Brian Stanley questions reference rents and rent top-ups

Welcome to the members of the Housing Commission and thank you for your work, a lot of which I would agree with, some of which I don't, however, and I know among yourselves, you know, obviously there wasn't total agreement on everything, that's the world we live in, but the first question I have is for Patricia, I read with interest recommendations regarding rented accommodation, private rented accommodation, what should happen there, and for the start, Patricia, do you think the measures will work, today's measures, will they be inflationary, the reference rents, which is on page 116 of the report, where you say that you regulate market rents fairly and effectively by reforming them, and you mentioned reference rents, you know, maybe just explain that just very briefly, you know, in terms of what you mean by that, I think I'm, you know, very much open to the idea, I think that's, it might be more, might reflect more, the, what a rent should be in a particular area for a particular type house, more so than just 2% or a 0% whichever side you're on, just explain that, and just, there's, there's an unseen thing that's not being talked about, and obviously a report like this won't deal with it, but it's widespread, how do we halt rent top-ups that are not, that don't figure in rent reports, or don't figure in the books anywhere, how can that be stopped, there are the first three questions I have. All right, Patricia. Yeah, well I'll just deal with the, rent was very much Michelle's piece on the commission, but I'll just, Deputy, thank you for the question, so the reference rent is built on the notion that the average rent for comparable apartments or houses within the same locality, so what was the bottom line from perspective as a commission member was to try and have, inject and ensure ongoing and sustainable fairness in the system, so that it wasn't just about, you know, dealing with a particular moment in time, it was an ongoing system that could be regulated, that could, as I say, would deal with the actual rent for the comparable units within the same locality, and it's crucial for regulating the rent increases and safeguarding the tenant's right, so from, from the perspective of those, from a general perspective on the commission on the rent, Michelle, you might like to deal with it. Could I ask specifically, would it have, would it take account of energy rating, and would it take account of, you know, property size, just briefly, because we have only very little time? Yes, is the answer. Yes, okay, that's okay, that's all I need to know on that. Yeah. And in relation to, the last question I have on reference rents, would there be a limit in terms of, you know, would it be linked to inflation each year to increase, or would it be just whatever? Yeah, HICP was what we have in the, recommending in the report be the reference point, in, yeah, in terms of, that's what the recommendation is. Yes, and in relation to Michelle, top-ups, how, how should that be halted? It's more powers for the RTP, because tenants, tenants, as you know, are reluctant to complain. You mean top-ups in relation to have claimants, do you, Deputy? That's one form of top-ups. Other forms of top-ups that don't actually show in rent agreements, quite common. I suppose our view was that there needs to be more active regulation of the rental sector. So, on the one hand, there's been an unbelievable number of changes to rent regulations, which has undermined confidence of investors. On the other hand, the actual enforcement of many of these changes is extremely weak. So, we felt that the Residential Tenancies Board needs to make, take a more activist approach to identifying non-registered landlords, and a more activist approach to enforcement. But these are, not these are registered, but there's a side element to it. Yeah, but in terms of active investigations, rather than waiting for tenants to take complaints, an active enforcement of judgments through the courts. So, a better resource to RTB? Yes. Yes. Okay. And just on that as well, the standards within rent exercised the Commission quite a lot as well, which I'm sure I know, Deputy, you would have an interest in, because the standards is something that's not, dare I use the word, policed really well at all. And that was something that the Commission, there's a recommendation in there as well, which, again, is trying to ensure and to reinforce that point, that people in rent can be assured of a standard in terms of the rental property. I could ask you, Ms King, the first part of my question was, today's measures, will they work or will they be inflationary? The fact that our tenancies are changing from one tenancy to the next. Well, I'll answer you that, Deputy, and say, I would be the wrong person now to give you the answer to that. So, Michelle, you might... I would have thought you'd be the right person. Yeah. I wouldn't be the right... At this point, I would be the wrong person to give you that answer. Okay. It'd be a brave person that I'd go there, would it? What? It'd be a brave person that would go there. Yeah. I'd give you an answer on a lot of other things, but that one I won't. Okay. Does anyone want to give an answer on that? Michelle, want to give an answer on that, briefly? To my knowledge, there are different... Because I know the press conference is at the moment, isn't it? So, to my knowledge, there are different proposals for existing tenancies and new tenancies. So, the issue I have with that is, for new tenancies, I imagine the proposals will be inflationary. But it's also... Tenancies changing. That can be an example of rules of play. Our concern was that it would be a strong incentive to terminate the tenancy for landlords, particularly where the rent is way, way below market. Also, just one other point is that I understand the argument about new supply in private rental accommodation. That's very important. But it is also important that we retain existing supply. And in particular, small landlords pay a really vital role in housing people in HAP. Many of those rents are now well below market if they've been providing long-term accommodation. And I'm concerned that the system being proposed disincentivises this kind of long-term accommodation, which is very important. And briefly, could it load it more towards the big investor landlord? It has obviously more favourable to it towards them, maybe, than the small landlord. Well, that's my understanding of the proposals. Well, 50% of the accommodation is probably by small landlords. Yeah. I mean, Rona may have a different view, but that's my understanding of the proposals. Would Rona like to maybe just briefly answer that? I think it's actually even a larger share that's provided by smaller landlords. I think the other way to – it's important to view the market also in terms of movers and stayers. The stayers have enjoyed significant protections, but those unfortunate enough to be in the open market have borne the brunt of. In the case of Limerick and Galway, I think open market rents are three times now what they were in 2011. If you're a sitting tenant, you've seen a much smaller increase. And vacancy decontrol will reduce those inequalities a little bit. So it's a little bit of how you're measuring inflation. If you're measuring inflation for sitting tenants, it will probably go up. If you're in the open market, it'll probably go down. OK. Thank you. Thank you. Thank you.