herald

Sunday 11 December 2016

Coalition's rent strategy hits snag as FG/Labour clash over details

Alan Kelly hopes to tackle spiralling rents
Alan Kelly hopes to tackle spiralling rents

The Coalition's long-awaited rent strategy has been stalled amid concern within Fine Gael over the prospect of creating fresh volatility in the property market, the Herald can reveal.

Environment Minister Alan Kelly is preparing to unveil a suite of measures in the coming weeks in a desperate bid to tackle spiralling rent prices, particularly in the capital.

The package will continue a series of measures aimed at introducing "rent certainty", including long-term leases and a major beefing up of tenants' rights.

Linking rent increases to inflation is also a major component of the plan, the Herald understands.

Extending the notice period for introducing a rent hike, as well as placing a requirement on landlords to produce details of three comparable properties in order to justify an increase, is also on the table.

Mr Kelly is being guided by a consultants' report that recommends the introduction of special rent certainty leases, which could have a set term of at least five years.

But Fine Gael is worried that the proposals could stifle investment and result in thousands of rented properties leaving the system.

The party is instead insisting that the strategy focuses heavily on improving supply and wants to reduce development levies in a bid to kick-start the construction industry.

Incentives

Another sticking point relates to plans to introduce so-called tax incentives for landlords who agree to keep rents down.

Coalition sources have said such a move is now a "budgetary matter" and will therefore be considered by Finance Minister Michael Noonan and not as part of the package.

A senior Labour source said the party is still "trying to convince" Fine Gael on the merits of new rent-control legislation.

"It could be done if the Taoiseach agreed with it," said the source.

Nonetheless, sources in both Fine Gael and Labour last night said they expect agreement on an overall package to be reached in the coming weeks.

"The package is at a very advanced stage, and it's now a case of just working on some of the areas that have caused concern," said a coalition source.

It is understood that the details of the plans will be considered by the Economic Management Council (EMC) next month.

Sources said the plan will consider strongly the continued social housing and homeless crisis, which is particularly serious in Dublin.

Fine Gael will try to ensure that the plan focuses heavily on boosting supply. Sources within the party are deeply concerned about delivering a rent-control strategy.

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