SINN FÉIN’S RENT freeze bill is expected to be put to a vote in Leinster House today, with the proposal receiving backing from Fianna Fáil, putting the government under pressure.
The bill proposes a nationwide freeze on rents for the next three years as well as a tax rebate, to assist renters in the current difficult market. The latest figures from Daft.ie in November showed that the average monthly rent in Ireland had risen to €1,403.
Here, David Kenny – Assistant Professor of Law at Trinity College Dublin and co-author of the leading text on Irish constitutional law, Kelly: the Irish Constitution – explores the proposed legislation.
Minister for Housing Eoghan Murphy told the Dáil on Tuesday that Sinn Féin’s bill was unconstitutional.
The Minister suggested that this was immediately apparent from reading the Bill. It is not so simple.
There is an argument that the proposed rent freeze is unconstitutional, and a risk that it could be found invalid by the courts. But this is far from clear.
What does the Constitution say?
The Constitution protects private property rights in Articles 40.3 and 43.
We enjoy “the natural right… to the private ownership of external goods”, and the State is constitutionally prohibited from any “unjust attack” on these rights.
Property rights have been invoked by citizens to invalidate laws that take away or restrict their property rights unjustly.
But these rights are not absolute, as the Constitution makes clear. It balances private property with the common good.
The Constitution says that property “ought, in civil society, to be regulated by the principles of social justice”, and so the State can limit property rights “with a view to reconciling their exercise with… the common good”.
That is, property rights can be taken away, but this has to be in service of the public good.
The Constitution does not define what the common good or social justice consist in.
This is worked out in context, and changes with the needs of society. If challenged, the State will have to offer some common good that is served by any interference with property.
The courts can review this reason to ensure it is, in their view, sufficient to justify the infringement of rights.
This has happened before
There is some Supreme Court precedent to suggest that the rent freeze bill could be unconstitutional. In the 1980s, very strict rent controls were invalidated by the Supreme Court in a case called Blake v Attorney General.
The Court found that the effect of these restrictions on the property owners who took the case was quite severe, reducing greatly the value of the properties and their ability to generate income.
They claimed that these restrictions caused them real financial hardship, sometimes causing them to rent their properties at a net loss.
A bill was later introduced to reintroduce these rent controls to temporarily phase them out rather than have them disappear overnight.
This too was invalidated by the Supreme Court. These cases would suggest there is a possible constitutional case against the rent freeze bill.
But there are good arguments against this. The rent controls invalidated in the 1980s were bizarre.
Only certain properties were designated for rent control, and these had been chosen more during World War I and never been thoroughly reviewed.
The controlled rent for most of these properties was pegged to 1914 or 1941 rents, despite massive increases in incomes in the interceding decades.
The core issues were that the selection of properties was arbitrary, and could not easily be linked to any pressing public need, and that the restrictions were of indefinite duration.
This bill could pass the test
The current rent freeze bill proposed by Sinn Fein is to last for three years, to apply generally, and is done in the context of a housing crisis. There is a good argument, then, that it is very different from the law in Blake.
Moreover, the potency of property rights in the Constitution is often exaggerated. The courts, particularly in recent decades, have given the Oireachtas a lot of leeway in restricting property rights in the common good.
Courts give deference to legislative judgement on what is needed to achieve the common good, as the Oireachtas has particular expertise and a unique perspective on the needs of social justice.
For example, the Supreme Court upheld a very significant restriction on property rights in the Planning and Development Bill 1999, which took land from developers at a price well below market rates to use for social housing.
When assessing if a restriction on property rights is unconstitutional, the courts apply a proportionality test: they assess if the benefit of the law in advancing the common good is outweighed by the harm to personal rights.
In assessing this, context is king: the courts have to consider the particular objectives of the law and the current social problems it is designed to address.
The scope and scale of the current housing crisis, and the fact that this is a time-limited measure that will not indefinitely restrict rights, would suggest the law could be upheld under this test.
Down to the discretion of the courts
In short, there is an argument that the rent freeze bill violates constitutional property rights, but it is not at all clear that this argument would succeed.
There is a good chance that, in deference to the Oireachtas’ judgment and the scale of the housing crisis, that the courts would uphold the Bill.
Indeed, I cannot think of any Supreme Court precedent on property rights in the last 20 years that would suggest the courts would invalidate a measure such as the one under discussion.
President could refer it for test
If the government is concerned about the constitutionality of this bill, there is a mechanism to address this.
Article 26 of the Constitution says the President may refer any bill to the Supreme Court to test its constitutionality before he signs it into law. This is a power President Higgins has never used.
Given the government’s concerns, he might be willing to use this mechanism.
The courts, not the government, get to make final determinations on what is unconstitutional.
On so important a matter, where the constitutional law is not clear, the Supreme Court should be given the final word.
David Kenny is an Assistant Professor of Law at Trinity College Dublin and co-author of the leading text on Irish constitutional law, Kelly: the Irish Constitution.
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