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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Rent controls and affordability

Summary

Catherine Murphy pressed the Taoiseach on the scale of the housing crisis, rent freezes, and whether the State was really delivering affordability. He argued the problem was delivery and supply, defended existing rent measures, and said the summer economic statement and Housing for All would show further investment.

Last week, Deputy Jim O'Callaghan of Fianna Fáil was quite blunt in his assessment of the party's handling of the housing crisis. He said: "[Fianna Fáil] doesn’t understand the scale of the housing crisis". I happen to think that the Deputy was being unfair. It is not just Fianna Fáil that does not understand the scale of the housing crisis, it is the entire Government. Given the Government's shameful U-turn to facilitate tax breaks for cuckoo funds last week, that much is clear.

If the Taoiseach wants to begin to comprehend the scale of the crisis facing renters, might I ask that he read the survey published by the Residential Tenancies Board, RTB, today, which lays bare the hardship being endured by renters all over the country? Nationally, more than 50% spend more than 30% of their take-home pay on rent. That is after they pay tax, PRSI and USC and cover the cost of going to work. In Dublin, 64% of renters spend more than 30% of their take-home pay on rent. On average, tenants in Dublin spend 40% of their disposable income on rent. Matters are even worse for a significant proportion of renters in Dublin, 23% of whom are paying more than 50% of their disposable income on rent. This is unsustainable. In my constituency, it is not unusual to see a three-bedroom house rented for €2,000 per month. That is more than someone would pay for a mortgage.

Of the renters surveyed, 36% still expect to be renting in ten years' time. The RTB's summary report is quite clear as to why. According to it:

Many tenants in the focus groups see no real path away from renting, believing that they have no financial option now and in the future other than to rent. They may wish to own a home in future, but it is more aspirational than feasible in their current situation. Fundamentally they believe that they are locked out of the purchase market because of high house prices and their inability to qualify for a mortgage.

In recent months, we have seen a belated reversal of some of Fine Gael's disastrous 2016 policy of capping rent increases at 4%, but this Government has linked increases to inflation just as inflation is beginning to rise. If rents had been linked to inflation back in 2016, as some of us called for, then they would have increased by 2.8%. Since then, they have soared by 40%.

Will the Government freeze rents for a period, perhaps three years, instead of linking them to inflation, which will only drive up prices? When will we see the summer economic statement and what kind of budget will be available in the context of the Housing for All plan? That is the first thing we will all look for because we will want to know what the intent is.

Comment on this

My genuine view is that we have to be solution driven in respect of housing. I get the housing crisis, and nothing motivates me more in government as Taoiseach than exploring every available option to get more houses built and houses that are affordable for people to buy, and also to get more social houses built that people can get access to. In addition, we are looking at other options, such as cost-rental, which the Minister is developing and will allow for houses to be rented at 25% below market value. We want to bring voids back into use. In fairness to the Minister, with the July stimulus money we brought back 2,500 last year. We will bring back 3,000 this year. When we say "voids", we mean local authority housing that is not currently occupied. Those are the types of initiative that are being developed. The Deputy knows that. A range of measures, including the Affordable Housing Bill and the Land Development Agency Bill, are coming close to coming through this House and their commencement and they will create pathways to enable us to facilitate people to access housing in a much more affordable way than has been the case. That is the overall agenda of the Government, and housing for all will provide a broad range of measures and will illustrate the prioritisation of this issue at the heart of Government. It is a crisis facing society that has built up over time.

In terms of rent, I think that is a very comprehensive and important report today by the RTB. From our perspective, I think the Minister's initiative to reduce rent increases and link them to inflation is a very important and significant step and change, but also one that the Government entirely supports and is doable.

The Deputy's rent freeze of three years is just not doable constitutionally.

Comment on this

I did it for two years.

Comment on this

It is great to call for it, but it is just not doable. We have explored all aspects in relation to rent and rent freezes and we have been very clearly advised that it is not constitutional. That is just the position. It is easy to call for it. We are in the engine room in government and we have to-----

Comment on this

It is true, Deputy. We have to deal with what we can do and so forth. I think the Minister's initiative has been quite significant in terms of reducing the amount that rents can be increased by in line with inflation, which I think is a good step forward and one that was asked for in the House in terms of reducing the 4%. He did that.

Comment on this

We called for it in 2016.

Comment on this

Yes, but the Minister was not in government in 2016.

Comment on this

Fianna Fáil was as good as.

Comment on this

Different circumstances were pertaining. There is a need to increase capacity around house building within the local authority system. I am sure the Deputy knows that as well. That is something that we are very committed to doing.

Comment on this

I would challenge the Taoiseach regarding the rent freeze.

I do not accept it is not constitutional and at the very least, it should be challenged. Linking it to inflation when inflation is going up will not give certainty. The only certainty renters have at present is the date on which their rent will go up. That is completely unacceptable.

Affordability right across the spectrum, whether it is purchase or rent, is the key issue. There is little I can see the Government doing that will deliver affordability. In the case of the Land Development Agency, public land is being handed over and there is a profit motive. We look at the cost rental model with a profit element to it.

The Affordable Housing Bill debated last week was misnamed. We did not vote for it because we see it as the unaffordable housing Bill. Every expert group said some of the initiatives would drive up house prices. That is the last thing we need. I do not get the sense that the scale of this issue is understood by the Government. Will the Taoiseach tell us about the economic statement and what kind of budget will be available in terms of housing?

Comment on this

First, the summer economic statement will be published by the Government. There is no issue there. It is quite obvious the Government will look at frameworks around the summer economic statement looking out over five years. The Ministers for Finance and Public Expenditure and Reform work in harmony on that with the rest of Government. The point I made earlier is that it will reflect significant capital investment in whole areas of the economy, such as enterprise, environment and climate change but particularly in housing. The Housing for All strategy will reveal that.

The issue, as I said earlier, will not be one of resources. It will be one of delivery. That has to happen at local authority level in terms of the building, at approved housing bodies and through the Land Development Agency. It has to be a suite of measures. It cannot just be one particular measure. That is why there is a range of measures on affordable housing. I accept the Deputy voted against it. My understanding is Sinn Féin spoke against it but voted for it. While the Deputy did vote against it, my view is she was wrong in voting against it. It represents opportunities in terms of affordable housing, as does the commitment to build more social housing.

Comment on this