As we know, the rate of rent increases has been spiralling out of control in recent years. Rents have been soaring across the country. We know from various surveys, particularly the most recent daft.ie survey, which related to the third quarter of 2016, that there have been extraordinary increases in rent inflation. The annual rate of rent inflation was 11.7% last year. This was the highest increase recorded since 2002. Up to 2013-14, Dublin was the major driver of national rental inflation. Other areas have caught up dramatically since 2012-13. Some extraordinary increases were recorded last year. There were rent increases of 14.4% in Cork city, 12.5% in Cork county, 13.27% in Limerick, 10% in Galway, 13% in Waterford city, 15% in Meath, 13% in Kildare, 15% in Louth and 10.6% in Wicklow. I have itemised those increases to give people a sense of the scale of rental inflation across the country, including key urban areas and commuter belt areas, over recent years. There is a need to bring these increases under control and bring clarity to this situation.

We acknowledge that there have been changes in recent months. The possibility of increasing rent supplement was resisted for many years until the confidence and supply agreement between Fianna Fáil and Fine Gael resulted in such an increase, despite misgivings in Fine Gael, as well as increases in payments under the housing assistance programme. We also acknowledge that there has been a long struggle in relation to rent certainty and clarity. The Labour Party tried to bring that about when it was a member of the last Government, but it failed to get a breakthrough. It must be acknowledged that there seems to have been strong resistance in Fine Gael to any idea of a rent cap or rent clarity.

Fianna Fáil voted against it three times.

Legislation, rather than simplistic motions to play to the stage and to the Gallery, is needed for rent clarity.

We proposed legislation.

I make these points to acknowledge that there has been change within the Fine Gael Party regarding the idea of rent clarity. I think that has been brought about by public pressure. Our view is that the Minister's announcements are far too limited in scope and scale. Given the figures I have just outlined, the geography issue is for too restrictive and too limited. The boundaries of the cities do not take account of the suburban conurbations contiguous to the cities of Cork, Dublin, Limerick and Galway, etc. In many ways, these proposals appear to be too little, too late.

Go raibh maith agat.

It is essential for the geography to be broadened to take in major urban areas like Galway, Limerick and Waterford, as well as other areas like Meath, Kildare and Wicklow.

Tá an t-am caite.

Given the scale of rent increases we have already witnessed and people have suffered, we believe the proposed 4% limit is excessive.

Go raibh maith agat, a Theachta.

There is a need to bring that down.

Táimid ag cailleadh am.

There is a need to accelerate the incentives to increase supply and bring more houses into the rental market. I ask the Taoiseach-----

We are well over time.

-----to set out the Government's position on the three areas I have mentioned. There is a need for a response that involves a change in the Minister's proposals.

I am going to be severe on time today because I want to leave time for others. That applies to everyone.

I thank Deputy Martin for his question. This situation is unprecedented. It has been around for a very long time. Particular aims are set out in the Minister's comprehensive, targeted and focused rental strategy programme, which is the first intervention in the housing market here to be made by any Government. A great deal of discussion is going on with Deputy Martin's spokesman, whom I heard speaking this morning and at other times about the three issues Deputy Martin has just raised. The Minister, Deputy Coveney, has responded to the three issues in question. Deputy Martin will be aware that the Minister for Finance has set up a working group on the taxation issue. In this year's budget, the Minister, Deputy Noonan, said he intends to increase the deductibility limit in respect of landlords until it gets to 100%. He set out the timescale for that.

Deputy Martin also asked about contiguous areas of the cities of Dublin and Cork, which have been included in the Minister's proposals. It is clear that this will be assessed on the basis of local electoral areas by the Residential Tenancies Board. The Minister, Deputy Coveney, is confident that the areas in question can be extended. He will have an answer to that question by February, by which time he will have received the board's assessment.

The decision to set the cap at 4% was made for a number of specific reasons. First, there is a need to ensure there is a reasonable rate of return on investment so that there is no spike effect at the end of the period of the designation. In other words, a lower limit could have the effect of storing up a sudden upward correction for tenants after three years. Second, the Government previously endorsed a limit of 4% per annum on a rolling five-year basis as a reasonable rate of return in the target portfolio set out in the ISIF investment strategy report, which was published in 2015. Third, the level we have chosen is 20% lower than this country's long-run annual rent increases over seven decades. Fourth, the maximum allowed inflation in rental pressure zones will be less than half of the current rate of annual rent inflation nationally. It is below the allowed rental inflation in a number of other countries where rents are indexed, including Germany, where rents may be increased by a maximum of 20% over a three-year period;-----

Go raibh maith agat, a Thaoisigh.

-----New York, where increases of 7.5% per annum are allowed until maximum rent is reached; Sweden, where rents can go beyond an agreed price ceiling up a maximum of 5%; and Switzerland, where rents can be increased to ensure there is a return, with nominal rates of return of approximately 6%.

The Taoiseach will have to use the next minute for the extra information.

This is a really important issue.

I know it is.

I hope that through consultation, we can manage to get it through.

The Taoiseach will have another opportunity.

I stress that the 4% limit has been set by the Government for very specific reasons.

The Government has left it very late in terms of the consultation and the publication of the amendments. They have to be in by 1 p.m. today. It is important to have engagement and consultation. It is incredible that we are where we are, in terms of proposals of this gravity and importance, in the last Dáil sitting week of the year. We are here and we do not want to render tenants more vulnerable now that the proposals have been announced by leaving them to be exploited over the intervening period. We will constructively try to get a resolution to this. We are not satisfied with the capacity of the Residential Tenancies Board to deal with all of this.

We believe the extended areas should be included in the amendments. It is just too restricted at present in respect of Dublin city and Cork city. It has to be expanded beyond those cities and that expansion has to be included in the amendments to the legislation, in our view, and that has to happen forthwith. The proposed increase of 4% is, again, a matter that has to be resolved by the Dáil. We have a view that it is excessive and we are holding to that. We are prepared to be constructive in our engagement with the Government.

Go raibh maith agat.

The third point, crucially, is that a great deal of reliance is being placed on the Residential Tenancies Board, RTB, and there is a big issue about its capacity to monitor and ensure compliance with whatever regulations come out. There is a certain sense-----

Go raibh maith agat. I call the Taoiseach.

-----that there is one reality here. However, there is a completely different reality in the marketplace because people are being subjected to huge pressures to agree to increased rents.

I call the Taoiseach. We will be depriving other Members of time.

That is an issue. Therefore, the more action we take in the legislation over these two days, the better it will be in terms of bringing certainty, clarity and timeliness to the interventions that are being proposed.

This might be Leaders' Questions but we will be depriving other Members of time when they want to raise questions on the Order of Business. I call the Taoiseach. I ask all Members to respect the time limits.

I point out to Deputy Micheál Martin that this came into the Seanad approximately six weeks ago. It was made perfectly clear - and every spokesperson and all the parties understood - that it would be in the final week session that the matter would come before the Dáil, so it is not a case of it being very late for consultation. Consultations are ongoing with Fianna Fáil and with anybody else who wants to have them. Yesterday, the Minister spent the full day at the select committee dealing with this.

The RTB has been given extra resources. As pointed out, the start is with Cork and Dublin but, clearly, there are pressures in other locations. The RTB has been given extra resources to deal with this and it can respond and will have answers to the question by February. This is a really important matter for thousands of people and I hope this legislation will not be delayed. I have pointed out to the Deputy the very strong reasons why the Government set the cap at 4% and, obviously, those reasons stand up. The Minister, Deputy Coveney, is quite willing to continue to discuss with the Fianna Fáil spokesperson the issues surrounding landlords, taxation in respect of the geographical areas and how that can be implemented expeditiously, and the very strong reasons for striking a balance which is structured and directed to help tenants and continue the supply of housing.

Go raibh maith agat.

It clearly does not interfere with new houses or the elements to provide supply.

I call Deputy Adams. The same rule regarding time applies to him.

Tá mé cinnte go bhfuil do dhícheall á dhéanamh agat. Yesterday, I raised with the Taoiseach the Government's ill-thought-out proposals on the rental sector. I focused on two elements, namely, the absence of rent certainty and the Government's failure to deal with the difficulties - or even acknowledge the difficulties - faced by families in rented accommodation outside of the cities of Dublin and Cork. I did so because these are the two big failures with the Government's proposals but also because, like other Deputies, we did not have any sight of its propositions. That is the way the Government does business. The media was briefed and the document, complete with glossy brochure and all the other PR accoutrements, was launched outside the Dáil Chamber. This Government has produced more reports and press releases on housing and homelessness than it has built homes - that is the record of the Government. Deputies, who actually have the responsibility to vote on these measures, were kept in the dark about the detail. Now, contrary to the Taoiseach's protestations, he is rushing it through.

Sinn Féin's housing spokesperson, Deputy Eoin Ó Broin, tabled 90 amendments on Committee Stage, including one on rent certainty. Fianna Fáil and Fine Gael voted it down once again. We have tabled more substantive amendments today but the Government does not want any of them. All the bad old practices that marked the Government's previous term are being carried through into this term. The Taoiseach cannot even rely on Fianna Fáil on this one, or maybe he can. Part of Fianna Fáil's play-acting at being an Opposition party - the party of verbalised republicanism, the party which caused the crisis - is that every so often it has to engage in a sham fight with the Government. All the while, the 700,000 citizens in the private rented sector are being fleeced.

When we first brought these issues of homelessness, families in mortgage distress, the absence of social housing and the exploitation of families in the private sector to the Taoiseach's attention three or four years ago, he refused to act. He said it is clear that "interference in the market ... is not something we should do. While people are calling for what they call clarity on rent certainty, if we interfere in the wrong way, we will make matters worse." In fairness, the Government has interfered in the market - that is what it did yesterday. It has not quite abandoned its ideological position but it has set aside the principle in an inadequate way which, to use the Taoiseach's own words, has made matters worse. The people it has made matters worse for are the 700,000 citizens in that sector. They cannot afford the thousands of euro the Government proposals demand of them. I appeal to the Taoiseach to do the right thing, the proper thing, namely, introduce rent certainty, not rent punishment, and link rent increases to the consumer price index. That is the only solution that will adequately tackle this crisis.

Críochnaigh mé é ar an uair a chuir tú amach.

First, Deputy Adams has not read this document. It is not ill-thought-out at all. It is the result of intensive discussions, negotiations and presentations in recent months. Some 500 submissions were sent to the Department of Housing, Planning, Community and Local Government and they have been very carefully scrutinised. Of course, the starting point is the rental pressures in Cork and Dublin but that does not exclude other areas, and these are defined by sustained rental increases over a period that are above the national average. The RTB is being given extra resources to enable it to define those and by February it will have an answer to those questions of where rental pressure zones should be endorsed by and sanctioned by the Minister.

This year, 2016, 17,000 social housing units will be provided, not all new houses, but including returned voids, others that have been renovated and so on. Deputy Adams's idea seems to be that he wants to shut down supply entirely. He wants the Government to provide everything for everybody. He wants to have a cap right across the country which would simply stifle progress entirely. What is involved in this rental strategy is one of the five pillars of the comprehensive housing strategy provided by the Minister. It presents the opportunity for tenants to understand that their tenancies can continue. At the same time, it also ensures that there is a reasonable rate of return for private property let into the rental market and does not interfere with new houses or second-hand dwellings that are extensively renovated, even within rental pressure zones.

The fundamental issue is a supply problem. Due to the fact that the supply is not there, the rental situation has been exacerbated. We understand and appreciate the great difficulty that thousands of people have in respect of increasing rents in tenancies. That is why the Government is intervening here and is only doing so after very careful analysis of the conditions that should apply. The Fianna Fáil Party raised a number of issues and these are being discussed. I hope this House will see fit to let this legislation through this week, which will benefit thousands of people who are tenants in houses and who have a legitimate fear of or concern about rent rising. At the same time, it will not stultify supply of housing, as Deputy Adams would.

The Taoiseach says that the supply of houses is not there. Why is it not there? It is because the Government will not put public money into it. Instead, it put taxpayers' money into the pockets of the big bankers and their cronies.

The Minister said yesterday, "Really, we're kind of putting a bridle on the horse that has been almost out of control for the last two years". He said: "kind of". That describes it well - it is a "kind of" proposal and a "kind of" policy. Yesterday's announcement locks in rent increases of 12% for renters in Dublin city and Cork city, and that is on top of the runaway rent increases for everybody else. Four families a day are becoming homeless. What about the people outside Dublin city and Cork city? What about the people in the commuter belt? They are doomed to expect even higher increases in rents, which is what this plan envisages.

The Taoiseach ignored my substantive point when he responded to me a moment ago. The Government has interfered belatedly but inadequately with the market. It has conceded the principle. Will the Taoiseach acknowledge that? Having conceded the principle, why not follow through with rent certainty? He should explain why the Government will not follow through with rent certainty.

The housing allocation will increase from €800 million to €1.2 billion next year, which is a very substantial increase in funding for housing.

Why no rent certainty?

Government has intervened and intends to intervene in the market. It intends to intervene for the very specific reason that the rental structure is not working------

The Government's responses are not working.

-----and people are being forced by huge increases in rent in some areas to vacate their homes. The conditions for rental pressure zones are set out in the document presented by the Minister and approved by the Government yesterday. Those conditions are very clear. They are assessed by the Residential Tenancies Board, RTB. The essential condition is a sustained increase in rent of over 7%, which is above the national average. We start in Cork and Dublin. The RTB will have the opportunity to assess areas contiguous to those and other cities, which can be included in the area in which rental pressure zones will be authorised and in which the cap of 4% would apply.

In those areas there will be predictability and certainty for the period ahead for those tenancies but it will not interfere with the necessary supply of houses which has been the cause of the upward pressure in recent years.