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DAIL DEBATE
DÁIL ÉIREANN
Question again proposed: "That the Bill be now read a Second Time." An Leas-Cheann Comhairle: Deputy Kelleher was in possession and has 14 minutes remaining. Mr. Kelleher: It is some time since I moved the adjournment of this debate so I might repeat some of what I said on the last occasion. This is a most important Bill and I welcome the opportunity to speak on it. I compliment everybody involved in the initial debate and discussions which resulted in the introduction of this legislation. There was wide consultation and the Bill contains solid proposals to ensure that the rights of both the tenant and landlord are adequately addressed. As a result of the pressures in the housing market and the cost of housing, more people are entering the rental sector. That is something we must accept. This legislation acknowledges that and seeks to provide a legislative framework that accommodates the rights of both those who provide the rented accommodation and those who rent it. In the 1970s and 1980s the standard of private rented accommodation was poor. It has improved in recent years not only because of modern building standards but also because people will not accept the poor standards. The policies that have been pursued in recent years to ensure an adequate supply of housing are also having an effect and there is top quality private rented accommodation available. However, the cost of private rented accommodation is exorbitant in some places and particularly in the centre of cities where there is huge demand from people with large disposable incomes who wish to live near their workplaces. The increase in the cost of rented accommodation, as well as the demand for housing and the pressures in the housing market caused by the population increase that resulted from immigration and the economic boom, have created much difficulty. However, ten years ago only 22,000 housing units were being built each year in this country whereas we are now at the record level of 57,000 completions and it is projected that we will reach 60,000 completions next year. Supply is the key issue and we must ensure that any blockages in the system that hinder the supply of accommodation in the private rented or private ownership sectors are removed. It must be acknowledged that some developers in larger urban areas have been hoarding land. That must be addressed and the Government and all politicians are conscious of that. It is time to take action to force the people who are hoarding land to release it so we can increase the supply of housing. In some areas up to €50,000 per unit is incurred in costs on development land and that is being passed on directly to the mortgage holder or the person in the private rented sector. We must address the issue of land supply. The issue of planning is not dealt with in the Bill but it is within the remit of the Department. Local authorities must accept responsibility for the lack of planning in the past. There was a major upsurge in economic activity and in the population. The demographic bulge demanded the provision of accommodation but the local authorities were slow if not inactive in addressing it. It was sometimes necessary to wait for up to seven years for some county development plans to come on stream until it was made mandatory to make such plans every five years. A system must be put in place whereby local authorities can become more proactive. They must have the means to address the trends that are developing in their cities and other areas and to ensure that there is an adequate supply of land. Let us be under no illusions. The difficulty is that while county and city development plans contain areas that are zoned for residential development, it does not mean that the lands are available to the market. The person who owns the land might not be willing to sell it at a certain price or to sell it at that time. It is not fair or practical for planners or county and city managers to say that a number of hectares of land are zoned for housing to cope with projected housing demand when many of those landbanks might not be available for development. It could be due to developers hoarding the land and inflating the market or simply that people do not wish to sell a parcel of land for whatever reason. We have to address this issue in the short term. Otherwise this difficulty will continue. It is projected that we will need more than 60,000 housing units per year for the next ten years to address demographic trends, immigration and the changes in the population. These statistics are probably conservative given that the EU is expanding and there is a possibility of more people immigrating to this country because of the strong economic growth that still prevails as a result of the Government's policies. The economy is expected to pick up and to continue to grow. The thrust of the Bill is to ensure security for tenants and to provide for a mechanism to deal with tenants who are not appreciative of the property they rent. There is an onus on tenants to look after the property in a proper manner. The most important aspect of the Bill is that it provides for a dispute resolution mechanism to address the grievances of tenants or landlords. In my experience, many tenants are vulnerable and find it difficult to make ends meet. It is traumatic for them to live without security of tenure. If they have a dispute with a landlord, the only way it can be addressed is by going to court and in many cases these people would not have the means to pursue their rights and entitlements as tenants in the courts. This Bill gives me an opportunity to speak on a number of issues that must be addressed. One is the practice of stage payments. This will have to be seriously examined. The Irish Homebuilders Association, in conjunction with the Department, will have to bring forward guidelines or a voluntary code for the construction industry to ensure that stage payments are no longer an accepted practice. It is unfair that people are funding the cost of the development of their homes, while waiting to take possession of them and at the same time having to rent private accommodation. I have major concerns about this practice, which happens in some parts of the country. First of all one has to pay a booking deposit, followed by further payments on signing the contract and when the ground works are completed. A further payment is due for the joist level, followed by a final payment on completion when the mortgage is drawn down. It is inherently unfair on young people who are trying to get on the property ladder and purchase a home. Another obstacle is being placed in their way because they must drawn down a partial amount of the mortgage prior to taking possession of the house. They are funding the development instead of the builder or developer funding it themselves and then selling the house on completion. This practice, which is taking place in some areas but not in others, must be examined. The Irish Homebuilders Association has a voluntary code but we must examine this practice and perhaps legislate to address the difficult problems young people have in acquiring property. Local authorities themselves have neglected the rights of tenants. Council estates can easily be identified by the dilapidated state of their grounds, including a lack of trees and poor grass cutting, as well as poor amenities. We will have to address this matter because a local authority tenant is entitled to the same treatment as anyone else. Even if they have to make a small contribution to this end, grounds, parkland, lights and footpaths should be maintained to an acceptable standard. Such standards are currently required from developers building estates through the bonding system. Many local authority estates were built back in the 1960s and 1970s and may not have featured today's quality of building materials but there is no excuse for local authorities not to address the aesthetics of such housing. It is like the broken window syndrome: if these issues are not addressed it further exacerbates the problem and people begin to lose interest in the community association and in maintaining their housing estate, with repercussions of which we are all too well aware. I am not sure how we can address the landbanks issue but perhaps the expertise within the Department could come up with some imaginative solutions. Huge profits have been made in recent times due to the increased demand for housing. However, some mechanism is required to deal with the situation, perhaps through changes in the constitutional provisions on property ownership and through changes in the taxation code whereby people could be encouraged to release land immediately to increase the supply available for development. In the budget some years ago, changes were made to capital gains tax, which was used as a carrot and stick approach to encourage people to sell land in order to increase the supply. There was such a continual increase in the price of development land, however, that landowners who hoarded land were able to sit it out knowing full well that after a number of years the capital increases would far outweigh the problems associated with an increase in capital gains tax. We will have to re-examine those matters. Changes to the law on property ownership would require a constitutional referendum and while property owners would be concerned about that, we must be concerned with the greater public good. A compromise will have to be reached just as this Bill reached a compromise between tenants and landlords. The Irish Property Owners Association has stated it would prefer if this Bill was not, as it considers it to be, biased towards tenants. However, tenants who are renting property are most entitled to security of tenure. Very often they are on the threshold, trying to get on the property ladder, and, as such, they are vulnerable. In that respect, I welcome the provisions of the legislation. The best way we can address the cost of rental accommodation for ordinary people is to create a real supply of top quality accommodation. That would address the rental difficulties that are being experienced. Rents have decreased in some areas because of the increase in supply following the policies being pursued by the Government. I welcome the Bill and congratulate everybody who was involved in the initial stages of its drafting, as well as those who have taken part in the debate. I commend it to the House and wish it a speedy passage through the Oireachtas. |