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Dáil
‹ Leaders' Questions

Private rental sector rents

Summary

Deputy Howlin raised sharp rent increases in the private rental sector and argued the Government needed immediate action, not just future supply measures. Minister Bruton replied that increased housing supply, social building, and rental caps in pressured areas were the main responses, while Howlin criticised the limited geographic scope and delay.

Every other issue has been buried amid the chaos of the last seven days. The Government has now survived a motion of no confidence. In whatever time it has left, it is important that the Government focuses on some of the crucial issues on which it promised clear action. A new report was published on the private rental sector this week. It showed the largest yearly increase in rents across the country since these records began in 2002. The report from property website daft.ie covered the 2016 calendar year. During that year, rents rose by an extraordinary 13.5%. As the Minister well knows, increases of this magnitude put unbearable pressure on families. They make it harder, if not impossible, for people to buy their own homes. Broken down, these figures show 14.5% increases in Dublin and 12% hikes in Cork. Even outside the so-called pressure areas, we saw rises of 12.5% in rents in Limerick and 10.7% in Waterford. My colleague and our housing spokesperson, Deputy Jan O'Sullivan, has called on the Minister for Housing, Planning, Community and Local Government, Deputy Coveney, to consider including these in the so-called pressure zones. Of course, he has refused. The Government is basically telling people in Limerick and Waterford that it will do nothing to halt the galloping rents that they are now finding unaffordable.

Even if that were the only issue, it would be strong and sufficient evidence for new action. However, another worrying aspect highlighted in the daft.ie report is that there is now a critical supply issue. The number of homes available to rent at the start of this month was just 4,000. We need a rapid increase in the availability of housing and the supply solution. In the meanwhile, is the Government willing to accept that the rental strategy it set out to this House is not fit for purpose? Is it not now clear that formal rent control, for which we have advocated for some time and for which my colleague, Deputy Alan Kelly, has advocated for a protracted period of time, is the only policy that will have a real impact on the galloping rent increases? Will the Minister confirm his agreement to revisit the whole issue of formal national rent control now?

Comment on this

I believe the real solution to this is increased supply. That is the real focus of the approach that the Government has been taking. It is about real supply coming from social housing. For the first time, we have committed to 47,000 new builds of social housing after a period in which there was virtually no social housing constructed, which created huge imbalances in the marketplace.

We also have to get private sector building going as well. The Minister, Deputy Coveney, has created a whole range of initiatives to move that along using council and publicly-owned land to open up new opportunities for affordable housing, starter homes and social housing. That work is in progress. I believe it is encouraging to see in the reports that the Minister has published this week on the progress that has been made that there is a very strong growth in, for example, housing starts, which is an early indicator of the success of the strategy he is pursuing. We will have to see that materialise in completions in due course but I believe there are strong indications that we are seeing a revival of activity in the sector.

The Minister has recognised that there are pressures in the rental market as a result of that lack of supply. That is why he has introduced for a period a cap on rents. That cap provides that there can be only a 4% increase in rents. It also provides that there is a restriction on those who have not had increases for a number of years. Landlords cannot leapfrog rents to increase them in big amounts. Those caps are just coming into force now. We look forward to seeing the rental figures in the future impacted by those decisions. In terms of extending that to other areas, the Minister has indicated that there is an approach to extending it. It will be based on an analysis of the actual marketplace situation in each location. The Minister is fully open to looking at new areas.

As of the date he produced the order in December, Dublin and Cork clearly met that criteria but there is a further group coming up behind those cities, and I have no doubt other areas will be subjected to such caps also if that is established.

Comment on this

The Minister's answer is not good enough. He talks about supply. Of course, supply is the answer but the reality I have just outlined is that there are only 4,000 houses available to rent this month. There is no point in the Minister talking about a year or so. We need to have a rental policy now and that rental policy has to affect every citizen. We do not want a protracted process that involves only people affected now in Dublin and Cork. As far as the Government is concerned, the people in Limerick, Waterford and other areas can take a hike. I ask Minister to reconsider that until such time as the supply becomes available, which I believe it will over time, to ensure that people will not be facing ruinous rises in their rents, wherever they live in this country. I ask him to accept the proposal to put a rent cap in place nationally until such time as the agreed strategy to increase supply becomes effective.

Comment on this

The truth is that the Minister has put in place a framework for putting caps on rental accommodation. He has put in criteria which will be used to decide the areas where there are rental pressures.

Comment on this

That is not a lot of help to people-----

Comment on this

It is only where there are rental pressures that those caps are appropriate. He has put that process in place and it is open to any area to set out its case. It will be objectively assessed and the same order will apply-----

Comment on this

That is a speedy process he has put in place and each area can be assessed on the basis of the framework that is set. As Deputy Howlin recognises, it is crucial that we continue to get the public supply, the rapid build, the new initiatives in the private sector and the new student accommodation that will take pressure off rental accommodation. All those elements are proceeding at pace.

Comment on this

But in the meanwhile-----

Comment on this

The early indicators are very clear that that strategy is starting to get traction and have an impact but it will take time to build. In the meantime, there is the protection for tenants of the rental caps that are being put in place.

Comment on this

Only in Dublin and Cork.

Comment on this