Amendments Nos. 1 to 7, inclusive, are related and will be discussed together. Amendment No. 3 is a physical alternative.
Residential Tenancies (Amendment) (No. 2) Bill 2021 [Seanad]: Committee and Remaining Stages
I move amendment No.1:
In page 3, line 26, after “2021” to insert “may not occur in the period of 36 months from the commencement of that section and”.
The Minister of State will have heard my remarks and the remarks of many other Deputies on Second Stage regarding the necessity to provide for a three-year rent freeze and that is what this amendment, among others, seeks to do. The Minister of State and his officials know that this can be done because it was done in 2015. At that time, a rent freeze was instituted to respond to a particular problem. Never was a rent freeze of this nature required more than it is now and it can be done if the political will is there. To date, the political will has not been in evidence from this Government to deal with the biggest and most dominant social issue of our time. I suggest that the Minister of State accept this amendment. Any excuses or rationale that he might provide that it is unconstitutional, for example, or not possible, simply will not stand up to scrutiny. The Minister of State knows that, as do his officials. I suggest that the best thing to do for our society at this moment in time would be to provide for a three-year rent freeze to allow the market to settle and to allow for the building of the homes that we all want to see built. A rent freeze will allow the housing system more generally to recover and respond to the needs of today.
I want to speak specifically to my amendments Nos. 3, 4 and 7 but I am also supporting the amendments of colleagues. The bottom line is that rents are too high and tenants simply cannot absorb any level of rent increase at this stage. We know, for example, that because new rental properties are not subject to the rent pressure zone caps, they are coming in at excessively high levels in some parts of Dublin, at over €2,000 per month for a standard two-bed unit, including in my constituency. Even where property is captured by the rent pressure zone rules, because it is virtually impossible to police the cap between tenants, that is, when one tenant moves out and another moves in, there is a widespread practice of landlords charging more than a cap, irrespective of whether it is inflation, 4% or 2% in that period. Of course, as the Minister of State knows, many parts of the State and approximately one third of tenants are not covered by rent pressure zones. Many of those counties, particularly more rural or western counties, are experiencing exceptionally high levels of rent as a result of some of the displacement of urban renters due to working from home arrangements and Covid-19 job losses.
Given where rents are, the idea that any level of rent increase is acceptable is sheer madness. The idea that the rent pressure zones would even work at 2% flies in the face of all of the evidence we have since the rent pressure zones and the caps were originally introduced in 2017. On that basis, the only thing to do here is to stop rent increases for an emergency period only. I do not believe we can ban rent increases indefinitely; there are medium to long-term negatives from doing so but in the short term, they need to stop.
One of the very retrograde elements of this Bill is the reintroduction of what we call the accumulating rent increase for a landlord who may not have increased the rent in previous years. That was a feature of the original rent pressure zone legislation introduced by the then Minister, Deputy Simon Coveney. It was not really a feature in 2017, 2018 or 2019 but when Covid hit, many landlords chose, rightly, not to increase rents in 2020 because of the financial difficulties of their tenants. However, their tenants where then hit with 8% rent increases in 2021 and it became quite a big matter of debate here. The Minister removed that provision in the last Residential Tenancies (Amendment) Bill but it is now being introduced. What that means is that tenants, on foot of the passage of this Bill if it is not amended, could face rent increases of more than 2%, or inflation, whichever is the lower, if their landlord did not increase their rent last year or the year before. In fact, they could face rent increases of as high as 5%, 6% or 7%, depending on when the last rent review was set. We absolutely need a ban on rent increases and we absolutely need to remove the accumulating rent increase.
I am sure the Minister of State will make some reference to the Constitution and in that context, I fully endorse Deputy Nash's comments. We have had circumstances previously where rents could not be increased for a period of time. We might have constitutional difficulties if such a ban was open-ended or indefinite, although some legal scholars have a different opinion on that, but Deputy Nash is absolutely right that Deputy Alan Kelly, when Minister, introduced a two-year ban on rent increases.
I have other difficulties with that legislation, which I blame on the former Deputy and Minister for Finance, Michael Noonan, rather than Deputy Kelly, because the former fought tooth and nail against any relief for renters, as is often the Fine Gael way. Anybody that stands up in this Chamber and argues that it would be unconstitutional to have a very temporary ban on rent increases, at a time when rents are higher than they were at the height of the Celtic tiger era, is misleading the House.
I challenge him to publish any legal advice the Government has on the matter. If he did so, I would be willing to reconsider but I believe that it is a canard used to hide inaction. This entire group of amendments is eminently sensible. If the Government was serious about protecting renters, it would accept them.
While Members can speak for as long as they like on any amendment, we have 26 amendments and if we are to get through as many of them as possible, it would be helpful if Deputies were concise. As I say, they can speak for as long as they like.
I am speaking to my amendments Nos. 5 to 7, inclusive. We have very high rents as it is. They are unaffordable for many people and causing a huge amount of stress and anxiety. Dublin has the highest rents of any capital city in the European Union. Where does Dublin feature in the rankings for wages in European cities? It is 26th for wage levels, yet we have the highest rents in the EU. Across Ireland, rents are unaffordable, yet this Bill allows for rent increases of 2% through the rent pressure zone mechanism, which has been breached since it was introduced. The latest figures show it has not been observed in any county and that rent increases have been about 7% when they should not have exceeded 4%.
It is important that the Government listen to what people are saying and accept these amendments. It must put in place an immediate freeze on rent increases and remove the provision for cumulative rent increases, as proposed in amendment No. 6. There is no absence of legal opinion that the Oireachtas is constitutionally within its rights to act in the common good to bring in a ban on rent increases and that it would be proportionate. It is the function of the courts to interpret how we set the law but not to make law. There is plenty of eminent legal opinion to back up that view. I urge the Government to accept all these amendments.
I have a simple question for the Minister of State. Does he think that average rents in Dublin of €2,000 a month are acceptable? Does the Government think it is tenable to have average monthly rents of €2,000 or that areas such as mine have average monthly rents of €2,200? Does the Minister of State think that when the average industrial wage is about €35,000 it is tenable for the average rent in Dublin to require €24,000 or more in after-tax income to pay it? You only have to ask the question for it to be obvious that it is not tenable. However, the Government does not have a proposal to deal with it. It proposes to allow further increases to those rents. However you cut it - the Government says it is minimal or it is this or that - it is still allowing for further rent increases when rents are untenable.
We need to remember every single time we discuss this matter what its human consequences are. If you are without a roof over your head and you are on average or even above average earnings, and certainly if you are on below average earnings, you are in deep trouble if you go out looking for rental accommodation. It does not matter if you are working or have a family. Every week in my constituency, I see families, where the parents are working and the kids are at school, who cannot find or pay for accommodation at current rents because the housing assistance payment, HAP, limits do not go anywhere near that level. They may not have a roof over their head for many reasons. Maybe the landlord decided they had to leave because of grounds of sale or he is bringing a member of the family in or the situation is intolerable at home because of overcrowding. For how long can people live with their mother, father, grandmother and so on? There could be separation or domestic violence. If you need somewhere to live and you simply cannot pay that money, you are, by definition, in serious trouble. These people come into my clinic, as happened this week when a man just sat down and broke down in tears because he had been given a date to leave. He was looking for places and he cannot find anywhere because it is just not affordable.
What is the Government proposing to do about this? Please do not tell me that a couple of thousand cost-rental units next year will solve the problem or tell me about the amount of affordable housing. Between 60% and 70% of people, if not more, have earnings of the sort I am describing, where rents are just not payable. I do not want the Minister of State to tell me that what he proposes will see reductions in rent at any point in the near future. They will not. The market is not going to right this, so we need a radical intervention. The very least the Government can do in this situation is to say there will not be further rent increases. I will be honest and say to the rest of the Opposition, and I am not trying to score political points, that in my opinion that is not enough either because it does not do anything about the new accommodation that is going to be built. We are relying greatly on the hope that there will be a significant increase in supply - there will probably be some increase - but there is nothing at the moment to stop the new supply that comes on stream being charged at whatever rent people like. They can charge anything and nobody is making a proposal to do anything about it.
The Government should at a minimum support what Deputies Nash, Ó Broin, Cian O'Callaghan and the rest of us have been calling for, that there be no further rent increases in an untenable situation. However, we will have to go further or this will go on and on. We need to set rents at affordable levels. It is done in other countries. It can be done and it should be done. It has to be done otherwise we are not going to solve this problem. If somebody else can give me a solution that will achieve what needs to be achieved, I am all ears. However, there is no proposal on the table from the Government that offers any solution that will bring rents to levels that are affordable to ordinary working people in the short to medium term, or indeed the long term. There is just no proposal. As we grasp that fact, this miserable situation which is imposing horrendous suffering and anxiety on people and their children week in, week out will simply continue.
I am all ears but I want to know if the Minister of State thinks those rent levels are acceptable? If not, what is he going to do about it? What is his proposal? At the moment, there is none. As I said, I do not want him to tell me a couple of thousand cost-rental or affordable units will solve that. It simply will not do so.
Deputies are trying to be constructive. We are talking about real people and families. We are coming up to Christmas and there are people renting homes who live in fear that their landlord will put up the rent. Last week, I was contacted by a constituent who is paying €1,200 a month for a one-bedroom apartment. She got a notice that the rent was increasing to €1,243. I raised this with the Minister or Minister of State last week. This lady, a student nurse, is going to college and has to make a decision now. She is barely able to survive and is on the breadline because she is trying to pay her rent.
The question now is whether she must give up her studies to keep a roof over her head.
We are asking for a three-year rent freeze. This is an emergency. People cannot afford to pay the rent. Does the Minister of State believe current rents are affordable for ordinary people? I am not talking about the big earners but ordinary people and families who are trying to live their lives. I am telling him now they are not affordable. If the Minister of State believes rents are affordable, it shows how out of touch he and his Government are.
There are thousands of derelict houses and sites right across this State. There are 21 local authorities that do not enforce a derelict sites register and 13 that do not collect a penny. In the middle of the worst housing crisis in the history of the State, we have thousands of properties that could be turned into social, affordable housing and cost-rental homes. The Government will not fund local authorities to put teams in place to tackle dereliction and compulsorily purchase properties. I had a meeting today with Cork City Council. I wanted to know what it is doing about dereliction. We have hundreds of properties across Cork city and county lying idle because the Government will not support the local authorities to tackle dereliction. At the same time, it is allowing landlords to increase rents.
The rent pressure zones did not work, as we told the previous Government they would not work. Fianna Fáil supported that Government at the time and it did not do anything to stop it. Here we are now with rents having gone through the roof. The reason for that is Fianna Fáil and Fine Gael are pro-landlord and support rent increases.
I cannot accept amendment No. 1, which proposes that the setting of a rent under a tenancy of a dwelling may not occur in a period of three years from the commencement of section 3 of the Residential Tenancies (Amendment) Act 2021. Besides the difficulties with a blanket ban on rent increases, which I will address presently, the amendment as drafted would have significant unintended consequences. As provided for in this amendment, the setting of rent under the tenancy of a dwelling in a rent pressure zone at any time after the commencement of section 3 of this Bill may not occur in the period of three years from the commencement of that section. On the face of it, this means that rent settings cannot legally take place for three years even where a new tenancy commences in respect of a rental property. While freezing rents for existing tendencies, this amendment would also stop new tendencies being agreed for existing rented properties. Now more than ever, we need investment in the sector. We need people to be free to move within the rental sector as their needs change over time.
The proposed imposition of a three-year rent freeze has been debated numerous times in both Houses of the Oireachtas. As has been said before, a blanket ban on rent increases in all likelihood would face significant legal challenge. It would also severely impact on investment in the supply of rental accommodation in the medium to longer term. I am sure Deputies would not want this to happen as it would be an unwelcome unintended consequences of the measure.
While affordability remains an issue, the introduction of rent pressure zones in 2016 and their subsequent enhancement in 2019, in July of this year, and proposed in this Bill have played and will play a key part in moderating rent increases.
Rent pressure zones were a considered measure that balanced the needs of tenants with the legal rights of landlords and the imperative to ensure rental housing supply was not adversely affected. The current rent pressure arrangements, under which annual rent increases are prohibited from exceeding general inflation as recorded by the harmonised index of consumer prices, HICP, were introduced as a balanced set of arrangements that recognised the need to intervene in situations of high and significantly increasing rents, while at the same time taking account of constitutional property rights and the need to avoid disincentivising the provision of rented properties. When introducing these measures the Minister, Deputy Darragh O’Brien, was very clear on the need to carefully monitor inflation. At that time, HICP inflation averaged 0.73% per annum over the previous three years but had risen to 1.6% per annum in the year ending June 2021. The Minister needed to revise the rent pressure zone rent control relatively quickly in July on that basis, which could be independently verified. Given the continuing rise in HICP inflation, up to 5.1% per annum in October, this Bill proposes to introduce a cap of 2% per annum pro rata on any rent inflation in rent pressure zones to ensure that effective rent controls are legally in force when the general inflation rate is too high and over 2% per annum.
I cannot accept amendment No. 2, which proposes to remove a reference to “relevant percentage”, as defined in section 3 of the Bill, and replace it with a flat 2%. This would, in effect, cap any rent increase at 2% regardless of the time elapsed since the previous rent setting under the tenancy. The definition of relevant percentage in the Bill permits a 2% per annum increase since the previous rent setting, whether that setting occurred under the current tenancy or under the previous tenancy. The aim of the definition is to avoid incentivising a landlord to routinely increase rents in a rent pressure zone on an annual basis. The Residential Tenancies Act generally provides the rent review in a rent pressure zone cannot occur any more frequently than once per year. The definition would allow for existing tenants to enjoy occupation of their home under tenancy without annual rent increases should that be their landlord’s wish. The landlord could forgo any annual rent increases for existing tenants in the knowledge that he or she could legally increase the rent by no more than the HICP inflation rate or the new cap of 2% per annum pro rata, whichever is lower, when any replacement tenancy is agreed. For example, if a landlord set a rent at €1,000 for the existing tenant and did not review the rent during a three-year tenancy, he or she could legally set a new rent for the subsequent tenant of €1,060 in line with the new cap of 2% per annum pro rata if HICP inflation is higher.
We do not want to incentivise annual rent reviews in rent pressure zones for existing tenants. We do not want to impede a landlord from charging a reasonable rent for the dwelling based on the time elapsed during the previous rent setting and taking into account the time, value of money and the cost of maintaining and providing rented accommodation. Landlords who own only one or two properties make up 86% of the total and 70% own just one property. We need to encourage landlords to provide much-needed accommodation in the private rental sector. The proposed amendment would unfairly penalise good landlords and drive away investment from the sector. In all cases, section 19(1) of the Residential Tenancies Act 2004, as amended, prohibits any rent being set that exceeds the market rent.
I cannot accept Opposition amendments Nos. 3 to 7, inclusive, which, similar to amendment No. 1, propose to freeze rents at their current levels. As Deputies know, any proposed measure that impacts on private property rights merits detailed consideration and scrutiny having regard to the provisions of Article 43 of the Constitution and associated legal complexities. On Second Stage, I explained that this Bill will cap any rent increase in a rent pressure zone at 2% per annum pro rata, where HICP inflation is higher. This measure has the approval of the Attorney General and the Government is confident it is fair to both tenants and landlords and will have the desired effect and impact on the rental sector.
The Planning and Development (Housing) and Residential Tenancies Act 2016 introduced the rent predictability measure to moderate rent increases in those parts of the country where rents are highest and rising fast. The proposal in section 3 of this Bill for the rent increase cap of 2% per annum pro rata in a rent pressure zone if HICP inflation is higher has regard to the constitutionally protected rights of landlords and takes into account local rental market factors, providing certainty to tenants and landlords with the medium-term rent levels.
Throughout this pandemic, we have asked landlords to show forbearance towards tenants where they may be struggling financially and requiring State support. In order to better enforce rent pressure zone legislation the Residential Tendencies (Amendment) Act 2019 provided the Residential Tenancies Board, RTB, with enhanced powers and resources to carry out investigations to sanction landlords, if required, for any contravention of the rent increases restriction in rent pressure zones. The maximum sanction is €30,000. Alternatively, a tenant may wish to refer a dispute for resolution to the RTB and a lawful rent can be enforced and damages of up to €20,000 can be awarded to the tenant. The Department, the Housing Agency and the RTB keep the operation of the rental market under constant review.
It is important to have transparency in the rental system, with fair rents and certainty for tenants and landlords.
On Second Stage, I was very clear in stating that the rental market is dysfunctional and that rents are too high. I was also very clear about the solution to increasing supply. In any marketplace where demand significantly outstrips supply, prices go up. If you look at the facts and evidence in the supply data that is currently coming in, commencement notices are up more than 48%, or 30,947, up to October 2021, which gives major confidence about supply coming into the marketplace considering the year we had in 2020 with the Covid pandemic and the associated repercussions of the lockdown earlier in the year. When quarter 3 of 2021 is compared with quarter 3 of 2020, it can be seen that the commencement notices are up 60%. That means bulldozers are on sites and houses are being delivered for workers to try to ensure we meet the demands of the economy in line with the ESRI report.
I will be very clear that there is a solution that is backed up by multi-annual funding of €4 billion, which is targeted at delivering more sustainable and high-quality units for our citizens in this State. That is the key response and what the arm of the State is trying to do. We are bound by the law officer of the Government under the Constitution, who is the Attorney General, and we are obliged to act upon his advice. Many Deputies can quote different legal opinions in respect of various proposals, but the Government has to be very clear about the advice it has to take to ensure that any proposals it brings to the House will stand up. That is very important.
A previous rent freeze that was imposed in this State in 2015 was mentioned. That was actually a deferral of a rent review. When the point came at which rent was reviewed two years after that freeze, it was only a deferral. People could charge what they wanted, in essence, with the increase. We have to be honest about statements we make in the House about there being a rent freeze for a period. The truth and the fact of it was that it was a deferral of increases. We have to be honest about that.
Covid-19 has been a major imposition on the people of the State, but it gave us the opportunity to bring in a number of Bills to protect tenants in their homes and to ensure that they were not evicted in what were very difficult circumstances for every citizen that found himself or herself in them. On rent supplement, we really got into gear through the network of community welfare officers in this State, who responded to very vulnerable citizens within three days on average.
I absolutely understand this issue. I hear Deputies speaking about constituents coming to their clinics. I have clinics every week in my constituency and I meet people daily who are in very vulnerable positions, trying to retain a tenancy or to get a new one, which is very frustrating considering the current dysfunctional state of the market. One thing I can give citizens is hope. When I look at my home town, I see a number of sites that are currently being developed, some of which include more than 100 houses, and will be delivered over the next number of months. There is hope there. I know it is very frustrating, but the actions of the Government, the investment we have right behind that and the protections we are trying to bring in are the best balance at this point in time. I acknowledge - I am not tone deaf - what people are going through in this society with rent levels. I used the term "dysfunctional" to describe the market. The Government has intervened in the marketplace.
- Andrews, Chris.
- Bacik, Ivana.
- Boyd Barrett, Richard.
- Brady, John.
- Browne, Martin.
- Buckley, Pat.
- Cairns, Holly.
- Carthy, Matt.
- Clarke, Sorca.
- Connolly, Catherine.
- Conway-Walsh, Rose.
- Cronin, Réada.
- Crowe, Seán.
- Cullinane, David.
- Daly, Pa.
- Doherty, Pearse.
- Donnelly, Paul.
- Ellis, Dessie.
- Farrell, Mairéad.
- Fitzmaurice, Michael.
- Funchion, Kathleen.
- Gannon, Gary.
- Gould, Thomas.
- Guirke, Johnny.
- Healy-Rae, Michael.
- Howlin, Brendan.
- Kelly, Alan.
- Kenny, Gino.
- Kerrane, Claire.
- Mac Lochlainn, Pádraig.
- Munster, Imelda.
- Murphy, Catherine.
- Murphy, Paul.
- Mythen, Johnny.
- Nash, Ged.
- Nolan, Carol.
- O'Callaghan, Cian.
- O'Rourke, Darren.
- Ó Broin, Eoin.
- Ó Murchú, Ruairí.
- Ó Ríordáin, Aodhán.
- Ó Snodaigh, Aengus.
- Pringle, Thomas.
- Quinlivan, Maurice.
- Ryan, Patricia.
- Shortall, Róisín.
- Smith, Bríd.
- Stanley, Brian.
- Tóibín, Peadar.
- Tully, Pauline.
- Ward, Mark.
- Whitmore, Jennifer.
- Wynne, Violet-Anne.
- Brophy, Colm.
- Browne, James.
- Bruton, Richard.
- Burke, Colm.
- Burke, Peter.
- Butler, Mary.
- Cahill, Jackie.
- Calleary, Dara.
- Cannon, Ciarán.
- Carey, Joe.
- Carroll MacNeill, Jennifer.
- Chambers, Jack.
- Collins, Niall.
- Costello, Patrick.
- Coveney, Simon.
- Cowen, Barry.
- Creed, Michael.
- Crowe, Cathal.
- Devlin, Cormac.
- Dillon, Alan.
- Donnelly, Stephen.
- Donohoe, Paschal.
- Duffy, Francis Noel.
- Durkan, Bernard J.
- English, Damien.
- Farrell, Alan.
- Feighan, Frankie.
- Flaherty, Joe.
- Fleming, Sean.
- Foley, Norma.
- Griffin, Brendan.
- Harris, Simon.
- Haughey, Seán.
- Heydon, Martin.
- Higgins, Emer.
- Hourigan, Neasa.
- Humphreys, Heather.
- Kehoe, Paul.
- Lahart, John.
- Lawless, James.
- Madigan, Josepha.
- Martin, Catherine.
- Matthews, Steven.
- McAuliffe, Paul.
- McConalogue, Charlie.
- McGrath, Michael.
- McGuinness, John.
- McHugh, Joe.
- Moynihan, Aindrias.
- Moynihan, Michael.
- Murnane O'Connor, Jennifer.
- Noonan, Malcolm.
- O'Brien, Darragh.
- O'Brien, Joe.
- O'Callaghan, Jim.
- O'Connor, James.
- O'Dea, Willie.
- O'Donnell, Kieran.
- O'Donovan, Patrick.
- O'Dowd, Fergus.
- O'Gorman, Roderic.
- O'Sullivan, Christopher.
- O'Sullivan, Pádraig.
- Ó Cathasaigh, Marc.
- Ó Cuív, Éamon.
- Rabbitte, Anne.
- Richmond, Neale.
- Ring, Michael.
- Ryan, Eamon.
- Smith, Brendan.
- Smyth, Niamh.
- Smyth, Ossian.
- Stanton, David.
- Troy, Robert.
- Varadkar, Leo.
I move amendment No. 2:
In page 3, lines 28 and 29, to delete “the relevant percentage” and substitute “2 percent”.
I move amendment No. 3:
In page 3, lines 28 and 29, to delete “the relevant percentage” and substitute “0 per cent”.
I move amendment No. 4:
In page 4, to delete lines 1 to 3.
I move amendment No. 5:
In page 5, line 3, to delete “2 per cent” and substitute “0 per cent”.
I move amendment No. 6:
In page 5, lines 3 and 4, to delete “in respect of each year that has elapsed since the previous setting”.
I move amendment No. 7:
In page 5, line 7, to delete “2 per cent” and substitute “0 per cent”.
I move amendment No. 8:
In page 5, between lines 31 and 32, to insert the following:
“(f) by the insertion of the following after subsection (5B):
“(5C) A dispute between a landlord who seeks to rely on subsection (5) and a tenant as to the appropriate increase in rent following upon a substantial change in the nature of the accommodation provided under the tenancy may be referred to the Board for resolution under section 76.”,”.
I am conscious that we have not dispatched many amendments so I expect and intend to be brief. This amendment is, in our view, a reasonable one. I hope the Minister of State will accept it. Essentially, it is drawn from what is known as the renters' rights Bill, which was moved on Second Stage and debated here a number of weeks ago in the name of Deputy Bacik. It provides that if a landlord justifies rent increases due to what he or she terms substantial renovations and so on and there is a dispute about that, the dispute can be referred to the RTB. The RTB should have the function to be able to adjudicate on disputes of that nature. Inevitably, disputes will arise regarding the value and quality of renovation and whether or not consequent rent increases proposed by a landlord are justified. There is a requirement for transparency around this, for a rationale to be provided by a landlord and for the function of adjudication to applied to the RTB on matters of this nature.
I have no doubt that every amendment was tabled with the best of intentions. Every one of us here is striving to make sure there is proper availability at an affordable cost in the private rental market. I believe every proposal is being made in good faith, but I am terribly conscious that over the past number of weeks we have seen evidence emerge of the number of people fleeing the private rental market. I do not want it to be seen that actions taken here are contributing to that. When those people leave the market, if I thought the properties were being sold and made available again on the rental market, that would be okay. If I thought local authorities were buying them, that would be brilliant. The local authority would then have them to give at an affordable rate, which would be sound and sensible. Unfortunately, every rental property being sold is reducing the number of available properties we have and further increasing the cost of rent. That is why I have a dread that, despite the best intentions of Members putting forward amendments, we are in many cases shooting ourselves in the foot and inadvertently hurting the people we want to help.
I believe this amendment was put forward with the best of intentions, but I want to add what I would call a voice of reason. We do not want people who provide accommodation to think this is some sort of witch-hunt. I know that it is not and am not saying it is, but I do not want such a perception to be there.
With regard to what the amendment is trying to achieve, we want properties to be of the highest standard. If a person says they have to end a tenancy because they need to upgrade or retrofit a house, we do not want such a person to think every time they want to do something and it is a genuine case, it finishes up in a queue for an adjudication procedure. I am worried about that. I do not doubt the good intentions of the proposer of the amendment but we have to be careful about what we are doing.
I thank the Deputies. Unfortunately, I cannot accept amendment No. 8 as it is unnecessary. Section 19(5), referred to in the proposed amendment, provides for limited exemptions from the rent pressure zone rent control, including where a substantial change in nature of the accommodation provided under the tenancy occurs. Section 76 of the Residential Tenancies Act provides, inter alia, that either or both parties to an existing or terminated tenancy of a dwelling may individually or jointly, as appropriate, refer to the RTB for resolution any matter relating to the tenancy in respect of which there is a dispute between them.
Section 78 provides for a non-exhaustive list of particular matters that may be referred to the board for dispute resolution. This section specifically provides that, without prejudice to the generality of section 76, the matters in respect of which disputes and, where appropriate, complaints may be referred to the RTB for resolution include the time at which a review of rent should take place and the amount of rent that should be determined on foot of that review.
The requirements for the rent control exemption to apply in that respect are fair and reasonable. Given that we want to encourage new investment in the private rental sector, satisfying the requirements for a substantial change in the nature of the accommodation provided under the tenancy would constitute a significant investment on the part of a landlord and the exemption from rental control in respect of the first rent setting after such works is warranted. Accordingly, I cannot accept the amendment.
Deputy Michael Healy-Rae raised a valid point. The evidence backs up that more than 14,000 landlords have, unfortunately, left the market. When you look at the fragmentation of the rental sector, 86% of landlords have only one or two properties. We have been clear that we need sustainable landlords in the marketplace to provide long-term sustainable tenancies for tenants. We are trying to encourage that through Housing for All and to also stand on the side of those who are in vulnerable settings and trying to rent accommodation through increasing supply in every way we can.
I move amendment No. 9:
In page 6, line 5, to delete "his or her" and substitute "their".
I propose to withdraw this amendment on the basis of the response given by the Minister, Deputy Darragh O'Brien, to a similar amendment I tabled to other recent legislation.
I move amendment No. 10:
In page 6, between lines 6 and 7, to insert the following:
"(3) The Minister shall, within 12 months of the passing of this Act, lay a report before both Houses of the Oireachtas that— (a) Sets out proposals to strengthen the security of tenure including a review of the current grounds for termination, (b) Reviews effectiveness of the current rent pressure zone rules and provides recommendations for reform, and (c) Outlines proposals for a new accessible, readable and consolidated Residential Tenancies Act.".
This amendment provides that within 12 months of the passing of this Act a report be laid before the Houses of the Oireachtas and that such report look at security of tenure, the effectiveness of the current rent pressure zone rules, which I do not believe are effective, and on providing a consolidated Residential Tenancies Act. There is a need for a consolidated Act. The current legislation is complex and difficult for tenants, landlords and everybody involved in supporting the people in the sector, to follow. Legislation should be clear and simple. We could benefit from a consolidated Act.
I want to note that a few years ago a similar amendment to a Finance Act resulted in a report on vacant homes, namely, the Indecon report, which contains very useful information and is being used by the Government to try to formulate its policy on a vacant homes tax. I ask that this amendment be considered.
I support the amendment. It is important to note that since the previous Government introduced its strategy for the private rental sector in 2016 to the end of 2020, we have lost more than 20,000 properties from the private rental sector. We do not yet have the data for 2021. At the same time, rents during that period have increased by 30% to 40%. What we got under the previous Government's private rental strategy is rising rents and falling supply. It is quite a bizarre situation.
The Minister of State, Deputy Burke, is correct that the Government's new housing plan sets out a serious of measures, but it is particularly important to note that Dublin City Council and Cork City Council, which are the two largest urban areas with a large private rental sector, have published alongside the latest draft of their county development plans detailed housing needs demand assessments carried out under a set of tools provided by the Department, with data from the CSO and the ESRI and finalised by KPMG. Those housing needs demand assessments have concluded that if the Government meets all of its targets for social, affordable rental, affordable purchase and the private sector, as outlined in the housing plan, and if the economy grows on the basis of the projections of Government-funded bodies, between now and 2028 rents in Dublin will increase by an astonishing 50% and rents in Cork city will increase by an astonishing 36%. These independent analyses, which are not just some reports, but reports conducted by our two leading local authorities, published as appendices in their county and city development plan reviews, tell us that even if all of the Government's targets are met, which is a big question, over the next seven years rents will rise exponentially. How the Minister of State can come in here and say that the marginal increase in commencements, which is a factually accurate statement, is somehow is going to lead to reducing rental costs when all of the evidence is suggesting the contrary, beggars belief.
The central problem is as follows. Accidental and semi-professional landlords are leaving the market in their droves. Deputy Healy-Rae is right about that. As Government sits on its hands and does nothing about that, the new rental stock coming into the market is following a particular financial model whereby they will have to have continually increasing yields of in the region of 2% to 5% for the financing duration of the project, which is up to 25 years. Rents are only going in one direction, which is up. Everything the Government is doing is pushing up rents and driving small and semi-professional and accidental landlords out, which is all the more reason the very eminently sensible study which Deputy Cian O'Callaghan has called for should at a very minium be accepted by Government.
Again, it comes down to facts. This is about the provision of an in-depth analysis of where we are going, which, of course, is very laudable. The Business Post recently did an analysis piece on the projected rent increases, particularly in County Dublin, and what that will mean. In the near short term of, I think, three years it is projected that they will increase by 25%. If you take the rents that are being paid in Dublin and its environs at present and add on 25% or, perhaps as suggested by Deputy Ó Broin up to 50% in six or seven years, that is not just worrying, it is frightening. It is a return to the nonsense which we all fell foul of and all that we did wrong during the boom. The boom subsequently went bust. My late father always said that there is no problem in making a mistake provided you have the ability to learn from that mistake. The real sign of insanity is when you keep making the same mistake over and over in the hope that you will get a different outcome.
I am still confused. I would like to think I have good handle on this, but I am still confused as to how we can turn this ship around and sail it in the right direction. I will repeat what I said previously. This should not be an Opposition versus the Government or a tit-for-tat between anyone of us. There is an onus of responsibility on everyone in this House to knock our heads together to come up solutions. I have read the analysis piece and the synopsis of it. I am convinced that it is factual to say that those rents are going to increase by that amount if we cannot do something. In doing something, we have to be careful that we are doing the right thing. We cannot allow a situation where rents that are already exorbitant are going to up by, perhaps, 50% in six or seven years' time and 25% in as little as three years. How can we keep chasing our tail in that way and expect people to be able to live?
We cannot lose sight of the fact that when talking about this issue we are talking about real people who need money in their pockets to live, buy food, educate their children and run their vehicles to get to and from work. It is awful to think of people not having a bit of money in their pockets for the comforts they are perfectly entitled to and that every penny they have will have to go on ever-increasing rents.
We have to look at what is being proposed here. This is sensible. What is being sought is not an outrageous ask. I am interested in hearing what the Minister of State has to say about it.
I support this amendment. To solve any problem, you need data to analyse it and to identify the solutions. As stated by Deputy Michael Healy-Rae, we all need to work together. These are real people we are talking about and they are depending on us to deliver a solution. We are putting forward amendments that we believe will be a positive in regard to this Bill. Numerous Bills have been brought forward in regard to the resolution of the housing crisis. This Bill is another such measure.
I spoke to a landlord over the weekend. He charges €1,100 per month for his two bedroom property, which is below the market rate.
He has not put up the rent in more than three years because he considers €1,100 to be more than what he should be getting for the property. He respects his tenants, who are working hard. One is a nurse, her partner is also in the health service and they have a child. There are many good, decent landlords who respect their tenants. The man I referred to is really sincere and all he wants to do is cover his costs. He originally bought the property as a type of pension for when he retires. That is how he looked at it. If we do not have the data on what is happening in the rental market, how can we make the right decisions? I ask the Minister of State to accept the amendment.
It is important to acknowledge the decent landlords but there are also landlords who are increasing rents. I know of a situation where a person was moved out of a property because the landlord was selling it. In fact, the landlord wanted to get new tenants and increase the rent by €300. That was the way of getting around the rent pressure zones. The tenants were given a notice to quit, the 16 or 18 apartments that made up the site were cleared and given a lick of paint and all of them were put up for rent again at €300 or €400 extra per month. Cork City Council then came in and leased the whole building for 25 years. A huge amount of money is being wasted, by the Government and the country, through such long-term leases. I support Deputy Cian O'Callaghan's amendment.
I thank the Deputies for their comments. I cannot accept amendment No. 10, which proposes to impose various reporting requirements on the Minister. My officials, the Residential Tenancies Board and the Minister, Deputy Darragh O'Brien, keep the Residential Tenancies Acts under constant review to ensure the provisions, including the grounds for termination and associated notification and procedural requirements, are fit for purpose in a modern rental market.
The Residential Tenancies (Amendment) Act 2019 made substantial changes to provisions in regard to security of tenure. It implemented a number of amendments to the tenancy termination provisions in sections 34 and 35 of the 2004 Act to make it more difficult falsely to cite or rely on any of the grounds for termination set out in section 34. Such invalid citation is now dealt with as improper conduct by a landlord for the purposes of Part 7A of the 2004 Act, under which the RTB is empowered to sanction such improper conduct. Where a former tenant provides his or her contact details for such purposes, the landlord is required to offer him or her a reletting of a rental dwelling where, for example, a sale of rental accommodation does not conclude within nine months of the termination, the landlord or family member moves out of the rental dwelling within 12 months of the termination or the necessary substantial refurbishment or renovation has concluded. If a landlord does not offer to relet in such circumstances, he or she is liable for a sanction of up to €30,000, to be imposed by the RTB. The periods of notice to be given by a landlord when serving notice of termination to a tenant, in accordance with table 1 in section 66 of the principal Act, were substantially increased in the Residential Tenancies (Amendment) Act 2019, up to 224 days where a tenant has been in occupation for eight years or more.
Section 16(3) of the 2019 Act provides that:
The Minister shall-
(a) not earlier than 2 years and not later than 3 years after the coming into operation of subsection (1), commence a review of the operation of the amendments of section 66 effected by that subsection,
(b) not later than 6 months after the commencement of the review, prepare a report in writing of the findings of the Minister resulting from the review and his or her conclusions drawn from the findings, and
(c) cause a copy of the report referred to in paragraph (b) to be laid before each House of the Oireachtas.
This section was commenced on 4 June 2019. Accordingly, the Minister is obliged to conduct a review of the extended notice periods before 4 June 2022. Furthermore, this Bill, as outlined on Second Stage, provides for the introduction of tenancies of unlimited duration six months after the passing of the Bill. This will significantly increase security of tenure and simplify the operation of the Residential Tenancies Acts for both landlords and tenants.
The Minister will ensure that the grounds for termination are kept under constant review. The Government is acutely aware of the challenges faced by renters in finding accommodation in a situation of constrained supply of residential accommodation for rent. Paragraph (b) of the proposed amendment calls for a review of the operation of rent increase restrictions in rent pressure zones with a view to introducing any necessary reform. Section 3 of the Bill, as passed by Seanad Éireann, provides for the reform the Government considers necessary at this time, including a requirement for a review of the operation of the updated rent increase restrictions in RPZs, incorporating the new cap of 2% per annum pro rata where high-cap inflation is higher. This review must commence not earlier than 12 months and not later than 15 months after the commencement of section 3 of the Bill. Not later than three months after the commencement of the review, the Minister is required to make a report in writing to each House of the Oireachtas of the findings and conclusions of the review.
Regarding paragraph (c) of the proposed amendment, I think we can all agree that the Residential Tenancies Acts are complex. My Department and the Office of the Attorney General are conscious of the need to simplify the legal framework and endeavour to streamline the legal text of any provision in the Acts when amendments are being drafted. A project to simplify and consolidate the Acts would be a substantial task at this point in time. Moreover, further legislation is planned to amend the 2004 Act and is taking priority at this juncture. The Law Reform Commission keeps up to date its online, unofficial consolidation of the Residential Tenancies Acts, which is a useful resource and reference point for stakeholders. The RTB also provides up-to-date information on the Acts on its website. The information is provided in a user-friendly manner and is kept under constant review.
Deputies expressed a number of frustrations with the progress being made. I genuinely believe that an increase as high as 48% in commencement notices year-on-year to October 2021 is not insignificant. The latest quarter-on-quarter increase of 60% is very significant. As I have pointed out at every step of the way, there is huge hope for people in seeing supply increasing at pace, notwithstanding the difficult year this has been, with the construction sector closed for the earlier part of it. The numbers are very strong, there are diggers on site and builders building houses. That in itself will provide more supply right into the marketplace and will assist tenants. Everyone in this House, including me, is meeting very vulnerable people in very difficult situations who are trying to find accommodation or hold on to the accommodation they have. That is what this legislation is about. It is trying to limit the increase in rental inflation.
It can be very frustrating to see smaller landlords, whom we need, leaving the marketplace, as Deputy Michael Healy-Rae referenced. Some 86% of landlords in this country own only one or two properties. However, Deputy Ó Broin's party proposed to impose charges on those landlords in its pre-budget submission. Looking at the taxation measures in that submission and taking into consideration current taxation rates, including property taxation, to bring in another tax of €400 for every unit an individual rents out would be a very difficult measure at a time when supply is seriously constrained in the private rental sector. I am not sure increased taxation is the answer at a time when supply is so constrained, we are trying to get more small-time landlords into the market and we are trying our best, as a Government, to increase supply through the actions contained in Housing for All.
The housing need and demand assessment is a powerful tool that surveys all 31 local authorities in order to frame the demand for the next six years within their areas. The assessment found that nine local authorities need to increase their housing output over the next six years by more than 100% and a further ten must increase their output by more than 250%.
The key thing is that all of those local authorities have to submit their plan, which is not in yet, to the Department by 17 December. This will be on how they will meet the framework and the targets contained within them. That programme will give us more information than ever before on the type of tenure that is needed. What are the main blockages in our major cities and in provincial Ireland? What type of tenancies do we need? That will assist us in making decisions within the Department as well. We are working hard to try to unlock and get the types of residences that are needed in the right places. That is key. I want to be clear, and my view is solid, that we need to keep increasing supply. In any marketplace, the basic laws of economics are that when demand outstrips supply, prices will go up. We are focused singularly across Government on trying to get supply up. Our investment of €4 billion in multi-annual funding is just what we need to meet the Economic and Social Research Institute, ESRI, requirements of 33,000 units per annum.
Amendment Nos. 11 and 12 are related. Amendment No. 12 is a logical alternative to amendment No. 11. Amendments Nos. 11 and 12 will be discussed together.
I move amendment No. 11:
“In page 6, between lines 6 and 7, to insert the following:
“Amendment of section 19B of Principal Act
4. The Principal Act is amended in section 19B(3) by the insertion of “where such a payment is part of a combined payment, including tuition and materials to a third level educational institution as prescribed by way of regulation by the Minister” after “month”.”.”
The Minister will remember a powerful campaign by the Union of Students in Ireland, USI, earlier this year. It provoked a cross-party Opposition Bill to introduce a number of protections for student renters. That Bill, thankfully, was not opposed by Government and the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, was true to his word. He brought forward his own legislation in a timely fashion to deal with those and a number of other issues that were of concern to many in the House. That Government legislation passed unanimously.
One of the issues in the drafting of that legislation was that, because the Government wanted to act speedily and it had our support in that, there was a particular loophole included with respect to where a student enters into a new licence or tenancy for the purposes of student accommodation. While the general rule is that they should only have to pay a month’s rent in deposit, with the consent of the student, they can pay more. When we queried this with the Minister and the officials, it was explained that there was a genuine concern from the Department of Further and Higher Education, Research, Innovation and Science that a certain class of international students who pre-arrive in the country via a package of education, tuition materials and accommodation would be prohibited from doing so if there was not some provision in the Bill. We accepted that. However, the drafting of such a provision was not technically possible within the short timeframe. Therefore, a looser provision was included in that legislation. We understood that the Minister and the Department were going to revisit in this Bill. I was surprised when I raised it previously with both the officials and the Minister at the outset of the passage of this legislation that we were told that it was not being considered in this Bill.
Many of us have spoken to USI over the course of the last number of months. There have been instances, thankfully few in terms of the number reported, where students who are under pressure to secure accommodation have been pressurised into “voluntarily” paying more than a month's rent and a month’s rent in advance in order to secure accommodation. Obviously, in all such cases, the right course of action for the students is to go to the Residential Tenancies Board, RTB, after they have signed the tenancy agreement. Then, they will have standing in the RTB. Both we and the students’ unions have urged them to do so. The difficulty is that because students are desperate to get the accommodation they may not feel fully empowered to do so.
It is disappointing that the Government did not address that loophole and tighten up the language. I am not in any way suggesting that my amendment, or a similar amendment by Deputy Nash, that originate from the USI are technically proficient. I am sure the Minister of State and his officials could do a much better job. However, the core principle is the provision included in the last Residential Tenancy (Amendment) Bill, which is specifically to allow students coming into the country buying that package to continue to do so, needs further amendment. I urge the Minister of State to at the very least to give us a commitment to reconsider this issue. It is not acceptable in a time of diminishing supply, and probably the worst student rental crisis in the history the State and certainly in recent decades, for any form of loophole to be there that could unfortunately be exploited by unscrupulous landlords who want to charge families more than a month’s rent and a month’s rent deposit on taking up the tenancy or the licence.
This is a terribly important point. The guidance going back over 30 years was always was simple. The deposit was whatever rent was per month. At a time when rents were £300 per month, I remember well that the guidance was that the deposit was £300. It was not £500 or it was not double the rent. There was never any such thing. That was an old fashioned thing that was always there. Why in the name of goodness should students be targeted for an extra deposit? At the end of the day, the deposit should only be used in the case of somebody abandoning a property, leaving a person high and dry or doing damage. In many cases if damage is done the deposit is immaterial because it will always cost a lot more than the deposit would be anyway.
It does not make sense. It has to be mentioned in the context of this because it is terribly important not to let this go. There was an awful situation when students got caught during Covid-19. They had paid their deposit. Through no fault of their own they had to go home. At the time it was one of the biggest issues going. My personal interaction with it was that the private and smaller property owners gave back the deposits to the students. Among what I would call the larger and institutionalised property owners, there was a blanket refusal to give back the deposits. I thought that was horrendous, because the students had not done anything wrong. They did not stay at home from college because they did not want to go to college. They could not go to college because college was closed. Those people, their parents and perhaps in many cases their grandparents lost their deposits at a time when families were so upset and financially challenged anyway. I thought that that was inherently wrong.
This is sound. It should always be that a deposit is a month’s rent. That is what it should be and there should not be variants from that. Unless something is happening out there that I do not know about, it should not be happening. Going back over the last 30 years, that is the way it was.
There is a danger of a bit of consensus breaking out across the Opposition divide, if I can call it that. I will not detain the House much longer, other than to say that Deputy Ó Broin articulated the point and the case well. I think the Minister of State understands what the issue is here, as will his officials. We would appeal to him to take cognisance of this and to try to address the points. I think the Minister of State would like to address the points for all of the reasons Deputy Ó Broin pointed out. He knows what this amendment wishes to achieve and I hope he will take cognisance of it and take action to address the problem.
I would like to put something on the record because I forgot to do so twice. I declare what could be classified as an interest in this matter.
Briefly, I want to support these amendments. When this loophole in the legislation was raised in the summer, a number of us questioned it. I opposed it. Assurances were given at that time that the legislation was being done quickly and it needed to go through, but that this would be looked at again when a new Bill on the residential sector was being brought forward later in the year. This is that Bill on which we were given those assurances. The argument was put forward that tuition and accommodation is sometimes sold as packages, especially to international students. I do not see any reason it must be sold as a package with full payment for accommodation upfront. I do not see why that is necessary or why that should be provided for. We have had some terrible exploitation of international students, especially last year, some of whom had been mis-sold accommodation and tuition packages in Ireland. They had been given the clear indication from some of the providers that they would have in-person tuition for the duration of the year, only for that to be cancelled at the last minute. The students had paid all their tuition and accommodation costs upfront.
That is grossly unfair exploitation and it should not be supported in any way through legislation. I ask that this be addressed urgently.
This is a very sensible amendment. We did not think we would need to table something like this because when we discussed this after the USI and everyone came together, the Minister of State accepted the points that were made. Allowing someone to look for payment upfront goes against the whole concept of paying one month's rent in advance and then paying the rent every month. It is fairly straightforward. We need to protect students, especially at this time. Student accommodation is so hard to get that parents of students will go further than they need to in order to get it. There is a crisis in student accommodation and to allow any student, whether international or Irish, to be put at risk and not to be protected is incorrect. I ask, in all sincerity, that the Minister of State accept this amendment for what it is. It is not a political amendment. It is one that makes common sense and that will protect students and renters.
I thank the Deputies for their contributions. Unfortunately, at this moment in time I am unable to accept amendments Nos. 11 and 12, which propose to impose restrictions on the operation of section 19B of the Residential Tenancies Act 2004. Section 19B was introduced into the principal Act by the Residential Tenancies (No. 2) Act 2021 in July of this year, as outlined by the contributors. It provides that the total amount anyone can be obliged to pay upfront to a landlord by way of deposit or an advance rent payment to secure a tenancy is restricted to no more than the equivalent of two months' rent. A restriction of the equivalent of one month's rent is also placed on the amount a tenant is obliged to pay in advance as a rental payment to a landlord in the course of a tenancy.
Section 19B(3) of the principal Act provides that a student residing in student accommodation can choose to pay a greater amount of advance rent if he or she wishes to do so. This provision aims to help any student who may wish to manage his or her finances by making a larger advance rent payment by providing certainty that his or her accommodation needs are secured for the desired period. I do not propose to limit a student's discretion in this regard as it is a matter of choice for the student. However, on foot of what the Deputies have said, I want to make clear that the legislation states that landlords are legally not able to ask for more. If the Deputies have any examples of where this has caused an issue, I ask them to refer them to me and I will review them and come back to the Deputies. I note the heartache that was caused for many families earlier in the year by the fees that were charged. Right through Covid-19, many students and very vulnerable families that paid rent in advance were put under significant pressure and, unfortunately, in many cases students did not even get into the accommodation. I give a commitment that we will review the matter and I would welcome the Deputies contacting me with any examples.
The rationale the Minister of State has given for the original provision, that is, that students might choose to pay more rent over a period of time to manage their financial affairs, is not the rationale that was given to us either by officials or the Minister when that legislation was passed. We were told the Department of Further and Higher Education, Research, Innovation and Science made a specific request to the Department of Housing, Local Government and Heritage to have this flexibility, not for students who choose to but for a very specific category of international students who purchase a package that includes accommodation. Deputy Cian O'Callaghan is right that there are problems with that but that was the rationale. No student would pay three, six or nine months in advance in order to manage their own financial affairs. Deputy Michael Healy-Rae is right. The reason this became such a contentious issue was that large numbers of landlords, including universities in some instances, refused to give refunds for accommodation until significant pressure was applied. I am genuinely concerned by the reply the Minister of State has been given by his officials because it seems to misunderstand the nature of the original loophole and its scope for exploitation. There is no value in us giving the Minister of State examples. If we have examples of this happening we need those students to take those cases to the Residential Tenancies Board. That is the right place for them. I was hoping for something a little more forthcoming from the Minister of State but given that his officials do not seem to understand the problem as clearly as we and students do, I have no choice but to press the amendment.
I move amendment No. 12:
In page 6, between lines 6 and 7, to insert the following:
“Amendment of section 19B of Principal Act
4. The Principal Act is amended in section 19B(3) by the insertion of “where such a payment is part of a combined payment, including tuition and materials, to a prescribed third level educational institution” after “month”.”.
Amendments Nos. 13 and 14 are related and will be discussed together.
I move amendment No. 13:
In page 6, between lines 12 and 13, to insert the following:
“(c) in section 24 by the insertion of the following subsection:
“(24BB) With effect from the passage of this Act, and notwithstanding anything to the contrary in section 24A, orders under subsection (5) of that section shall be deemed to have been made in respect of the administrative areas of all housing authorities and, accordingly, the entire State is deemed to be a rent pressure zone for a period of three years.”.”.
Imperfect as rent pressure zones, RPZs, are, and there are problems with them, this amendment seeks to extend them across the country. At the moment some of the largest rent increases are happening in rural areas that are not covered by rent pressure zones. There is a need for these limited protections on rents to apply across the board and this should have been done a long time ago. I ask that the Minister of State accept the amendment.
My amendment is very similar to Deputy O'Callaghan's. It relates to the designation of rent pressure zones across the country in each administrative area, for the reasons that have been outlined. Rents are not just out of control in urban areas, which we have seen over the last few years, but are under pressure across the country. They are at a point now where they justify this type of intervention. That is why we designed this amendment in this way to demand this kind of action at this point in time.
I support both these amendments and I will add one additional point. We still have some anomalies because rent pressure zones are calculated on the basis of local electoral areas, LEAs, and data provided to the Minister by the Residential Tenancies Board. In a certain number of locations, such as Cork city and county, half an LEA is subject to very substantial rent increases and the other half is not and in many cases one half does not have much rental stock because it is more rural or county based. As a result, the rent pressure zone does not extend to the full LEA. We called many times for more granular data at district electoral division, DED, level to be the basis of such assessments and the Government ignored that. However, that would require a change of legislation so in the absence of that the only other alternative, given the rising rents outside the RPZs, is to ensure that whatever limited protections they provide apply to all renters in all counties.
To bring another perspective to this amendment, I would like these figures to be noted. In the county I represent, many so-called rural rents are €800 per month. Take off over 50% tax on that and that leaves €400 per month. That is €100 a week for the person who owns that property to maintain it, insure it, pay the property tax and pay the loan if there is one. We should be very careful when we talk about rent pressure zones. How in the name of goodness can you compare Dublin rents at €1,400 to €2,500 per month to rural rents? I am not trying to say for one second that the rural rent of €800 is small or insignificant for the person who is paying it. I consider it a lot of money when you have to come up with it every four weeks but we must remember that €800 is not €800. I am not blaming the Minister of State for this but the Minister for Finance, whether of this Government, the previous one or future ones, will always be taking 50%.
It is not €800, but €400 we are discussing and probably much less when we take the charges that I mentioned into account.
I am trying to bring some balance to this. As was mentioned earlier, we must not let people believe that we are hurting the market by doing what we are discussing.
These amendments propose to deem the entire State a rent pressure zone, which has been debated numerous times and which I cannot accept. Having regard to the constitutionally protected property rights of landlords, including the right to receive an income from their properties, a blanket extension of the rent pressure zone rent predictability measure to rental properties across the entire country could be regarded as an unjust interference with those rights because it places a legislative limit on rental income without adequate or proportionate justification, by which I mean the interference is disproportionate to the objectives sought to be achieved. For an area to be designated a rent pressure zone, it must satisfy criteria. The annual rate of rent inflation in the area must have been 7% or more in four of the previous six quarters and the average rent for tenancies registered in the area with the RTB in the previous quarter must be above the relevant average rent comparator under the Acts. The RTB rent index report provides a summary of the data used as the criteria for designating rent pressure zones in respect of all local electoral areas in the country. The Housing Agency continually monitors the rental market and may recommend further areas for designation.
The proposed amendments to deem the entire country a rent pressure zone are not considered to be warranted or legally justified. They are highly likely to be subject to a constitutional challenge in the courts and, accordingly, I cannot accept them.
I move amendment No. 14:
In page 6, between lines 12 and 13, to insert the following:
“State deemed to be rent pressure zone
5. The Principal Act is amended by the insertion of the following section after section 24BA:
“24BB. With effect from the date section 10 of the Residential Tenancies (Amendment) (No. 2) Act 2021 comes into operation and notwithstanding anything to the contrary in section 24A, orders under section 24A(5) shall be deemed to have been made in respect of the administrative areas of every housing authority in the State which on that date are not, or are not deemed to be, rent pressure zones; accordingly, each of those areas is deemed to be a rent pressure zone from that date for a period of 3 years.”.”.
Amendments Nos. 15 to 17, inclusive, 22 and 24 are related and will be discussed together.
I move amendment No. 15:
In page 6, line 22, after “paragraph (b)” to insert “and the deletion of paragraphs 3 and 4 of the Table to that section”.
This is to improve tenants' security of tenure and limit the grounds for eviction. It recognises that where someone is renting is his or her home. The landlord has ownership and derives an income from it but it is the tenant's home. This amendment seeks to bring us in line with many other northern European countries that recognise that where someone is renting is his or her home, where his or her children may be going to school, where he or she is making friends and has neighbours, and where he or she may be embedded in the community. We should be limiting evictions and notices to quit to the kinds of circumstances where a tenant is in breach of a lease, engaging in antisocial behaviour, is not paying rent, etc. Those should be the grounds for evictions. Our long list of grounds, which will remain intact under the Bill, is problematic and causes significant trauma for individuals and families. A family might have just reached the point of their child being settled in school, or they might have a child with learning disabilities and have got him or her supports in school, only to be served with an eviction notice. The problems and stresses that come from being uprooted will kick in for that family, as will the ensuing wider societal and State supports.
If we are serious about recognising that where someone is renting is his or her home, realising that the last place most people who become homeless had a stable home was in the private rental sector and trying to curb the number of people becoming homeless and all that entails, we should be looking to bring ourselves in line with other European countries, limit our grounds for eviction and create better security of tenure for tenants.
This is not just about the people who get evicted or are at risk of eviction. It is also about giving everyone else a sense of security about his or her home and taking that stress away. When people have a sense of a place as being their home, it gives them stability and they can get on with everything else in their lives without the constant fear that, even though they are paying their rent and upholding their end of the contract, their landlord could legitimately and legally give them notice to quit at any point on any number of grounds. This amendment seeks to remove that uncertainty and give people security, which they get in many other European countries and should get in Ireland.
I wish to speak to amendment No. 22. Section 5 contains a real deceit. I am choosing my words very carefully. For several weeks, the Minister has been on the airwaves telling people that this legislation will introduce tenancies of unlimited duration. The Minister of State used the same phrase on Second Stage last week. A tenancy of "unlimited" or "indefinite" duration has a clear meaning. It means that if I sign a contract as a tenant and then abide by its terms to pay my rent, keep the property in good order and not engage in antisocial behaviour, I can stay in that tenancy for an indefinite or unlimited period. It is a commonly understood principle almost everywhere in the world. Nowhere in this Bill is there the creation of tenancies of indefinite or unlimited duration. That is a matter of fact, so for any politician to come to the House and claim otherwise is to knowingly or unknowingly mislead the House.
What is being proposed in this section of the Bill is a small technical change and I have no objection to it. It does away with the ability of a landlord to terminate a tenancy with no grounds at the end of a Part 4 tenancy. This is something that most of us who know the legislation would welcome. However, the most recent data I have from the RTB, which I received last week, make it clear that, of all the notices to quit issued since the end of 2019, only 3% were on section 34(b) grounds, that is, a notice to quit at the end of a Part 4 tenancy. In the past year, that figure has only been 1.9%. Of the other grounds given for notice to quit in recent years, the most common is sale of property at 53% with use of the property by the landlord or a landlord's family member at 24%. We can debate whether these are good or bad things, but so long as these two core parts of section 34 of the Residential Tenancies Act remain on the Statute Book, then tenancies of indefinite or unlimited duration will not exist after the passing of this Bill. It would have been better had the Government been upfront with people and said that this was a small technical change that should have been made a long time ago, would not make much difference and would only protect a tiny number of people but let us do it anyway. We would have said, "Fair play, we will not get in the way".
The Government's claim is not an invention of this Government, as the previous Minister, former Deputy Eoghan Murphy, did the same and was on record as promising to introduce this legislation in the final year of his Ministry. In repeatedly making it, however, the Government has raised the expectation among renters that, if the Bill passes, a tenancy of indefinite duration will exist. It cannot exist unless the Government accepts the amendment that I have tabled, which would remove the other two no-fault eviction grounds from section 34, those being sale of property and use of the property by the landlord or the landlord's family member.
Obviously, these two changes would not apply to current tenancies because those tenancies are governed under existing contracts and current tenancy law, but if we are serious about moving towards a long-term, stable and professionalised private rental sector, which is something that we do not currently have but on which both sides of the House agree, we must move to a situation where a rental property is a rental property and remains so instead of being flipped in and out of rental and owner occupation. In the commercial sector and as with the Minister of State's constituency office and mine, once we sign the lease, if the owner of the property wants to sell, he or she sells for good, bad or indifferent with us in situ.
So it should be ultimately the case in the private rental sector. Therefore, first, I would like the Minister to stand up and at least admit this Bill does not introduce tenancies of indefinite duration, because it does not and, second, to accept that if we want to have tenancies of indefinite duration we must do two things that the Government has implacably opposed doing, which is removing those other grounds from section 34 of the Residential Tenancies Act, that is, allowing a landlord to issue a notice to quit on the grounds of sale or use by a landlord or a landlord's family member. It is the only way for us to move into a much more stable and civilised private rental sector and if it is not done now it will have to be done at some point in the future. On that basis, I will press amendment No. 22.
There are a number of speakers and we will run out of time.
I will be brief in the interests of letting as many colleagues as possible in to discuss the amendments. I will speak on amendments Nos. 16, 19 and 23 in my name. Amendment No. 16 is drawn from the Bill I referred to earlier that was debated on Second Stage in the name of my colleague, Deputy Bacik. It seeks to strengthen protections for renters who are being evicted on the basis of renovations to a dwelling.
Amendment No. 19 allows for existing Part 4 tenancies to become tenancies of indefinite duration, as provided for in the Bill, but without requiring the consent of the landlord. The Bill exclusively provides for tenancies of indefinite duration where they are new Part 4 tenancies or where the landlord consents, which is problematic for us if we are to move towards a European-style progressive, civilised rental system.
Amendment No. 23 is again from the same Bill, so we have rehearsed these arguments here before in this House, as have other parties and Deputies. The amendment would require that details of previous tenancies, any refurbishment works relied upon justifying a change in rent and amounts of rent payable under all tenancies are published in the national tenancy register. We believe that is a reasonable amendment and it aims to achieve a greater level of transparency.
I welcome any legislation that makes it easier for tenants to live free of fear and in a property that meets basic standards. I welcome the legislation introduced by the Minister, but there is an untruth at the centre of a lot of the properties rented in the country. It is epitomised by an article published recently in the Irish Independent which stated that 19 out of every 20 private rental properties were found to be in breach of the regulations for registered tenancies. It is unacceptable to allow landlords to put out a tenant because they say they want to improve substandard accommodation. We must address that in a clearer way. There are many tenants living in substandard accommodation, but they are afraid to complain because that will change their relationship with the landlord.
If we can make it more secure for people, that is where it is at. If tenants are paying the rent, that is where it is at. If there are no antisocial behaviour issues, that is fine with me too. We should be able to ensure that people in those situations are free of fear of a landlord knocking on their door. I know of a number of families that have been told by their very kind generous landlord that in one case they want to put a pregnant woman, whose child was due in a couple of weeks, out on the road because they wanted to "improve the property". The family was in a fierce situation. In that case the family was put under serious and unacceptable stress. There must be a balance here.
I welcome the changes in the legislation. In my view the balance should be in favour of the tenant. I agree with increasing the restrictions on a landlord's ability to unnecessarily and in many cases, cruelly, put out a tenant. We talk about the fact that 86% of private landlords have only one or two houses, but in many cases those houses do not reach minimum standards. We must address that issue and ensure that once a property is let, the process is secure and the rent is fair and reasonable for the person moving in. Properties must meet minimum standards and they do not do so currently. That is an issue we must address legislatively. I support what the Minister is saying, but we need a broader debate on the harshness of some unacceptably cruel and even vicious landlords who kick pregnant women out of homes that they say they want to improve when in fact they do not, and we all know that.
Every single day that I walk into my constituency office in Dún Laoghaire, staring me straight in the face, right across the road is living proof of the failure of the Government and successive Governments to deal with the ruthless, vicious landlords to whom Deputy O'Dowd just referred, and to protect tenants from what they are allowed to do under law by successive Governments. That is the multi-unit apartment complex that I have talked about here for four years, namely, St. Helen's Court. It stares me in the face, and I meet the people in there every day. When I look at it, it ticks every box of the failures of the Government to protect tenants and to deal with these types of landlords. Successive attempts by the vulture fund owners to drive people out were based on various grounds, but they have finally legally succeeded in doing what they sought to do at the beginning of the pandemic. The pandemic emergency measures saved the tenants for a while, but they are now legally evicted since the spring of this year. They are overholding because they have nowhere to go, but they are being evicted on grounds of sale by a vulture fund. A vulture fund does not need the property for itself. There is no justification at all for this fund to put these people out. They are decent, ordinary working people, some with families, some pensioners, some with serious health issues, people who have been working all their lives and they are just out. They have nowhere to go. There used to be 20 tenants in there, now two thirds of them have gone out of fear, anxiety and stress because there were successive attempts to evict them on grounds of sale or refurbishment or in one case it was not quite decided whether it would be for sale or refurbishment, but they were going to get the person out anyway. It was a case of just any excuse to get people out so they could maximise the value of the property. Two thirds of the property is empty for the past two years and it has been allowed to just sit there when there is a massive housing crisis in the area. Families are being made homeless week in and week out. They are trying to drive the remaining tenants out, but the perfectly good units where they have succeeded in getting the tenants out have been left empty for two years.
It is obscene. It is the definition of obscenity, greed and ruthlessness. I am sure this goes on in many other places across the city and the country. Time and time again I have come in here and challenged housing Ministers on what they are going to do about situations like this. What are they going to do to stop this obscenity, this gross injustice, this horrendous unjustifiable action that is being done purely for greed, for money? The answer is nothing. Nothing at all. There is nothing in this Bill that will do it for them either. I honestly do not understand it, except that the Minister thinks it is okay for these people who are driven solely by the desire to make money to do this to human beings. He allows it to happen. He makes excuses and justifies why he does nothing about it. We just keep going around in circles. The spin will continue and the pretence that we care, but nothing will be done.
Once again, the Opposition has put forward amendments to try to prevent this from happening and the Government will find excuses for why it is okay to do it.
I wholeheartedly welcome the indefinite tenure measures in this Bill. I have submitted three amendments in total to the Bill. Amendment No. 24 deals with removing the sale as a reason to end a lease, which is similar to the protection of leases on commercial properties in other jurisdictions. My other two amendments are critical to solving the issue of homelessness as a result of evictions. The first seeks an extension to termination notice periods to tenants in tenancies of less than six months from 28 days to 90 days. The second amendment is the most important. It is a simple but critical measure to ensure that both local authorities and the RTB are informed of termination notices to tenants once they are served. This will ensure local authorities have given enough time to assist families at risk of homelessness to avoid entering emergency accommodation.
I congratulate the Simon Community on the launch of its Bill, which I support, and I trust the Minister will work with the Simon Community to ensure its main provisions are met. I believe my amendments to this Bill support those provisions and go a step further to ensure early interventions are facilitated by informing and involving local authorities as soon as termination notices are served to tenants and not waiting until the tenant is at risk of homelessness before giving an extension.
The Deputy is speaking to amendment No. 24, not amendment No. 25.
I am nearly finished. We need early intervention. Families should not be waiting in limbo indefinitely, prolonging the inevitability of transitioning to a new home. I have a constituent, a mother with children, and they are being evicted in January. She has been in the system for 17 years and, therefore, the system should understand her position. The system needs to be proactive, not reactive, and another 90 days will not make her feel any better. It does not serve anybody to be stuck in a vacuum of anxiety. Early intervention will provide homes, not the stressful unknown.
I will speak to amendment No. 22. There is talk about tenancies of indefinite duration, which we all welcome, but this Bill does not deliver that. We have to be honest with people. There are renters out there tonight who are looking to the Minister for hope, security and protection, and this Bill does not deliver that.
Our amendment will help to protect renters. The excuses of use by a family member or that the property is being sold are used the majority of the time. As Deputy Ó Broin said, more than 75% of the time, those two excuses are given. Where is the security and where is the protection? Every day for the past month, we have seen an increase in the number of people getting notices to quit, and the notice to quit is an eviction. Let us call a spade a spade: where a person gets a notice to quit, they have to be evicted.
I got a text yesterday at 3:52 p.m. from a tenant who said that his landlord was outside, banging on the door. I will show the Minister the text afterwards. He shouted at the tenant that he did not care what HAP, Threshold or the RTB say, but if the tenant did not get out, he was going to blow the door in with a sledgehammer and drag the tenant out by the head. That is what I have here. The tenant was trying to phone Cork City Council homeless services yesterday because he is living in fear. This is not the first time this tenant has been threatened. Last week, I was in the hospital and he contacted me. By the time I drove from the hospital to the tenant, he had spent three hours in his car because he was afraid to go into his apartment, for which he is paid up to date. This is the fear. I had to go into his room with him. Before I drove over to him, I advised him to phone the Garda but they said they do not react to verbal threats. However, if the threat comes to the door and if the landlord threatens him physically, they will come. That is the fear tenants are living in. He was given notice to quit for 21 December and it was then brought forward to 12 December.
We are out of time.
Deputies O'Dowd and Duffy said they want to protect renters of indefinite duration. If they support this Bill, they will not be doing that.
I apologise to the remaining speakers. The time permitted for this debate having expired, I am required to put the following question in accordance with an order of the Dáil of 7 December 2021: "That each of the sections undisposed of is hereby agreed to in committee, the Title is hereby agreed to in committee, the Bill is accordingly reported to the House without amendment, Report Stage is hereby completed and the Bill is hereby passed."
A message will be sent to the Seanad acquainting it accordingly.