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Dáil
‹ Leaders' Questions

Housing, rents and vacant properties

Summary

Richard Boyd Barrett and others pressed the Taoiseach on soaring rents, homelessness, NAMA disposals, empty homes, and the use of vacant properties. The Taoiseach insisted the core problem was housing supply, clarified that many properties had returned to use through different channels, and said a vacant-dwellings strategy was coming.

Today we saw yet another damning piece of evidence, in the form of the daft.ie report, of the abysmal failure of the Government to deal with the spiralling rental, housing and homelessness crisis. The report shows that rents have jumped by a record 13% in the past year - €134 per month on average over the course of a year - guaranteeing to escalate that crisis and lead to more emergency situations, more evictions and more people in homeless accommodation. Typically, the Taoiseach or the Minister says that the Government inherited this, that it takes time to deal with the problem and that the Government is on it.

I will cite a very concrete example of how decisions the Government made in the past six months have contributed directly to this shambles and the hardship that follows. Robin Hill, a development of apartments in Balally in Sandyford, was originally built by the McEvaddy brothers in 2008. The development, which consists of 52 apartments, went into NAMA at some point. For most of the time it has been in NAMA, at least 15 and possibly as many as half of the apartments have been empty while the housing crisis spirals out of control. In May 2016, Dún Laoghaire-Rathdown County Council asked whether it would purchase 15 of the vacant units. It was told that it could only buy the entire block. Shortly after the Project Eagle scandal broke in September, NAMA agreed the sale of Project Gem, which included these apartments, to the vulture fund Cerberus. The sale, which was one of the biggest sales of property in the history of the State, went through. Since then, Cerberus has moved to start evicting the tenants in a block that is still half empty. Of the 21 remaining tenants I have met, five are to be evicted in June. Others whom Cerberus feels it cannot evict straight away have been told they must pay an extra €250 per month in heating and hot water charges that were previously included in the rent. They were never charged for that previously. In other words, this is a back-door rent increase of about 20%.

These empty units are sitting there while we have record numbers in homeless accommodation with evictions to follow. This would have been avoidable if NAMA had not sold this development to a vulture fund but had given it to the local authority as it requested and if the Minister for Housing, Planning, Community and Local Government had ensured his Bill before Christmas included a provision to prevent new owners from evicting tenants when apartments are sold, as we warned would happen, or finding back-door ways to ratchet up rents. Is it not the truth that the crisis is avoidable and has resulted from the Government's policy failures?

Comment on this
Enda Kenny The Taoiseach Fine Gael

No, it is not the truth. The problem here is the supply of houses throughout the country. Anyone can understand that there is real pressure in certain segments of the housing sector. The Deputy can nod his head if he likes. I read a report this morning that said that 49 houses priced between €400,000 and €700,000 were snapped up inside a day by those who could afford them. There are no difficulties in certain areas.

It is true to say that there is a serious issue here. A total of 40,000 vacant units have been bought by the State in the past five years. If the Deputy had given me the details of the situation about which he spoke, I could probably have given him an accurate answer but I can say to him that the report about rental prices and rent pressure zones shows that rent inflation has slowed over the past quarter. The rate of increase in Dublin rents between quarter 4 of last year and quarter 1 of this year was significantly lower than the rate of increase over the year. Quarterly inflation registered in quarter 1 of 2017 was 0.7% in south County Dublin, 1.4% in west County Dublin, 1.6% in north County Dublin, 1.5% in north Dublin city, 2.1% in Dublin city centre and 1.4% in south Dublin city. I am sure the Deputy will be interested in the figure of 0.7% for south County Dublin.

There is also strong rent inflation in the commuter counties. The increases are placing huge pressure on tenants, particularly those seeking new accommodation. The Daft.ie report notes that rent increases faced by sitting tenants have generally been lower than for those seeking new accommodation. Rebuilding Ireland and the Government's strategy for the rental sector state that severe shortages in supply in key locations are driving these rent rises. That is why the housing programme prepared by the Minister for Housing, Planning, Community and Local Government, Deputy Coveney, emphasises the need to deal with the question of supply. On several occasions in this House I have given details of the initiatives, opportunities, Government action and money that is being provided for local authorities and both public and private developers to deal with the housing supply issue. There are cases of objections and this, that and the other but this is the real issue that Government is trying to address. Deputy Boyd Barrett knows as well as I do that to go from 90,000 houses being built per year to less than 9,000 takes some recovery. The Deputy mentioned NAMA acquiring properties. It was a portfolio worth €80 billion. NAMA will have done its job when it gives the taxpayer approximately a €2 billion-plus surplus within the timescale involved. Those who acquire those houses are subject to the law of the land.

Comment on this

The Taoiseach's figures are all wrong.

Comment on this
Enda Kenny The Taoiseach Fine Gael

The number of vacant properties since 2011 is 40,000. The action taken by the Minister in respect of the second point raised by Deputy Boyd Barrett was on foot of legal advice received from the Attorney General.

Comment on this

A fantasy figure has just appeared, namely, that the State has apparently purchased 40,000 houses. The more accurate truth is that NAMA has flogged off thousands of homes or, worse, as the Balally example indicates, has sat on empty properties in public ownership and when local authorities sought to purchase them, it refused and chose to sell them to a vulture fund instead. The vulture fund is now moving to evict people, bypass the Minister's totally inadequate legislation and ratchet up the rent on tenants it cannot immediately evict. I suspect, and the tenants fear, that they will be evicted in phases because under the Tyrrelstown amendment, no more than ten tenants may be evicted at one time, which is leading to landlords evicting tenants en bloc. That is almost certainly the case and the Taoiseach allowed it to happen by selling apartment blocks. How many more Balallys are there? How many more in Project Gem? How many more people will get eviction notices from vulture funds to which NAMA sold properties at a massive discount rather than give them to the local authorities. There are 50,000 empty properties in Dublin. The Balally situation indicates why there is a supply problem in spite of that. That is the real issue. It is not an absolute supply problem, it is a man-made one resulting from the behaviour of NAMA and the vulture funds, which are sitting on empty properties, evicting people to inflate property prices and rents and make more profit from the misery of those they evict or who cannot afford to rent such properties.

Comment on this
Enda Kenny The Taoiseach Fine Gael

Let me clarify what I meant when I said that 40,000 properties have come back into use.

Comment on this

That is not what the Taoiseach said.

Comment on this

That is not what was said.

Comment on this
Enda Kenny The Taoiseach Fine Gael

I take the Deputy's point. One thousand properties were purchased by the State at a cost of €203 million.

Comment on this

That is 39,000 fewer than the original figure the Taoiseach gave.

Comment on this
Enda Kenny The Taoiseach Fine Gael

The others are through the normal churn of reconstructions, sales, local authority purchases and so on.

Comment on this

It is almost like a figure for breathalyser tests.

Comment on this
Enda Kenny The Taoiseach Fine Gael

The Minister will soon launch the strategy for the return of vacant dwellings to habitable use. There are approximately 34,000 vacant units in Dublin. There is a list of vacant apartments and dwellings to be returned to use.

Comment on this

What is the Taoiseach going to do for these people? He should enforce a compulsory purchase order on those apartments.

Comment on this
Enda Kenny The Taoiseach Fine Gael

Even Deputy Boyd Barrett understands that these apartments cannot be returned to a habitable state overnight in order to be allocated to people.

Comment on this

The Taoiseach could start that process.

Comment on this

Some properties have been vacant for years.

Comment on this
Enda Kenny The Taoiseach Fine Gael

Deputy Boyd Barrett has pointed out to me in the past number of weeks that people have been sent 10 km or 12 km to hostels or hotels because the local accommodation was unsuitable.

The strategy that the Minister, Deputy Coveney is to introduce in the next couple of weeks is to deal with that very issue.

Comment on this

The State was sitting on empty properties.

Comment on this
Enda Kenny The Taoiseach Fine Gael

Vacant units, apartments and houses in the Deputy's area and every other area have to be the subject of a strategy to return them to habitable use for people in order that they can raise their families in them.

Comment on this