid to claim an exemption, and non-compliance with the new requirement to notify the RTB of an exemption claim.
Section 20 of the Act currently provides that after 4 December 2019, rent reviews outside RPZs can again occur on an annual basis. Currently such reviews can only occur on a biannual basis. Section 7 of the Bill amends section 20 of the Act of 2004 to extend the provision for biannual reviews until 31 December 2021.
Section 8 of the Bill amends section 24A of the Act of 2004 by providing that the average rent criterion to be used for the purpose of qualifying an area within Kildare, Meath or Wicklow as a RPZ should be based on rents in the 27 local authorities outside Dublin and the average rent to be used for areas outside of the greater Dublin area, GDA, should be based on the rents in the 24 local authorities outside the GDA.
Currently, a single average rent is used for the entire country, and section 8 is intended to make it easier for areas to become a RPZ and to recognise the effect that rents in Dublin and the GDA have in raising the average rent level that must be exceeded. Section 8 also provides that existing RPZs shall now expire on 31 December 2021, irrespective of the expiry date placed on any RPZ designation order made to date.
Section 10 of the Bill inserts a new section 24BA into the Act of 2004 to provide that the administrative area of Cork City Council, which was deemed a rent pressure zone on 24 December 2016, shall include the area transferring from Cork County Council to Cork City Council on 31 May 2019. Some of the areas being transferred, in Ballincollig and Carrigaline, are already designated as RPZs.
Sections 12 and 13 of the Bill amend sections 34 and 35 of the Act of 2004 in connection with tenancy terminations. A registered architect or surveyor will be required to certify that any substantial refurbishment or renovation works cited as a ground for a tenancy termination would pose a health and safety risk to any occupants and should not proceed if the dwelling is occupied and that such a risk is likely to exist for at least three weeks. Once such works are complete, a re-letting must be offered to the former tenant, where contact details have been provided. Currently, such a re-let offer is only required where such works are completed within six months of the termination date. Where a landlord notifies of a tenancy termination grounded on his or her intention to sell the dwelling, this Bill provides that such an intention must be framed within the nine months following the termination date rather than the current three-month timeframe. The Bill also requires a landlord to provide a statutory declaration to the tenant that where he or she does not enter a contract of sale within that nine-month period, he or she is required to offer a re-letting of the dwelling to the former tenant.
Under the Bill, where a tenancy is terminated because a landlord or a family member wishes to occupy the dwelling, that dwelling must be offered for re-letting to the former tenant where they have provided contact details if it becomes vacant within 12 months of the termination, rather than the six-month period provided for currently. Also, where a tenancy is terminated because the landlord intends to change the use of the relevant property and where the tenant has provided contact details, the landlord will now be required, within one year of the termination, rather than within the current six-month period under the Act, to offer a re-letting of the dwelling to the former tenant. A landlord will now also be required to copy the RTB with a termination notice within 28 days after the termination notice period expires. This will assist the RTB in the operation of its new investigation and sanctioning power under section 28 of this Bill.
Section 15 of the Bill inserts a new section 64B into the Act to clarify that the combined duration of any Part 4 tenancy and any subsequent further Part 4 tenancy should count in the “duration of tenancy” used in calculating the termination notice period to be given under the tables to section 66 of the 2004 Act.
Section 16 of the Bill amends section 66 of the Act of 2004 to increase significantly the notice periods a landlord must provide in serving a notice of tenancy termination to any tenant who has occupied a dwelling for more than six months and less than seven years. For example, for any tenancy of a duration longer than three years and less than seven, the tenant is entitled to 180 days' termination notice, which is approximately six months' notice, representing an increase of almost 100 days' notice for some tenants. These longer notice periods should take some of the pressure off tenants at what can be a very stressful time. Section 16 also specifies 28 days as the minimum notice period applicable to tenancy terminations by a landlord or tenant in student-specific accommodation.
Sections 19 and 20 technically amend sections 93 and 109, respectively, of the Act of 2004 to empower the RTB to charge for its mediation service. There are no plans at this time to charge for its mediation service, but there is a recognition that it is a costly service for the RTB to provide and that cost recovery may be required in the future.
Section 21 technically amends section 123 of the Act of 2004 to make it mandatory for the board to publish its determination orders and notices of cancellation thereof. The board currently has the option of publishing. The amendment aims to enhance transparency.
Section 22 amends section 134 of the Act of 2004 to require the annual registration of tenancies with the RTB. The aim is to gather accurate and detailed tenancy and rental data on an annual basis.
Sections 25 and 26 amend sections 137 and 137A, respectively, of the Act of 2004 to provide for the RTB to charge a €40 fee for annual registrations of tenancies. A reduced registration fee of €20 applies for approved housing body, AHB, tenancy registrations by an AHB. A late fee of €10, or €5 for AHBs, will apply for each month a tenancy remains unregistered.
Section 27 inserts a new section 144A into the Act of 2004 to empower the RTB to pursue updates to its register from landlords on rent alterations related to tenancies in their dwellings. A new criminal offence is created for non-compliance with the requirement to update rent information on the RTB register. The contravention of the requirement under section 139(1) of the Act to update the RTB on rent alterations is also listed in the new Schedule 2 as improper conduct by a landlord which will be subject to the sanctioning regime under the new Part 7A of the Act.
Section 28 inserts new sections 148R to 148AG, inclusive, into the Act of 2004 to form a new Part 7A dealing with complaints, investigations and sanctions. This is the key section of the Bill, providing the RTB with its new administrative investigation and sanctioning powers. The RTB is empowered to initiate an investigation with or without a complaint being made by the public of improper conduct by a landlord under the Act. Oral hearings on improper conduct may take place. Sanctions may be imposed that take into account the nature of the improper conduct in question and may comprise one or all of the following: a financial penalty of up to €15,000, payment of RTB investigation costs up to €15,000 and a written caution. The section provides for a right of appeal to the Circuit Court against a sanction. If no appeal occurs, the section requires the Circuit Court to confirm all sanctions.
Section 29 technically amends section 151 of the Act of 2004 by extending the functions of the RTB to include the investigation of landlords and the imposition of sanctions in accordance with the new Part 7A. As Minister, I will be legally required by this amendment to report to the Houses of Oireachtas on prevailing rent levels in the private rented sector based on 12 months of annual registration data collected by the RTB.
Section 30 inserts a new section 164A into the Act of 2004 to provide for the appointment of authorised officers and decision makers by the RTB and the creation of a panel of authorised officers and a panel of decision makers for the purposes of implementing the new sanctions regime under Part 7A.
Sections 31 and 32 provide for minor technical amendments to the Act.
Section 34 inserts a new Schedule 2 into the Act of 2004 which details the improper misconduct by a landlord in respect of which investigations may be caused under Part 7A, including non-compliance with the rent increase restrictions; non-compliance with the new requirement under the Bill for a landlord to notify the RTB where he or she wishes to avail of an exemption from the rent increase restrictions; seeking to rely on an exemption from a rent increase restriction in respect of a dwelling that does not comply with the exemption requirements; non-compliance with the requirement to register a tenancy; non-compliance with the requirement to update the register with particulars of rent alterations; false or misleading citations of tenancy termination grounds in tenancy termination notices; and a failure to make re-letting offers to former tenants where required to so do in accordance with the new provisions we have included surrounding re-letting offers.
Section 38 inserts a new section 3A into the Planning and Development Act 2000 to provide for the regulation of short-term lettings, proposals which are aimed at addressing the impact of short-term letting on the private rented housing market in areas of high demand. In that regard, it provides that the short-term letting of a house in a rent pressure zone is a material change of use. Accordingly, planning permission is required, unless a specific exemption applies. The Bill provides me, as Minister, with specific regulation making powers that will enable planning authorities to require persons involved in short-term letting in rent pressure zones to provide specific and specified information for their local planning authority. A contravention of a requirement of such regulations will be an offence and subject to a summary fine of up to €5,000.
Short-term letting is defined in the Bill to mean "the letting of a house or part of a house for any period not exceeding 14 days, and includes a licence that permits the licensee to enter and reside in the house or part thereof for any such period in consideration of the making by any person (whether or not the licensee) of a payment or payments to the licensor". The provisions in the Bill related to short-term letting will be supplemented by exempted development planning regulations which will clarify that home sharing and limited short-term letting in a person’s principal place of residence will be allowed in rent pressure zones to an annual cap of 90 days without the need for planning permission. As required by the planning code, the regulations will be brought before the Oireachtas for approval before signature. Accordingly, there will be an opportunity to discuss the short-term letting regulations in detail with the joint committee before they come into effect on 1 July. These proposals strike a reasonable and appropriate balance between alleviating the impact of short-term tourism letting on the private rental market and facilitating tourism letting where private rental need and housing demand are not acute. I trust they will receive the support of the House.
In addition to the changes being ushered in by the Bill, the RTB is actively pursuing a range of modernisation initiatives and being better resourced to deliver enhanced protections to tenants and landlords. The proposed new powers for the RTB under the Bill are a crucial step in expanding its overall role and functions as part of a multi-annual change management programme to enforce tenancy law proactively within the residential rental sector. Budget 2019 provided for a 67% increase in Exchequer funding to strengthen the RTB's powers and provide for greater local authority inspections in the residential rental sector. The Bill represents a significant evolutionary step in the development and enforcement of residential tenancy law. The introduction of powers through the Bill for the RTB to sanction improper conduct by landlords who flout the rent increase restrictions in RPZs and tenancy termination procedures should deter such conduct and protect tenants. I do not want to see landlords sanctioned or criminalised, but I want the RTB and the courts to have the power to do so, if required. Landlords who conduct their affairs lawfully have nothing to fear. I do not want to deter investment in the rental sector, particularly during a housing and homelessness crisis, but I do want to prevent homelessness. Every section of the Bill protects tenants. The Government has to step in to protect the most vulnerable. A household facing homelessness because of an illegal rent hike simply deserves better protection. I commend the Bill to the House as an important and necessary step to strengthen and enforce security of tenure for tenants.
Although I recognise it is not normal conduct of business to take the Bill in one week as proposed, the importance of the legislation and it being brought into effect as quickly as possible speaks for itself. Any further unfortunate delay would have a consequential impact, particularly on our ability to commence the regulation of short-term letting on 1 July as proposed and agreed to in the Dáil and on Committee Stage. Senators have performed due diligence on this issue. The Minister of State, Deputy English, and I have appeared many times in the Seanad to deal with housing issues. On many occasions we have discussed the challenges of affordability and insecurity of housing facing those who are renting who sometimes, unfortunately and unacceptably, find themselves homeless, as well the challenge of getting short-term letting stock back into long-term letting stock. All of these issues have received a great deal of scrutiny in this Chamber and at the joint committee. The Bill has been subject to a great deal of scrutiny and it is imperative that it now be passed by the House in order that it can be enacted and we can proceed to have the new laws in place to protect tenants and, crucially, that on 1 July we can begin to get short-term letting rental homes back into the long-term rental market in rent pressure zones where the demand is highest and they are needed most.
Group spokespersons will speak first.
It is good to have the Minister in the House. I have great concerns about particular issues he raised. On rent pressure zones, it worries me that County Carlow which has two of the best third level colleges in the country is not included among them. The issue has been raised with me on numerous occasions and I am weary asking the Minister why it is the case. I will return to the issue, about which I have massive concerns. It is one of the biggest in the context of the Bill.
It now costs more to service a rental bill than a mortgage. This situation where massive portions of take-home pay are being devoured by skyrocketing rents must not continue or it will cost far more in the future. According to today's edition of The Irish Times, the number of landlords increased by almost 350 in the past year, in spite of warnings that many landlords were afraid to re-enter the market owing to new regulations and that we had to exercise caution in that regard. The article referred to figures compiled by the Residential Tenancies Board which revealed an average monthly rent payment of €1,366 in January 2019. It also referred to data from daft.ie which indicated that only 2,700 homes were available to rent on 1 May, the lowest figure recorded in 13 years.
There are massive issues in the rental sector and we need legislation to respond to them. Fianna Fáil supports the legislation which draws on the Bill published by it which aims to strengthen the RTB to hold landlords to account and expand the rent pressure zones designated period for a further three years, particularly in the case of student accommodation, which is very important.
It is not enough. This Bill does not go far enough at all. I have massive concerns. Much more needs to be done to get to grips with the rent crisis. We need to move to a system of building more homes. We are talking about local authorities, rent pressure zones and various agencies, including the RTB, but unless there is supply, it does not matter how much legislation we bring in, it will not work. We have to try this in the short term, but we need to do it. With regard to allowing for long leases, we need to support landlords but also tenants. We seem to be borrowing pieces from the rental systems of every other country, but we have our own system here and we need to find solutions for our own country. I welcome the move to apply the rent pressure zone regulations to student accommodation and plans to roll out rent transparency. I see the Minister is rolling this out in Dublin and in other areas, but he needs to confirm whether it will cover my own area, about which I have massive concerns.
Much more is needed if the national scandal of homelessness is to be addressed. We need additional investment in a cost rental system that will offer accommodation to workers on ordinary incomes who fall above the threshold for social housing but who are crippled by spiralling rents. Further practical steps such as a national rent deposit scheme, local authority quality certificates for accommodation and incentives to provide accommodation above shops are also required. That is so important. There are vacant units over shops in our towns and villages that could be used as rental accommodation, but the incentive is not there and no proper scheme was put in place so landlords did not take the opportunity.
Dublin remains the most expensive place to rent with average monthly costs now at €1,620, representing an increase of €141 on the same period last year. According to the daft.ie report, Dublin rent levels are now 36% higher than they were during the previous boom more than ten years ago. Rent pressure zones have not been effective because the underlying problem of lack of supply remains and because these zones were self-policed. It was unrealistic to expect tenants to argue with a landlord over prices they were quoted. We need a radical overhaul.
I welcome this Bill as it strengthens tenants' rights by empowering the RTB and making rent levels more transparent. Again, however, supply is the key and addressing this issue is the only way forward. We cannot operate on the basis of catching up. Our rental sector is relatively young and we are learning as we go, but we need to step up the pace. This Bill will not, by itself, solve the rental crisis. Ultimately, boosting supply will be critical to meet the growing demand, particularly in areas hit by the housing crisis but also throughout the country.
Budget 2019 was not a landlord's budget. Our rental market needs landlords if it is to work. It does not incentivise landlords to stay in the system. Some 40,000 landlords left the system from 2012 to 2018, 4,000 of whom left in the past 12 months. We need to keep these in the system or there will be fewer units available to rent and rents will rise. Mortgage interest relief is targeted at small landlords with two units or fewer to keep them in the system. We need additional tax measures such as local property tax relief and commercial rates relief for accommodation above shops to keep them in the system. The Minister needs to give some incentive in this area and he is not doing so.
The Government has been playing around with a cost rental pilot project since 2015 but has not put a single brick in place yet. This needs to be escalated and expanded to allow workers on ordinary incomes to access quality and affordable accommodation. A national deposit scheme would help avoid disagreements with landlords over deposits while a quality accommodation certificate would boost the quality of the rental stock.
I am happy to support some of this Bill. More needs to be done. There are so many questions. Why are some areas in rent pressure zones and others are not? I have asked several times why accommodation in some counties qualifies when neighbouring accommodation across the road in another county does not. The RTB has been very helpful but it needs more powers. How many staff has the Minister given it? Who is going to enforce this legislation? When we introduce Bills, we need to make sure they are enforced. It has always been the same. People who had spent longer than three or four years in a rented accommodation were always entitled to six or seven months' notice if they were to be evicted. This notice could not be given on a normal piece of paper. It had to be given through a solicitor or the courts. That has always been part of the legislation, but it has never been enforced. We need to start enforcing tenants' rights. We have good tenants and good landlords but we have to solve our housing crisis.
We have a massive housing crisis. The Minister is trying his best to solve some of it, but if he does not put rent pressure zones in every local authority and if he does not give more staffing to the RTB, this will fail. One of the biggest issues that the Minister is not addressing, and I have said this on several occasions, is the need for local authorities to have more power. Most local authorities have no power anymore. The Minister needs to give them power and to make sure they have enough staff to check accommodations. There is not enough. The Minister should put more money into the issue and should be able to come back in six months with figures for how many houses the 31 local authorities have inspected. That is not happening. In fairness to the local authorities, they are doing their best but the Minister needs to step in. We can bring in all the rules and regulations we like, but unless the Minister sorts out rent pressure zones in every local authority area, gives more power to the RTB, makes sure these provisions are enforced by tenants and landlords, and allows local authorities to play a bigger part, we will have an issue.
I do not want to be negative. There are good parts to this Bill. We in Fianna Fáil will be tabling some amendments tomorrow, for which we will be seeking the Minister's support.
I welcome the Minister to the House. As the previous speaker said and as the Minister has acknowledged, this Bill is dealing with a crisis. There is a shortage of living accommodation in Ireland and the result of this has been monstrous increases in rent in some parts of the country. That is a fairly obvious consequence of the lack of housebuilding, homebuilding, and apartment building we have seen in recent years, coupled with an increasing population in urban areas and transport difficulties. All of those things are entirely predictable. It is our response to them that has to be measured and careful.
I have a slightly different perspective from that of some other Members of this House. I have been in the position of being a landlord of an entire house, which was furnished to a very high standard. It was furnished even down to cutlery and teaspoons and all of the furniture was of high quality. I will make one point. That is an entirely different situation from the so-called Vienna policy about which we have been hearing recently. Under this policy, people will build apartments and let them to another for 20 or 30 years. Some people want to build high-quality executive houses to let out to others on a short-term basis and to have remedies. Others want to build an apartment block such as those we formerly had in the Mespil flats and to accept less than the ultimate market rent to have a steady income from an investment in an apartment block. Real estate investment trusts, REITs, are doing that. I strongly believe that we need a system that differentiates between the two. If people are given long-term leases on apartments by real estate investment trusts, those people have different expectations from those of somebody who lets a house for a year as an executive. They will have different expectations in respect of the standard, the fitting out, and who is going to repair the washing machine and so on. They are totally different worlds and we have to have different sets of landlord and tenant law to deal with them. One of the problems is that the RTB has been asked to deal with everything on the basis of more or less the same rules applying to everything. That is a mistake.
In making my second point I again speak from personal experience. I was brought up in a rent-controlled house. My father voluntarily increased the rent on a house on a third of an acre on Leeson Street from £120 to £240 per annum. I know what controlling rents can do in the end - such measures were declared unconstitutional - but one has to look at the underlying economic forces in a society when one is dealing with this issue. One cannot be like King Canute and try to freeze or hold things down unnaturally when there is, for instance, increasing demand for property in Dublin from an increasingly prosperous population, which is growing.
That is going to be difficult and things cannot just be frozen as they were. On the other hand, it is wrong to allow landlords to gouge people. There were photographs in today's edition of the Irish Independent of houses with six bunks in a bedroom and the fact that people are letting premises like that is wrong and shocking. I am not saying that it can be dealt with by a single-size-suits-all arrangement.
What Senator Murnane O'Connor has just said is true. Landlords are leaving the pitch. Small landlords are saying this is too much. Every tenancy must be registered every year from now on, even if it is just rattling along. How much will that cost? Will it be €75 or €100 or €120?
We are reducing it to €40.
That is good. It is fine if the Government is doing that but it is wrong if that is being used to increase the take.
Perhaps I am missing something in section 38, which states, "The use of a house or part of a house situated in a rent pressure zone for short term letting purposes is a material change in use of the house or part thereof, as the case may be." The definition of short-term letting is described as, "the letting of a house or part of a house for any period not exceeding 14 days, and includes a licence that permits the licensee to enter and reside in the house or part thereof for any such period in consideration of the making by any person (whether or not the licensee) of a payment or payments to the licensor".
I fully understand that is supposed to get at Airbnb. However, Senator Humphreys and I know of modest people who live on Serpentine Avenue and take in lodgers for the horse show and things like that.
It does not affect them.
How does it not affect them?
They are primarily resident there and rent out a room. It is still their primary residence.
We will get a definitive response.
Does it not apply to a primary residence?
Home sharing is allowed; short-term letting is not.
I see. Fair enough. The most important thing in the Bill, and I support this strongly, is the introduction of administrative sanctions and penalties but they must cut both ways. If a landlord is behaving appallingly, there should be sanctions against that landlord. If a tenant is behaving appallingly, there should be some form of fairly quick sanction. I received an email to my office today relating to tenants who were told to go 14 months ago and are still there and asking to be taken to court.
This deals with the kinds of people Senator Murnane O'Connor was talking about. If we want someone anywhere in the county to provide a house or two flats to other people by way of private rental dwelling, they must be provided with decent remedies. They cannot be allowed to be brutalised or to find their place completely messed up and to have virtually no comeback.
It is the fashion of the day to sympathise with tenants and show little sympathy to landlords because a minority of landlords gouge their tenants. I agree with having sympathy for tenants but the great majority of landlords that I ever met would take far less than the market rent if they got a satisfactory tenant who made life easy. The Minister's Department should be very careful about the role of buy-to-let landlords. They are important and will continue to be.
A previous Minister, John Gormley, decided he would get rid of bedsits and threw petrol on the flames of homelessness in Dublin despite his brilliant intentions. One of the most amusing aspects of that was that bedsits were made illegal if they had shared kitchen or bathroom facilities. Of course, there was a simple loophole in that whereby the landlord could let the whole house out to all of the bedsit tenants, making them joint tenants of the whole house, without changing anything. In the meantime, 10,000 people lost their homes.
I saw on the news yesterday evening that it is significantly cheaper in Sandyford in Dublin, if one can get a mortgage, to buy a house and pay the building society or the bank the repayments than it is to rent. We have to be very careful about whether these measures, well-intentioned as many of them are, will not make it increasingly unlikely that private landlords will stay in the market. We are not continental Europe. The Vienna solution is not available for the great majority of Irish people. We have a different problem on our hands if we drive people out of the market, as is happening now. Rents in Dublin have gone to an all-time high but the amount of houses available for rent has plummeted to an all-time low. There are some iron rules of economics which cannot be ignored.
I also welcome the Minister and his officials to the House. I believe the Minister will hear a balanced debate on this important topic. The Minister needs and deserves our supports in all of his efforts to increase housing output, residential and rental, and that is acknowledged by the contributions of all Members, Opposition and others. The Minister will hear various proposals in this House that will assist him in that. I know the Minister is doing his utmost to prevent further homelessness. He wants to achieve the objective of a sustainable, normalised rental market. All of us in this House must do all in our power to help him to protect and sustain long-term tenancies.
The RTB has been mentioned and it plays an important role in terms of registration, monitoring compliance and adjudicating disputes. Positive strides have been made to adequately resource the RTB, to allow it do its work in adjudicating and making effective and early decisions where it must and that is important.
I am concerned that 1,700 landlords have left the market since 2015. There are reasons for that which we must understand. I have no doubt there are many rogue landlords and we must acknowledge there are also rogue tenants. We have all heard horror stories from both sides. It is important that all landlords and tenants are not tarred with the same brush when people step out of line. As other contributors have stated, we must be careful that legislation is seen as fair and addresses the societal challenges we face in housing and rental in the current climate.
We all recognise there is a rental crisis at the moment. That is why we have designated rental pressure zones. We must therefore respond and that is why I support the legislation before the House tonight. We should review the legislation after two or three years, by which stage, hopefully, the housing output will be continuing to increase and the market will be normalising. I am interested to hear the Minister's views on that.
The Bill will enhance powers to investigate landlords and impose sanctions for non-compliance, as it should. Standards and regulations are set down to protect tenants but I agree with Senator McDowell that, while sanctions apply to landlords, there should also be sanctions for tenants when they step out of line, are not being fair or reasonable, are not respecting property or the tenancy they are offered. The RTB might have a role in that if it is empowered correctly. It is important to recognise that it works both ways.
The Bill also ensures that annual registration by landlords of tenancies are kept up-to-date in terms of records.
I have heard Senator Humphreys raise the issue of Airbnb and how it is affecting long-term tenancies on numerous occasions in this House. The Minister also understands the pressures that is bringing. This Bill will also regulate short-term lettings in rental pressure zones. It will address rental properties in these zones with rental periods of fewer than 14 days, which essentially intends to address the Airbnb issue where good rental properties are possibly being taken up with short-term lettings.
I understand why people might want to do that, but we have a crisis and we need to respond to it. This is a resource that is available to us to try to respond to that crisis. It is a mechanism and a measure being introduced in legislation in a crisis by the Minister to try to address that, and that should also be acknowledged. The Minister said he hopes it will be implemented by 1 July, and he also committed to the House that the regulations for short-term letting will be consulted in the Oireachtas joint committee. I welcome that approach because a wide range of views will be heard there as well.
Legislation must be fair in how it deals with both landlords and tenants. We have to be concerned when landlords are leaving the market, because the fewer landlords we have, the fewer tenancies that will be available for people who need them. It is important that we see increases in housing output in both the private and public sectors, and we need to ensure that continues. We all acknowledge that there is a scarcity of properties, as well as upward rental pressures, which are beginning to level off, which is welcome. I note recent by the economist, Ronan Lyons, in which he said that the solution to this is to encourage private developers to build and institutional investors to become landlords. The alternative view to that from various housing associations and social housing advocates is that housing should be provided mainly and only by the State. I believe that the solution is in the middle. It is a balance of both, where we need to see more private residential development and more social housing developments. Rebuilding Ireland is the plan that will address that, and it is beginning to become fruitful. We can see that from the numbers, and the thousands of houses that are becoming available year on year, but that needs to continue.
I need not tell the Minister about the increases in rent in rental properties nationally. The national average is now at €1,366, and it is much more than that in Dublin. In Waterford city, the average is €972 per month, and it is €847 per month in the county. The concern is that rent is now becoming more expensive than actual mortgages, and that has to be a cause for concern. It is not normal, and we therefore need to look at new mechanisms, which I know the Minister is doing all the time, in terms of affordable housing for both purchase and rental.
I wish the Minister well. I know there will be criticisms of the legislation but people should understand that it is a response to the crisis we are in. We are being innovative in trying to leverage properties that are there but are, unfortunately, not available due to short-term letting, and trying to make them available for long-term lettings. That is to prevent homelessness, essentially, and to try to make renting more sustainable in this country. I support the Minister in his efforts, and I hope the House will as well.
Sinn Féin welcomes the Bill and will be supporting it. I am disappointed, as ever, when we have to submit amendments quite rapidly or before Second Stage is finished, but I will not dwell on that tonight. There is much more that needs to be done, both within and beyond this Bill. We saw from yesterday's daft.ie report that the average rent in Dublin hit over €2,000 for the first time, and it has been on the rise for 31 quarters now. That highlights the inconsistency and non-compliance with rent pressure zones, RPZs. The report also highlighted that there were just 2,700 homes available to rent nationwide on 1 May, which is the lowest recorded since daft.ie started compiling those statistics in 2006. In contrast, more than 4,000 hotel bedrooms were under construction in the first quarter of this year. Similar to how, during the financial crisis, workers were reluctant to assert their workers' rights, we are now seeing the same situation where tenants are reluctant to assert their tenancy rights for fear of having no place to call home at all.
The rental crisis has highlighted that even when laws are strengthened in regard to tenants, there is still a cohort of landlords who actively evade those laws. Lettings that do not meet minimum standards or overcrowding laws, non-registration with the Residential Tenancies Board, RTB, or rents raised higher than RPZ limits are all commonplace. We need the RTB to have the resources to inform all renters of their rights and to build up tenants' confidence. That is a funding issue. We also need the RTB and local authorities to be funded so they can carry out inspections to combat non-registration.
Furthermore, the continuation of rents being higher than mortgage repayments in every property type and county in the State highlights a harsh reality for most renters, who are paying grossly inflated rents, are therefore unable to save for a down payment on a house, and are locked into a vicious cycle. While the Minister will say that Rebuilding Ireland is the remedy to this, a Rebuilding Ireland home loan requires, in many cases, a down payment of €28,800 in cities like Dublin. The affordable housing scheme is still in its infancy, and properties acquired under Part V are meeting the huge social housing need. When Rebuilding Ireland was launched in 2016, did the Government believe that the situation would become as dire as it has today? We are sinking further into the crisis.
One issue the Bill is addressing that I largely welcome is the limitation put on so-called renovictions, the action where landlords can evict tenants from lettings for the purpose of "substantial renovation", and are able to rent outside of RPZ limits when they re-advertise the properties. I have heard, albeit anecdotally, of this happening to tenants more so over the last couple of months than in any other time, and I wonder whether some landlords are doing this in anticipation of this legislation.
I seriously welcome the inclusion of student accommodation under RPZ legislation. I commend the efforts of the Union of Students in Ireland, as well as the NUIG and DCU students' unions, on this. We put forward a proposal on it in the past, so I welcome and commend that move.
I welcome the extension of the notice to quit periods, which form part of the Bill. We proposed a 90-day period in the past if a tenancy was six months old, as opposed to 35 days.
I welcome the Minister's amendments during Committee Stage in the Dáil aimed at curbing short-term lettings. Dublin, in its current status, is quickly becoming like larger European cities which reap the benefits of tourism but fail to cater to residents. I bring attention to robust enforcement of those measures, and support for Dublin City Council to perform that enforcement.
I and Sinn Féin are disappointed that the Bill does not include enabling legislation for a rental deposit scheme or a limit of one month on the amount charged as a deposit. The deposit protection scheme has had legislation approved by Cabinet as far back as 2014, and five years on I am sure many deposits have been lost unfairly. I understand the Minister has stated that further legislation to deal with this is at a biting point, and maybe he could provide an update on that as well.
We will be supporting the Bill on Second Stage, and we have submitted a small number of amendments for the remaining Stages.
I welcome the Minister and his officials to the House. This is one of the most important pieces of legislation, and I am glad to see it here today. I know I have been very strongly critical of the Government's response to the housing crisis and rising homelessness, but I acknowledge that this Bill is a necessary, positive step in the right direction. It moves the balance slightly away from landlords and towards tenants, ensuring greater protection in renting. This is vital if we want to stop the number of people being evicted into homelessness and tackle the precarious situation so many families are facing.
I am happy to see an increase in the sanctioning powers of the RTB and the penalties available, in particular the extension of criminal liability to landlords who break the rules. If the RTB is to do its work, it has to have teeth and be able to enforce the rules set by the Oireachtas. Yesterday's daft.ie report, along with the stories we all hear from people throughout the country, show that this has not been the case.
The Residential Tenancies Board could be stronger and better resourced but this is a welcome step. The extension to cover student accommodation and the increased notice rights for tenants are also important. We all know that a key function of this House is to review legislation passed by the Dáil and to see where it can be improved. In that spirit, I will not speak at length about the welcome measures included in the Bill, which I recognise and acknowledge. Instead, I want to focus on issues that still need attention. I will address some of these areas on Committee Stage and Report Stage and will table amendments along with my colleagues in the Civil Engagement group.
We have been speaking to Threshold about the legislation as it stands. I share its view on section 34(b) and the problem with the ongoing issue of no-reason evictions. A landlord is able currently to terminate a Part 4 tenancy after four or six years with no reason given. There are situations where a family with young children have been living in a property for almost a decade, paying their rent, and they are removed through no fault of their own. This is a horrendous situation to be in and the stress that it causes is beyond terrible. We will not have a healthy, secure rental sector unless people are able to plan and look forward. Rebuilding Ireland has committed to moving towards indefinite tenure but that is not reflected here. Landlords need to understand that they are not selling a normal, everyday product. It is not a packet of crisps. It is an essential social good that people need to survive. It is the difference between a child having a normal, decent life where he or she can grow and develop, or sleeping in a car. It is right that there are restrictions and protections in place because this is not a market like any other. We are dealing with an essential social good and we must not forget that.
We need to address the issue of deposits. My colleague, Senator Kelleher, has worked very hard on this. Very sensible amendments were tabled in the Dáil by Deputy Jan O'Sullivan. The Minister should reconsider and accept them. Like other European countries, we need to address the situation whereby landlords demand two or three months' rent upfront as a deposit, which is unacceptable. The Minister said he agrees in principle that deposits should be capped at one month and that this will be addressed in legislation coming later in the year. I do not see any good reason it cannot be included here.
We can do more on rent transparency. If we want the rent pressure zones to be effective, tenants need to be able to access a proper register and see the rent increase for properties relative to the previous rent. I know the Minister is committed to this in principle but apparently there are legal issues. Could more detail be provided on what the Attorney General has said? What constitutional or statutory rights would be impacted, especially if efforts were made to make it anonymous? Does Ireland have stronger rights in this area compared with other countries that stop us from publishing these data? I am worried that legal advice will take the path of least resistance and tend to be more conservative. It would be good to get more detail on this point. These issues could be addressed through amendments. If the political will is there, we should look for cross-party consensus on common-sense changes that could improve an already strong Bill.
I hope to work with the Minister on this. In general, I welcome the legislation and the protection that it brings. However, we have to acknowledge that this will not address the root cause of the current crisis. We read the reports from daft.ie and we see how fast rents are rising despite pressure zones. The fundamental problem is a lack of supply of housing. Dublin alone needs approximately 80,000 new homes, and reliance on the private sector for construction just will not provide it. We urgently need the State to invest in social and affordable housing. The reality is that it is often cheaper to buy a house and pay off the mortgage than it is to rent. This compounds inequality throughout the country.
If one considers two couples at the same stages in their lives with roughly similar but modest incomes, both of them can just about afford to pay the rent each month and then cover other essential expenses such as childcare, healthcare and food. They are just getting by. The first couple, however, is lucky enough to have access to cash, whether a loan from their parents or an inheritance. It means that they can cover a deposit and take out a mortgage. At this point, the situation starts to change radically. They now pay €300 or €400 less per month than they would if they were renting, meaning more disposable income every week and the capacity to save. This money is also going straight into the solid asset that they can keep as opposed to going into the black hole of a landlord's pocket. It can be recouped to an extent. Meanwhile, the second couple is stuck despite a similar income and capacity to pay. The terrible state of the rental market means that they just cannot save because they do not have family wealth. Getting a deposit is impossible. They are stuck renting with no real way out of it. They are left in a precarious position with all the worry and stress that comes with it. How can a couple raise a young family in that situation? This is how inequality is compounded in this country and it builds over time. Our broken housing system makes it worse. It shuts out those without wealth.
If we are serious about fixing this, we need a proper supply of social and affordable housing. It is not just about scoring political points. I fully recognise the positive steps taken here but we need to address the root cause. We need an ambitious programme of investment in social and affordable housing and an end to the reliance on the private sector and the motive of profit to provide. It is not working and we have to change our thinking about housing. It is an essential social good, such as education or healthcare. It is time for the State to step up and ensure that it is provided.
I thank the Minister for the work that he is doing. Dealing with the housing market is a major challenge. The big change that we have seen is the increase in employment. We have many more people coming into the country than ever before. Instead of leaving the country, people are staying here. As a result, we have higher demand for accommodation. The demand for housing poses major challenges in all of the cities throughout the country. It is important that we get a balance. I am a legal practitioner and come across issues. In fairness, as other speakers have said, there are landlords who have provided substandard accommodation, have not been putting in the work to make sure that it is adequate, and have been using it as a means to make the maximum amount of money. The vast majority of landlords are running a business and want to provide good, satisfactory accommodation for their tenants because their tenants are their customers. I was speaking to a landlord in recent days about the number of tenants who have consistently referred new people to the landlord. They are only being referred because, over the years, the landlord has provided very good accommodation.
I am not defending instances where there has been abuse of the system but there is an issue where landlords are dealing with difficult circumstances.
Their circumstances have changed. I came across a situation where someone let out their own house following a bereavement in the family. That person went to rent an alternative house in a different location, but when they wanted to move back into their own home, it took 14 months to get possession of their own house. When the person got possession, they got no rent for the 14 months and had the additional cost of having to do a significant amount of clean-up and replacement of furniture and fittings. There is no penalty when a tenant abuses a system.
Where is the legislation for that?
We have seen where tenants have abused their situation and just moved into a new property because there are no checks and balances in the system. We need to be careful about this.
I have always had a strong view about this. I have no problem with investors investing in the property market here. It is welcome. I keep raising the issue of long-term tenancies and making the tenant responsible for the internal maintenance of the property. We need to do much more on that.
In many cases, landlords are providing furniture, carpets, curtains and all ancillary services in addition to the house or apartment itself. We need to move in a direction where maintenance is a shared responsibility between landlord and tenant. The existing legislation is not adequate in this regard.
The final issue I wish to raise is the situation of landlords whose sole business is letting property. They do not enjoy the same benefits as anyone else running a business in terms of transferring the property to a family member or selling it. In fact, they are liable for the full amount of capital gains tax. If we are not careful, we will end up in a situation where only the bare minimum of work is done on existing rentals. That is exactly what happened when restricted rent was introduced 40 or 50 years ago, which resulted in a serious deterioration in the condition of rental properties. We need to find the right balance in this matter. We must protect tenants, particularly families, and ensure they have adequate notice of having to moving out, but we must also ensure there is a balancing protection for landlords.
I welcome the Minister to the House and thank him for bringing forward this badly-needed legislation. I do not intend to delay its progress on Committee or Report Stages but I have submitted some amendments, which I hope the Minister will have time to consider before tomorrow. One of my concerns relates to the enforcement of short-term lettings. We must make it as easy as possible for planning enforcement officers in local authorities to deal with that aspect. The more effectively that we can make it a desktop process, the better. It is why I am proposing that there be a register to which planning enforcement officers have access. There may be problems in legislating for this, but I ask the Minister to look closely at it before Committee Stage. I accept that his intention is not to prevent people from renting a room in their property. In communities close to my home and that of the Minister, several homes have been transferred to short-term lettings. With adequate enforcement, we can ensure a good number of units are restored to the long-term market. My concern is to prevent a hollowing out of communities, which we have seen on the Continent where residential communities close to city centres were turned into holiday villages. I can name streets in Dublin city centre where that has happened, with families putting their homes up for sale because the location was no longer a residential street but more like a holiday home section of the city. The relevant provisions in the Bill would be strengthened by considering mechanisms for enforcement and ensuring adequate resourcing for that enforcement.
I acknowledge the point that there are good and bad tenants and good and bad landlords. The reality at this time, however, is that the number of people losing their private rental properties and becoming homeless exceeds our capacity to provide housing for them. It is one of the main reasons for the growth in the homeless list, with people going into a family hub, if they are lucky, or a bed and breakfast or hotel. In the short term, we need to stem that flow into homelessness by providing adequate protections for people. Several measures in the Bill are timely and will assist in that regard. In addition, I would like to see a strengthening of the deposits system, as raised by Deputy Jan O'Sullivan in the Dáil and set out in one of my amendments.
Another issue with short-term lettings is that the relevant provisions relate only to rent pressure zones. However, as numerous reports in newspapers and on television have shown, short-term lettings are having an impact well outside those zones. Workers in places like Dingle and Kinsale, for example, can no longer find somewhere to rent because the properties that were previously available have moved to short-term letting. That matter must be reviewed. Fine Gael ideology has it that the market will resolve the housing crisis and we must concentrate on the supply side only and move towards the European rental model. The problem is that we do not have the underpinning legislation to protect people in rented accommodation in the long term. If we are moving towards a situation where the vast majority of people rent, our legislation must reflect that by ensuring there is security of tenure. In fact, it must go even further than that. If we are telling people in our cities that they will be renting for the rest of their life at a cost of €2,000 per month, what happens when they come to retirement age and experience a drop in income which means they are no longer able to pay that level of rent? Are we saying that people in their late 60s will have to move to another part of the city or country, away from the communities in which they have lived for 30 or 40 years, because they will otherwise be unable to afford their rent payments? If that is what we are saying, then we must have full reform of our pensions legislation to ensure people have adequate provision in retirement to be able to afford to rent in the areas in which they have lived all their life.
It has been noted that the cost of rent is generally higher than the cost of a mortgage. Under the affordable housing proposals for Dublin, one of the criteria is that a person must be living within the local authority area for the previous 12 months to be eligible to apply. I know of many families who have had to move out of Dublin city centre because the rent is no longer affordable. They will not qualify for affordable housing in their own communities if they have been gone for more than a year. That issue must be reviewed.
I intend to press five amendments. I do so not to delay the legislation but with the intention of strengthening it. I look forward to debating my proposals with the Minister tomorrow.
Cuirim fáilte roimh an Aire. It occurs to me that given where we have been as a country, we should probably come up with an alternative word for "landlord". The debate on this issue tends to get skewed and it seems easier to see it in terms of the responsibility of landlords and to forget that tenants also have responsibilities. Perhaps "residential tenancers" or something like that might be an alternative name for landlords. We must take seriously the point made by Senator Colm Burke that many of us here may need to declare an interest as being among the 70% of landlords who rent out only one property. We must consider the common good when considering this issue. At the same time, most of us, in the course of our work as public representatives, have encountered situations where vulnerable property owners were completely done over by tenants. I know of a case where an old woman who was reliant on the rental income from her property was done over by a tenant with whom she was unable to cope.
Indeed as Senator Colm Burke mentioned, she was without any rent for a considerable period, including the time she needed to do up the property again.
I have a couple of further questions for the Minister and must apologise as I have to go to a meeting but I will attend-----
The Senator will not be here to hear his answer.
-----to his response as I know he will be kind enough to engage sooner or later with the issues.
On the section relating to short-term lettings, the intention is that this would not catch people who are home sharers, as he has clarified. Is that because it is already provided for in the legislation or is it because he proposes in forthcoming regulations to ensure that such people are not caught? I am thinking in the first instance of the 14-day cap, where short-term lettings for periods not exceeding 14 days would be considered a material change in use. Is it the case that this would not apply to people who are sharing or letting out a room in their house because that would be provided for in regulations or is it the case that this is the existing law?
If it helps the Senator, we are going to have a debate on the regulations themselves that flow from these amendments to the legislation, before they are finalised.
It will be the regulations that will guarantee that there is no unintended catching of such persons.
I am not going to allow a "to and fro" between two people here as it is unfair to other Members, although I am aware the Minister is doing his best to try to be helpful.
Through the Chairman, in response to Senator Marie Louise O'Donnell's aside, I said that I would be prepared to accept the answer whenever and however it is given. Snide comments are not helpful. It is also the tradition-----
It was not a snide comment, I just said-----
-----in the Oireachtas and in Parliament, where I am quite happy to give way and to allow-----
The Senator should stop all that moralising.
-----my time to be taken by way of a response.
If he asks a question of the Minister, the Senator should be here to receive the answer.
Such juvenilia is uncalled for.
Time is being used up, Senators, by the way.
I want to respect the Minister's bona fides in this. The point I wanted to get to was in respect of the 90-day cap, where it would be provided that home sharing and limited short-term letting to an annual cap of 90 days in a person's principal place of residence would be allowed without the need for planning permission. In a situation where a person has property near to a university would be letting a room in his or her home for a period longer than 90 days, and is able to avail of the tax exemption for so doing, would it be an unintended consequence that they might be caught? I am happy to accept the Minister's response whenever he sees fit to give it.
On the provision for exemptions and the requirements as to modifications being made to homes for the purposes of gaining exemptions to the rent pressure zone areas, many of us have had correspondence from property owners who say that these restrictions are simply too restrictive. The Minister may have had correspondence himself from people suggesting that it might be better to look at the investment in the modification of the property as a percentage of the rent that they gain from that property. Is that something that the Minister could have been considered?
I thank the Minister for being here to bring forward this important Bill. As many of us have learned in school, it is interesting that we are still debating fair rent and fixity of tenure for people which is at the heart of this Bill, even more so as we still do not appear to have resolved some of the ideals of Michael Davitt from many decades ago.
I am disappointed that rent deposit protection schemes to not feature in the Bill. I know that the Minister has some proposals but it would be useful to have a statement of intent in the Bill and the amendments that we will be tabling will reflect that.
Deposit retention is one of the primary issues brought to the RTB for dispute resolution. In 2017, it received 1,234 applications, a rise since 2013, when there were 900 disputes of that type. While as a percentage the deposit disputes are reducing, they are not doing so in quantum terms. That is an important area. When one thinks of deposits, the average national rent is €1,122. Very often landlords are now looking for deposits of two months' rent, which would be €2,244. Given the average industrial wage is €38,000, that is a huge proportion of an ordinary person's capital. I ask the Minister to consider the amendment on that issue which we will table tomorrow. It is a significant source of dispute for Threshold, where there were 786 queries in 2018. In each of these scenarios, tenants are highly likely to lose out on the possibility of securing a new home in the private rented sector for the want of a deposit. The failure to return a deposit can place them at risk of homelessness. It is a huge amount of money for an ordinary person to put together because usually one has a deposit to make. If it is two months and a month's rent in advance, that could amount to €3,500. I do not have that kind of money in my bank account although I am in a good well-paying job and I do not know many people who do. This should be at the heart of the intent of this Bill.
The deposit scheme ensures that a tenant has greater purchasing power and can be more mobile in choosing more suitable accommodation and for work purposes. This also helps the landlord because while most of the deposit disputes are ruled in favour of the tenant, some are ruled in favour of the landlord. My niece in-law's father is a landlord in Scotland where such a scheme is in place and he is delighted, as a landlord, for such a scheme to be in place. One is talking about large amounts of money accumulating. If one thinks of 339 tenancies, where each of those tenancies were paying a monthly deposit, that amounts to €380,000, and were one to double that to two months' deposit that would amount to €760,000 of an accumulated figure. As for the potential size of this figure, it was reported in 2012 that €32 million, which had been paid by the Department of Employment and Social Protection in the form of deposits on behalf of rent supplement tenants from 2006, had not been returned to the Department. It was not known what proportion was kept by tenants and what proportion by landlords. I ask the Minister to consider our amendment tomorrow to introduce a national deposit scheme. It is a fundamental piece of security of tenure for tenants. There are abuses and they are well documented.
I am fascinated that the House is so empty regarding such an extraordinary Bill , one which is terribly needed. This is the most prominent aspect of what is going on in the country and there are four of us present. Some Members did not even bother to wait for the Minister's answers. I feel it is a privilege that I can say what I need to, to the Minister, personally, outside of a Senate audience. I am sure that everybody on the doorstep is hearing this, the people who are not here. I am not a landlord and find it fascinating that 70% of the people sitting in the Senate are landlords. I was with Bank of Scotland, Ireland, and it ran out of the country and when it ran out of the country it took my deeds with it and now I am with a vulture fund. I am speaking therefore, from a tenant's point of view more than anything else.
Does the Minister believe the Bill is equitable and is balanced between landlords and tenants? It is as though the landlords are standing at the gates of hell ready to do everybody and the tenants are all wonderful and terrific. I wonder about the balance of the Bill and why 3,000 and not 1,700 landlords are leaving the system, if it is so good to be in it?
They cannot all be wrong. I am not pro-landlord because I have spent my life renting, from bedsits to houses to townhouses, and I am still under a vulture fund but I have spoken to landlords and I wonder why they are all leaving if the Bill is so balanced. Are they all bad, appalling and terrible and all tenants wonderful? Everything is about getting them. Is the Bill just based on the rogue landlords and the slum landlords? I ask the Minister to talk to me about the balance of it. It seems there is no way to question the Bill in this House because it is to be signed off tomorrow. Will the fact that landlords are leaving help the overall problem? I spoke to landlords today who have 20 or 30 properties. They are good and genuine landlords but they have got out and their properties are now vacant because they do not want to rent them out. The properties are in rent pressure zones and subject to the 4% limit so it is too problematic to rent them out again, while the fellow next door is renting at twice the amount.
We should go back to the county council house. People keep talking about the wonderful Mulvey Park in lower Dundrum, which is wonderful county council housing with big greenery in front and in which half the country was reared. Why can we not have these houses back? We are legislating ourselves out of business. Landlords keep on speaking about the substantial renovation definition, which they think is too restrictive. Property owners' income is also restricted, with no account taken of their indebtedness, ability to pay their outgoings, subsequent devaluation of their property or being forced from the market. On their introduction, the Government promised the rent pressure zones would be for a maximum of three years but it has now given up on the promise and added two extra years.
I know my area but not as internally as the Minister knows his. Can he talk to me about landlords who, because of this Bill, will have to rent their property out at a lower rate if tenants leave? This is what is coming in from them. One told me if someone owned a petrol station and others charged €1.35 for diesel, if they were obliged to ask only 81 cent they would go out of business very quickly but this is what happens in rent pressure zones. It is a case of balance. It is as if there are no laws for the tenant and it is all about the rogue landlord. Maybe there are hundreds, thousands or millions of them - I do not know because I do not live in that world.
There will be a mixed reaction to this and many landlords will leave because of it. If somebody rents for a living, as Senator Colm Burke said, they have to make a small profit though I take on board what Senators have said about roguery. There has to be balance but I do not see that. It is all about roguery and landlords standing at the gate of hell, ready to get everybody. This is not true. Moreover, tenants can be equally roguish, if not more so, so there needs to be some balance. I am talking about the generalities, rather than the specifics, which many of my colleagues will know about from canvassing on the doors. It happened in the Lower House and the Lower House knows the way to the future.
I might go on the road to San José with Senator Marie-Louise O'Donnell but she spoke a lot of truth. I welcome the Minister to the House. We have a housing need and a housing crisis. Hyperbole is spoken and rhetoric is uttered but the Minister deserves credit for his perseverance, his forbearance and his proactivity. I am not a landlord and only own my family home and I do not speak for landlords or tenants but for everybody. Senator Marie-Louise O'Donnell is correct - it must be about balance and about ensuring the security of the tenant. The rights of the tenants have to be upheld, and strengthened in some cases, but the same goes for the landlord. The Minister said 1,700 landlords have left the property market since 2015 and that is a huge number. It is incumbent on us, as the Upper House, to ensure we conclude the legislation and regulations in order that we can regulate Airbnb in the future. I appeal to Members of the House to ensure we do this.
I have accompanied and supported tenants in taking cases against rogue landlords at the Private Residential Tenancies Board, PRTB, and the Residential Tenancies Board, RTB, as it now is. My view of the world has changed a bit as I mature, reflect and listen to contributions. I once had the view that all landlords were bad and all tenants good, to echo Animal Farm. One's world view changes as one becomes more knowledgeable and one understands that there is no silver bullet. I am certain of one thing, however, which is that we need to ensure the affordable housing scheme is opened up and made available to people. We need to continue to ensure that people have the option to buy and live in their own home. As I did on the Order of Business this morning, I challenge Members to come down to Cork city to look at the quality of the social housing being constructed there under Rebuilding Ireland and to look at the transformation for people who are now exiting homelessness. I commend the Minister of State, Deputy English, on coming with me to Cork Penny Dinners two weeks ago and on engaging with Fiona Chambers in University College Cork, UCC, as well as listening and participating to find solutions.
We need to increase supply but why are landlords texting and emailing us in their droves? I have received a number of emails from landlords in Cork who are not the owners of multiple properties, though there may be one or two such landlords. One of them talks about the nonsense of the Residential Tenancies Bill and others talk about the amendments being too draconian. We can have that debate on Committee Stage tomorrow. Why are landlords leaving and why has there been an upsurge in the construction of student accommodation across the country? In many respects, we are playing catch-up because we should have created student accommodation before we embarked upon quantum change.
I welcome the debate and, in particular, the last two paragraphs of the Minister's speech about not deterring investment and protecting tenants. As Senator Marie-Louise O'Donnell said, it is about getting the balance right.
Balance is not in the Bill.
I chaired the start of this debate and I have been watching it on the monitor for the past hour and a half. I value the debate hugely as this is a huge issue on the ground. I would not want anybody to believe people are not interested. I spent many years in self-employed practice and landlords were my clients. As a public representative, I deal with tenants and landlords and a couple of features arise.
My view is that as we catch up, we will not do everything right. If something is not working, it should be changed. I will make a few observations. The rent pressure zones are coming in. I think everyone accepts that our problem is ultimately one of supply. If we had sufficient supply, it is probable that we would not need rent pressure zones because the market would stabilise. Rent pressure zones are based on average figures across electoral areas. In some cases, there are exceptionally high rents in certain parts of an electoral area and exceptionally low rents in other parts of the same electoral area. If the average rent in the area is below the national average, it is not designated as a rent pressure zone. Other electoral areas are more homogenous, which can allow the area to receive such designation. I appreciate that the Minister has changed the legislation in this area.
All of us are hearing from landlords. Everyone rents at some stage in his or her life. I rented for many years. My wife and I bought our house a number of years after we got married. That was a standard approach at the time. What we are talking about is a modern feature. It is deep in the psyche of Irish people, probably because we were ruled by the British for 800 years, to aspire to own our own homes. It is deep in our psyche to want our own homes. Senator McDowell spoke earlier about the Vienna solution. While I agree that we have to move to looking at the rental model, we cannot get away from the fact that home ownership is deep in our psyche. That is why it is critical for us to make affordable housing available to people, particularly young people across the social spectrum. We are moving in that direction. I have been contacted by young professionals who cannot get mortgages. A young teacher who came to me told me she cannot qualify for a mortgage even though she is in secure employment.
I think the affordable model is absolutely key. There are anomalies within the system at the moment. I will speak about tenants in the first instance. Rogue landlords can make the lives of their tenants hell by providing substandard accommodation, retaining deposits or engaging in harassment. Equally, rogue tenants can use deposits as a means of not paying rent. In such circumstances, the landlord can end up taking the tenant to the RTB and the whole thing can be an unqualified mess. I have dealt with landlords who have kept their tenants' rents at relatively modest levels. If a property owned by such a landlord suddenly falls into a rent pressure zone, he or she might end up charging half of the market rent for the area.
The fellow next door might be paying much more. I thank the Senator for explaining what I was trying to explain when I spoke about rent pressure zones. He is explaining it very well. I mean it.
When a tenant moves on from a property that falls within a rent pressure zone, the rent that the landlord charges the new tenant must be based on the rent charged to the outgoing tenant. Should such a landlord be entitled to charge the new tenant a reasonable market rent? In many cases, landlords in rent pressure zones hiked up their rents in a way that inadvertently drove up the overall level of rent in the area. While we are waiting for supply to catch up, we must find a model that enables us to get reasonable rents for people. An affordable model for people needs to be fast-tracked. I commend the Minister on his efforts in this regard.
The Airbnb issue is a tricky and difficult one to deal with. We cannot have people being fleeced by what is being charged on Airbnb. People in specific situations might be using Airbnb for no more than a couple of months of the year. I suggest that reasonable rents and proper rights for tenants are the factors at play here. When I am contacted by tenants who have received letters from rogue landlords who want to dump them out early, I look at the types of periods to which they are entitled. If they do not contact me, they are at risk of being put out two or three months early. Equally, I am contacted by landlords who have rogue tenants. We need to find that balance all the time. When the Minister comes up with the detail of the scheme, I expect we will look at it in greater detail. I know he is open to suggestions. It is about getting a model that strikes a fair and equitable balance for tenants and landlords and, in particular, ensures people can afford rents. My background is that I was self-employed for many years. We are dealing with this issue on the ground on a daily basis. When I was here earlier, I commented to someone sitting beside me that this is a most important debate. In my view, it is taking place too late at night. It is highly unlikely that it will get reported. This is a critical debate. I commend it.
I thank everyone for the contributions they have made. In particular, I thank those who stayed after they spoke to engage in the debate. When I asked the Chair if there was a time limit on my response, he said "No." I am very sorry if I go on too long because I know people have had a long day. When I speak in this Chamber, I like to go through each Senator's contribution and respond in turn to what he or she has said. On this occasion, I propose to speak thematically on each of the issues that have been raised. I am trying to be a bit more efficient.
I spoke at the outset about the urgency with which we are dealing with these issues. I have asked the House to do something special with regard to the amount of time we spend debating this Bill in order that we can see it through this week. This is important not because I want to stifle debate or restrict the potential for further reforms, but because I am conscious that the Bill has already been delayed, unfortunately, through circumstances outside my control. The Government does not control this House. We wanted to put additional things in the Bill that were not in it initially to extend the rent pressure zones, change the qualifying criteria, lengthen notice periods and regulate short-term letting. I will go into the details of those changes in due course. The key thing is that we were meant to commence the new laws on short-term letting, which will allow for home-sharing while clamping down on short-term letting for tourism purposes, on 1 June next. As a result of the delays I have mentioned, it is now intended that the new laws will be commenced on 1 July. Given that we are now in the month of May, I am worried that if this Bill does not conclude in this House this week, I will not be able to come back to this House with the regulations next week. I want this legislation to come into law by the beginning of June to provide a four-week period to people in this situation. They have already had more than enough time. To be fair, they have known this was coming since October. There will have to be time to put public notices in the newspapers in order that this can happen on 1 July. We do not want to lose that date again. That is why I have looked for this to happen quickly. I appreciate the frustration this has caused for Senators. We have debated this issue in the House on numerous occasions. This is a very important Bill. I have already examined the amendments in detail. I have listened carefully this evening. I will go through every piece of this Bill with Senators tomorrow. I hope the Seanad will provide time to get this done this week. That will allow me to get this legislation to the President for signature, get the commencement done, start with the regulations and come back with the short-term lettings regulations.
Senator Marie-Louise O'Donnell may have misinterpreted Senator Mullen's remarks. I do not think he was talking about 70% of Senators being landlords.
I think he was.
The 70% figure relates to those landlords who own just one property. I think that is what Senator Mullen meant. His point was that most landlords in this country own just one property. He was commenting on how we talk about landlords. Maybe this relates to the points that have been made about the Irish psyche. Perhaps the word "landlord" has a connotation that does not apply to landlords in this country. Some 70% of them own just one property and 16% of them own just two properties. Some 86% of landlords own just one or two properties. As a result of the financial crash, many of our landlords are accidental landlords. They never wanted to be landlords. They bought properties at the wrong point in the market and when their employment or family circumstances changed, they acquired a second property. When we talk about landlords, we have to be careful not to treat them like demons or like the caricatures we have seen in films, plays or books in the past. Of course some rogues exist.
Senator Marie-Louise O'Donnell spoke about whether the Bill is balanced. In and of itself, it is not. As a Bill, it is there to bring new protections for tenants and to try to bring balance to our rental sector as a whole. It recognises that there are rogue landlords who should not be called "landlords" because they are abusing human rights. They should not be called "landlords" because that is not what they are. Some of the things that people are doing when it comes to accommodation standards, overcrowding and everything else falls more into the space of people trafficking. We need to make sure we can get them properly and get them good, in order that their cases will act as a disincentive to others who might try to take advantage of the system.
We recognise that we are in a period of transformation. We are moving from a rental sector that is not modern, European or functional to one that is more modern and European and meets the expectations of a new generation. That is challenging at a time of supply difficulties.
On the specific point regarding balance, there is an imbalance of power at the moment for tenants who have a problem with their property and who want to make a complaint. They can run into difficulties with their landlords and find themselves getting a notice to quit. That is why we have given the RTB the power to make an independent inspection without tenants having to make a complaint. Tenants will also be able to make a complaint anonymously. We are giving powers to them that they did not have previously, but which they should have, because their position is more precarious than that of the landlord given the property is their primary residence.
Landlords are leaving the market and I have been warning about this for two years, since I became Minister. I look at the data. I am criticised all of the time for looking at and speaking to data but they tell us what is happening. More than a year ago I said, on the basis of what the data were telling us about planning permission applications, commencement notices and completions, that the increase in house prices would slow and prices would fall. That is exactly what we are seeing now. Due to rent caps, we are also seeing this in rent pressure zones, albeit not as quickly as we should. Recent data from the RTB showed rents falling for the first time. The daft.ie report is from one company and is based on advertised rents rather than on rents agreed. It also uses a very small dataset but even that report is showing that things are not moving as quickly as they were before the crisis. That is important because it tells us that there is some progress. Of course, it also tells us that rents are too high and that we need to do more, which is exactly why this Bill is so important.
Some landlords are leaving the market because they were accidental landlords in the first place and because house prices have recovered. While they have not reached peak level - they are still 20% below that - house prices have recovered enough to enable some to get out of the landlord game. Some landlords are leaving the market because they have had a negative experience, with tenants not paying their rents. They cannot afford to carry that and so rather than trying to fix that, they have decided to get out of the market. Some landlords are leaving simply because of changed circumstances in their own lives. What this speaks to is some of the dysfunction of the market whereby our rental sector is dependent on small landlords. A full 86% of landlords only own one or two properties which makes the sector very volatile, given how things can change in an individual's life.
We want to find a balance. We want to have landlords coming into the market and making a long-term commitment of at least 20 to 30 years. That is what we want because then we can secure long-term leases. While people like to criticise large institutional investors, it must be acknowledged that what they bring to the sector is a commitment to rent a property for a long time. Furthermore, because they are often publicly listed companies and have shareholders, they cannot even try to break the law. They cannot go anywhere near the temptation to which some individual landlords might succumb because they have a responsibility to their boards, shareholders or parent corporation. That is not to say that all of these large companies are angels. That is why for the first time, through this legislation, we are bringing these large landlords into the scope of the rent pressure zone regulations. That is why the Minister for Finance and I have said that we will examine the tax treatment of these entities to make sure that any entity in the rental sector is operating under fair regulation and is compliant with the tax code.
We are trying to provide more balance and stability in the rental sector in the context of landlords. We know from the data that large institutional investors comprise a small percentage of the rental sector. Only 1% of transactions in 2017 involved large institutional investors. We are keeping an eye on this but we know that if we want to remove some of the volatility in the market, particularly over the past ten years, we will need more of the larger, long-term players. Benefits come with that. We want to manage the benefits and embrace the upside while minimising any potential downsides that might arise. One of the things we did for landlords in this year's budget was fast-track the reintroduction of 100% mortgage interest relief. It had been cut because of the crash. We said we would bring it back and we did it more quickly than initially intended because we recognise that landlords, if they are to remain in the market, need to be able to make enough money to at least cover the management of the property properly and to make a profit. I am not talking about a super profit but why would landlords take the risk of investing and why would we even ask them to do so if there was not going to be some return? We must remember that we cannot force people to be landlords. As more landlords leave the sector, our challenge in respect of people in housing insecurity and at risk of homelessness increases. That is why this all comes back to the crucial word which many Senators have used - balance.
We are bringing forward this Bill to ensure balance in the sector. It has 38 sections that are supportive of tenants because there is a lack of balance in the market at the moment. However, this is not one piece of work that will do the job. Of course, we will not all go home tonight and say that we have fixed the rental sector. That is why I also mentioned a second rent Bill that will be presented for pre-legislative scrutiny in the fourth quarter of this year. If I can, I would like to commence that legislation in the Seanad. I gave a commitment a number of weeks ago in this House that I would seek to commence more legislation in the Seanad which is only fair, given the time this House has given to rental measures. That is what I would like to do with that Bill later this year. It will deal with issues raised by Senators, which are not addressed in the Bill before us today.
The deposit protection scheme was a significant issue in 2014 and 2015 but deposit problems have fallen down the list of complaints received by the RTB. It was becoming less of a priority but, at the same time, we were seeking to bring forward priority legislation that would have the greatest support in the House and would move through the legislative process quickly-----
The proportion of complaints has reduced but not the actual number-----
We are acting on the advice of the RTB in terms of what is a priority for the first Bill and what can wait until the second Bill. The issue of deposits was high up on the list a few years ago but has fallen. That is not to say that we will fail to deal with it but, in the interim, something else has happened which is interesting. The interest market has gone in a different direction. The Senator quoted figures for the money that might be involved in a deposit protection scheme. The record might show that she referred to thousands of euro but we are talking about more than €330 million that would have to be managed in a deposit protection scheme. That is the equivalent of a bank. The RTB cannot manage that money. Who is going to manage it? That needs to be decided. Then we need to decide who is going to resolve deposit disputes and to make sure that it is done quickly. I am a former renter and I know that people need a deposit back from one property to secure the next one. That is not going to be possible if people are waiting for four weeks or more to get their deposits back. We need to make sure that when a deposit protection scheme is introduced, it will cover its own costs and will not involve an additional cost for the tenant or the landlord. It must also be efficient when it comes to releasing the money. We must determine who is going to manage the money and resolve any disputes. I have committed to bringing a report to the House shortly on how such a scheme might work.
On the question of the definition of a deposit, there was a lot of talk recently about landlords looking for two months' rent as a deposit but the RTB has said that it is not receiving many complaints in that regard. A deposit should be one month's rent and no more. If we are going to define that in legislation, we need to make sure that we are closing all of the loopholes so that landlords do not simply ask for one month's deposit and two month's rent up front. What if a landlord wants to charge an additional deposit because a tenant is bringing in a couple of pets? How do we capture these issues while remaining fair and balanced? We can do all of this. It is not rocket science but it just was not ready for this legislation. We must also recognise the new proposals that have been included in the Bill only recently, including the extension of the RPZs, the closing of loopholes and the actions on short-term letting. These were not in the Bill initially and have only been introduced in the past month or two because they were deemed to be a priority. It is not that we do not want to do something on deposits; rather we are teeing that up for the next rental Bill.
On short-term letting, our aim is to protect home sharing because the sharing economy is fantastic when it works well. People who have their own home and who want to go on holidays with their family for two weeks decide to let their property out to someone else while they are away. The money they make from doing that will meet some of the cost of their own holiday and why not? Others might have a spare room in their house and decide to let it out during the year, when it suits them. That helps with mortgage repayments or some other expense and, again, why not? We are going to allow home sharing to happen where it is the owner's residence. We are going to allow it all year round when it is just a room in the owner's residence. If the owner is leaving the residence to home share, there is a cap of 90 days. If it is a second property and it is in a rent pressure zone, then I am sorry but that cannot happen any more. The reason we have rent pressure zones is that there is such a high demand for rental accommodation among people living and working in the area and that has to be our priority. While we have to be concerned about tourists and where they are going to stay, as was pointed out here today, thousands of new hotel rooms are being built at the moment. The other parts of our country where short-term letting is the only tourist accommodation available will not be affected. This is linked to the RPZs because the legal advice is that we had to link it to something that shows that there is pressure on rental accommodation. We had RPZs in legislation so that is what we have done. I recognise, as Senator Humphreys said, that parts of the country are not in RPZs but there is pressure on rental accommodation there. However, I had to work within the framework of the legal advice I was given. Senators asked about that legal advice and how it was tested. I have been back and forth with the Attorney General time and again on this legislation as it evolved. This relates to the issue of rent transparency as well, on which amendments have also been tabled. I wanted rent transparency at the individual property level. That was my ambition. As we progressed, I received varied advice on this and went back and forth on it.
I was told that we could not do it at the level of the individual house, so we have been identifying where we can do it in legislation at aggregate level, whether that is by street or other area. The building of an annual rent registration capability, which is so important to understand what is happening in our rental sector, will allow us to do that. That will come, but not at the level that I would like. Had we included it, the risk of the legislation crashing on the rocks at a later stage was too great. It would have been unwise to risk it over that issue given everything else that the Bill is trying to do.
I understand what people have heard from some people about substantial refurbishment and we are looking at this. We do not want to deter people from investing in their properties. However, we want to ensure that, where they do so and look to get outside the rent caps in place, they have made a proper investment. They may have increased the floor space of the property to allow for a larger kitchen or playroom because there is a family in the house. They may have allowed for disability access or increased the building energy rating. There is good news on the climate front as well if we can do that. There are other things we can do under our housing policy and planning policy. We can improve the community and our impact on the environment and the climate as well.
Tenancy termination periods are being lengthened significantly. This will be of greater security to tenants who might be at risk of homelessness.
Why is so much student accommodation being built? It is built to a lower standard than homes and apartments because students do not need the accommodation size that a family or a young professional couple might need and because they enjoy more social spaces. Normal rental accommodation could not be built to that standard and that is why it is going up so quickly. It is needed but, as it happens, it takes pressure off other parts of the rental sector. Three students will no longer rent an apartment in the IFSC. They will go into student accommodation and free up the other accommodation, hopefully, for people working in the IFSC or those who want to live there. That is only one example. Six students might have rented a house in Cabra. They will no longer need to rent a house there because there is now student accommodation and that house will be freed up for a family or for professionals working in the area. Student accommodation is being covered under the rent pressure zone legislation in terms of the inflation that is allowed.
Reference was made to the Irish psyche and ownership. That may be true but perhaps that is changing as well. The most important issue is that we have choice. Young people starting off now will work in many different jobs in different countries. They do not necessary think that home ownership is for them in the next five or ten years. They need to have flexibility and choice. Unfortunately, there are people today who were not able to buy a house at a different stage in their life for whatever reason and who are approaching retirement age. Their means of income will be limited to their pension. They need to be able to rent in a secure way for five, ten, 15 or 20 years. They need to know that their pension will not be simply bulldozed by unsustainable rent increases.
As we bring about rental sector changes and more choice we have to bring about certain key measures. We talk about a more modern mature rental sector, a more European-style rental sector, more choice and more balance but what do we mean. We mean increased supply. We have made changes to regulations and planning permission is being approved for thousands of apartments. We mean far better standards, but also different standards depending on the type of accommodation being rented. We mean cost rental accommodation. This means guaranteed below-market rent for a significant period. That is the Vienna model. It works in other cities and it can work here. We also mean affordability not only for those getting below-market rent but also people having some certainty or stability around what kind of rent increase they might accept. Only four years ago rent controls were unthinkable in Irish politics. A year after that, we introduced them. Three years later, we are extending, deepening and improving them. The public attitude to housing and how it should be provided is changing. I believe the Oireachtas is responding, although it can never respond quickly enough. Anyway, I believe we are now starting to understand that we have a different type of responsibility from that we might have had in the past. While we recognise our responsibility to people who are most vulnerable and who need our help the most - that is why we have the provision of social housing - it is not enough to say that one person is entitled to social housing and will get the support but that if another person is not entitled, he or she gets nothing. We recognise now that there is another cohort of people who are working but who also need support with affordable rents or affordable homes to buy. These are the moves we are now making under Rebuilding Ireland.
The modern rental sector also requires security, longer leases and longer notice-to-quit periods. It requires moving to tenancies of indefinite duration. The next Bill will address this and incentivise landlord and tenants to enter into three, five and ten-year lease agreements. What people do not seem to understand is that if parties have a three-year lease agreement today, it cannot be broken because the landlord wants to move back in with notice to quit. He or she has to observe that lease agreement. We want more of these in the sector, not less. We also want stability in supply, which we have not had, unfortunately, in recent years. We want stability in affordability and price too, something we have not had either. We are building all these components. When we have them we will improve circumstances for tenants and landlords alike.
In combination with all of that, we are in the middle of a change management programme with the RTB, moving it from being a board to an independent regulator with all the powers it needs to properly and robustly defend the rights of tenant and landlord alike. That is the kind of vision we are aiming for.
I thank Senators for their time and for staying to listen to me respond. I look forward to the engagement we will have on the amendments tomorrow. I appreciate the fact that Senators are giving this special attention this week, which is important.
When is it proposed to sit again?
Maidin amárach ar 10.30.