I met a man in Cork yesterday who is working in that city but cannot afford to pay rent in that city. Does the Minister think this is funny? I do not, and that man did not.

Fine Gael thinks it is hilarious.

That man is commuting daily from Dunmanway, which is 54 km each way. It is hilarious, is it not? That man cannot rent in the city in which he works. His story is typical of many people who have been failed by Fine Gael's strategy for the rental sector, the policy that introduced rent-pressure zones. The effect of those zones is "to limit rent increases, both within existing tenancies and between tenancies, to 4% per annum for a specified period", yet the housing affordability crisis is getting worse. More than 10,000 people are experiencing homelessness at present. Since the policy was brought in, we have seen more and more areas designated as rent-pressure zones because rents have been shooting up in the areas alongside rent-pressure zones. This is the case in Galway, Maynooth and Drogheda. Housing officers in local government have told me directly that rent-pressure zones are the single worst thing to have happened to the private rental sector. Rather than capping rents, the policy has given a signal to landlords to increase rents by 4% per year. Landlords believe that as every landlord is doing the same thing, they should too. Rent inflation is at 4% in the rent-pressure zones, but inflation outside of the zones, in the contiguous areas, is even worse. The policy is a failure and the reason for that failure is that the benchmark used for rent affordability is wrong.

Affordability must be benchmarked against earnings, what people can actually afford to pay. Average annual earnings for full-time workers grew by 1.7% between 2016 and 2017. Rents in rent-pressure zones are capped at 2.5 times the growth in earnings over the same period, which makes no sense whatsoever.

The minimum wage set by Government rose by 1% in 2017 and another 3.2% in 2018. The minimum wage in turn affects sectoral wages in cleaning, security, retail, hairdressing and other low-paid occupations. Many people working in these areas are renters. The Government is setting wage increases at far less than the 4% rent increase that it is not only tolerating, but in many cases encouraging. It is effectively encouraging a 4% annual increase in rents. Why did no one make the link between a proposed cap on rents and actual increase in earnings? Who came up with the 4% figure? Does the Taoiseach honestly believe that such a level of rent inflation continues to be acceptable or sustainable?

I acknowledge, as does everyone on these benches, that rents in Ireland are very high, particularly high in our cities, and have become unaffordable for many people who, as the Deputy has said, are forced to opt for long commutes instead. That is why we introduced the rent-pressure zones. They have only been in place for a few years. There is evidence from the RTB's quarterly reports that rent increases are now moderating. That can be seen in the most recent report. They were never going to work overnight; it was always going to take time for them to work. However, we can now see a slowdown in the rate of increases and even some reductions in rents in the last quarter.

No amount of rent-pressure zones, caps, regulations or formulas will solve this problem. They can help to alleviate the problem and make it less bad. They can act to treat the symptoms, but as long as there are more people who want or need to rent than properties available to rent, we will have a problem. It might appear as rent price inflation or under-the-counter cash payments, which is what happens in countries with very strict rent controls. It might appear in the form of people who cannot find anywhere to rent and have to continue to live with friends or relatives because there is a waiting list for a place to rent.

The solution must be based on supply. We need to ensure more places are available for people to rent, which will moderate prices and bring them down. The last time rent prices in Ireland fell was because the mismatch between supply and demand was corrected, and there was more supply than demand for rental properties. That is why we have put such effort into increasing supply.

Into selling off oversupply by NAMA.

Some 18,000 new homes were built last year and we are aiming to have more than 20,000 homes built this year - around 25,000 in fact. The policy is to ensure there is a greater supply of housing: social housing for people on the housing lists; private housing for people who want to buy because most people want to buy their own home; and places available for people to rent.

Any other measures such as rent caps, rent-pressure zones or whatever formula we use are only treating the symptoms and are not actually treating the problem. However, symptomatic treatment is important while we solve the underlying problem. That is why the Minister for Housing, Planning and Local Government is introducing additional measures to strengthen the rent-pressure zones, to make them more enforceable by giving more powers and resources to the RTB; to change the way they are calculated so that they are calculated differently outside Dublin, because there are parts of the country that would be rent-pressure zones but they are not because the Dublin rents distort things; to extend the notice-to-quit periods and other such measures; and to extend the rent-pressure-zone rules to student accommodation, an issue on which the Minister of State, Deputy Mitchell O'Connor, and the Minister, Deputy Eoghan Murphy, have worked very closely, recognising that many people in student accommodation have seen very big increases in their rents because they had not been covered by this legislation to date.

Of course, the issue needs to be cured and the cure is to increase supply. There is a way of doing that quickly. We have public land and the Government should use public money to build public houses on public land. In the meanwhile, before we actually implement the cure, we need to treat the symptoms. People are in pain and that pain needs to be addressed and alleviated.

We suggested the introduction of a national cap on rents because people cannot afford existing rents. If we had a national cap on rents, we would not have the instant pressure on the next zone that is outside the current line for the rental pressure, where they can increase, as we heard in one instance, by 30% because they think that they will be next. Let us have a national rental zone and link it to something sensible such as the consumer price index or wage inflation, not to an arbitrary figure of 4% which makes it unaffordable.

We need to increase supply dramatically and we need to see dramatic action, as set out in our own proposals, to deploy €16 billion to build public and affordable houses on public land, but in the interim we need to allow people to continue to rent and not be in mortal fear of not being able to afford their rent or find they have to commute inordinate distances to keep themselves in a job.

We agree that supply is the solution. We have a rising population, increasing by about 1.5% a year - very few countries in the western world have a population increasing as fast as ours - and we also have an emerging phenomenon of smaller household sizes, so we need a great deal of extra housing every year just to stand still. We agree that supply is the solution to the underlying problem, and addressing that is what we are doing. A total of 18,000 new homes built last year. One in four of those new homes were for social housing built by local authorities or affordable housing bodies. I do not know the last time we built one in four houses for social housing but that is what was done last year. It was probably the biggest social housing programme in decades, and that needs to continue. We want to increase that to about 25,000 new homes this year. If we could ramp it up quicker, believe me, we would, but we have not been able to do that.

We considered the introduction of a national cap on rents a year or two ago and there were a number of reasons we concluded that was not a good idea. First, we do not have a national rental market. Dunmanway is very different from Cork city and Cork city is very different again from Dublin.

The issue is the rate increase.

Treating the entire country the same when it comes to rents is a mistake and it might do more harm than good. The other concern we had with a rent cap, as in zero increases, is that it in itself might affect supply. We know that to deal with this problem-----

It should not affect the capacity at this stage.

-----we need more properties available to rent. We need people to rent out properties they own.

Where did the Government get the 4% figure?

A major concern was that by having a cap it might reduce supply, thereby not allowing us to solve the underlying problem, which we acknowledge is supply.