COST OF RENTING CAN’T GO THROUGH THE ROOF WHILE WE WAIT FOR MORE HOUSES TO BE BUILT

08 December 2016

I am presenting the Social and Affordable Housing Bill to the House this evening on behalf of the Labour Party

It sets out the urgent legislative actions needed to address what has become a crisis of soaring rents and little or no construction of homes where they are desperately needed.

I am very disappointed that both the Government and Fianna Fáil have decided to hide behind the Government’s intention to publish proposals next week and propose amendments.

I am particularly surprised by Fianna Fáil’s amendment which contains no practical proposals around what we might do on these urgent issues.

At least the Government has presented proposals and will present more next week.

There is one particular part of Fianna Fáil’s amendment that I find bizarre. 

It states: “While an abundance of measures are required to speed up the delivery of new social and affordable housing, the proposals in the Social and Affordable Housing Bill 2016 for local authorities to use compulsory purchase orders to buy non-residentially zoned and un-serviced land to build social housing on, would be a needless and senseless waste of public resources and not create sustainable communities.”

It is as if the rezonings, brown envelopes and everything that led to the series of tribunals had never happened and as if people had not made a huge amount of money out of the rezoning of agricultural land.

It resulted in tribunals and huge problems around the suburbs of Dublin.

It is as if there had been no proposal in the Kenny report, which over 40 years old now, that the compulsory purchase of land for social housing should not result in extortionate profits for the owners.

The Kenny report recommended that the State should pay the value of the land at its current zoning, which would normally be agricultural, plus 25%.

It was a highly respected proposal at the time, albeit the Minister might argue about its constitutionality.

However, the description of our proposal to implement the Kenny report recommendation in the Fianna Fáil amendment is farcical.

That is not what it is about.

It is about ensuring that owners of land do not sit on it so that they can make a killing at a later stage.

That is what the Kenny report was about too.

It was about controlling the price of building land so that when land is required for building as cities develop, it does not result in such huge profits and what happened in the tribunals.

That is a deliberate misinterpretation of what we are proposing.

I was a member of the all-party committee on the Constitution that met to discuss the implementation of the Kenny report.

Chaired by Fianna Fáil, the committee agreed that the Kenny report was not unconstitutional because it struck the correct balance between the social and community good and the rights of private property, which are protected in the Constitution.

The Fianna Fáil amendment to our Bill completely ducks the issue and fails to make any proposals.

I will return to the issue of the Constitution later because the Minister in his amendment is also suggesting there may be constitutional concerns.

I do not know if they concern the particular issue which should have been put to bed by the report of the all-party committee on the Constitution or whether they may be around the issue of rent control.

If they are around that, Threshold has done some very good work in relation to the Constitution and striking the balance between the common good and the rights of private property.

Threshold quotes different cases and comes to the conclusion that there is no constitutional obstacle to having referenced rents and controlling rent increases or to issues around requiring vacant possession in the sale of a property.

The Constitution is not an obstacle.

It was never meant to protect private property at the expense of the common good.

Clearly, it contains a balance which the measures in the Bill get right.

I welcome the Minister’s clarification that there is some reduction this month in the rate at which people are losing their homes, but there are still far too many people becoming homeless.

In some cases, they are in the street and in others in hotels with their children.

In that context, we should not see obstacles in the Constitution which, in my view and that of many learned lawyers, do not exist.

Those who face unaffordable rent hikes cannot wait for the market to solve this.

They need answers now.

They are real people and families with limited incomes and whose most basic need, a roof over their heads, is costing more than they can pay.

We do not have all the answers.

I acknowledge fully that all parties and groups have raised these issues and made proposals and that the Minister has published his housing strategy on behalf of the Government to be further developed next week with proposals for the rented sector, but I implore him to take action for those who are in crisis now.

Building enough houses to deal with the pressure of demand will take time.

We know it takes quite a long time to go from the allocation of funding to the building of social houses and, indeed, from the determination of a developer or a builder to the building of private houses.

In the meantime, people are put in a position whereby they have to rent but cannot afford to do so. 

In many parts of Dublin, the mortgage for an average three-bedroom house is lower per month than the cost of renting the same house.

It is becoming impossible for people to pay the kind of rents that are being sought.

I recognise that many in the House have raised this issue regularly and we debated it recently in the context of a Sinn Féin Bill.

Some of the measures in my Bill are also covered by other Bills we have debated.

The most recent www.daft.ie report makes for grim reading, especially for those who have to rent in the capital city.

It breaks down the average cost of renting a three bedroom house in each of the Dublin districts and the County Dublin area.

The average cheapest rent for a three-bedroom house is €1,371 per month and the most expensive €2,200 per month.

That is a significant chunk out of anybody’s income.

Even a household with two incomes would find such levels of rent difficult.

Other cities are not far behind. 

I quoted Lorcan Sirr in a previous debate, who predicts that rents will rise by 25%.

This is clearly a very urgent issue.

Today the secure rents campaign presented a petition on behalf of thousands of our fellow citizens, a number of trade unions and civil society groups to the Minister or his representative at the gates of Leinster House, calling for control of rents and security for renters.

The Bill before the House provides for rent increases to be linked to the consumer price index and protects renters from being evicted before their leases are up because a property is being sold.

The secure rents campaign calls for these measures. Other Deputies have also put forward proposals.

The Bill has another important measure to control rents.

It requires the Residential Tenancies Board to establish an index of reference rents, whereby the initial rent must be calculated in accordance with the advertised values of comparable properties in particular areas.

The Threshold document goes into quite a lot of detail on how that would work.

Essentially, these measures are designed to set reasonable rents in the first place, to control increases in accordance with the cost of living and to protect tenants who have a lease from losing their home due to the sale of a property.

These sections of the Bill are the most urgent and pressing, and I hope the Minister will be open to the proposals despite resistance from some Government Departments.

During a debate last week, the Minister said he is considering amendments made in the Seanad to the Planning and Development Bill that originated there.

The Minister referred to the proposal that 20 units would have to be sold before tenants would be protected and have to yield vacant possession.

That figure was amended to five in the Seanad, but the Minister has cast some doubt on the amendment.

I urge him to reassure us that it is not his intention to increase the figure.  We would prefer for all tenants to be protected.

Other significant measures in the Bill are designed to free up affordable land and deter owners and developers from hoarding land and sites until they can make a greater profit.

I referred to these measures, in particular implementing the recommendations of the Kenny report, which was published a long time ago.

It recommended that the compensation paid where there is compulsory purchase of land for the purposes of building social houses would be the existing value of the land plus 25%.

People may have had the opportunity to read the explanatory memorandum which we published with the Bill.

It goes into quite a lot of detail around the balance of rights in the Constitution, in particular Article 43 which deals with private property and refers to the exigencies of the common good.

That is the basis upon which we are making this proposal.

We are also proposing that where land is distressed – a lot of the time that will involve land that is being administered by NAMA or the banks – there should be a limit on the amount of profit can be made from such land.

That measure is specifically designed to address the issue of vulture funds purchasing property and being able to make very large profits.

There are a number of measures in the Bill to which I have already referred, most of which concern renting.

Another measure deals with receivers and clarifies that where a receiver is in place it has the duties of a landlord.

It is an issue that has caused some difficulties and uncertainties in the case of properties where receivers have been appointed and tenants are not quite sure what the rights are and who is responsible for maintaining properties.

We seek to clarify that situation.

I have already discussed the other rental measures in the Bill, which are important.

Part IV deals with namely land and sites that are suitable for development but are being hoarded for one reason or another, mainly because the owner expects to make a greater profit if he or she waits until prices are higher.

There is a measure to introduce a vacant site levy in the Urban Regeneration and Housing Act 2015.

It is not due to come into effect until 2018, but propose that it be brought forward to 2017.

I suspect that may be one of the issues about which the Minister is concerned.

Our Bill proposes to bring the levy forward to 2017, but makes it payable in arrears from 2018.

It is designed to ensure that land is made available as soon as possible.

Everybody in the House wants social and private housing to be built. 

We simply do not have enough supply at the moment.

In the meantime, renters are in a situation which is completely untenable for people earning average incomes and whose rents are soaring.

They have no certainty and no great expectation that affordable housing will come on the market in the immediate future.

I look forward to the debate and hope the measures in the Bill will be seen to be practical and will assist in speeding up the supply of houses and, in the meantime, ensure that people can afford to stay in their homes.

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