herald

Monday 16 January 2017

Rent deal goes to the wire as FF calls for 4pc limit on rises to be halved

Simon Coveney Picture: Doug O'Connor
Simon Coveney Picture: Doug O'Connor

A late-night showdown brought the core of Housing Minister Simon Coveney's rental strategy for Dublin close to collapse last night.

Fianna Fail laid a series of demands before the Government, insisting it wanted the maximum rent increase of 4pc halved and for Rent Pressure Zones (RPZs) to be extended beyond Dublin and Cork.

However, Mr Coveney ref-used to budge on the 4pc figure.

With the backing of Taoiseach Enda Kenny, the minister told Fianna Fail's housing spokesman Barry Cowen that he would allow the legislation to be delayed rather than reduce the cap to 2pc.

This would open a window for landlords to hike rents in advance of Government intervention in the market.

In a letter to Mr Cowen that was seen by the Herald, Mr Coveney outlined a series of reasons why he would rather scrap the rent cap altogether than lower it.

"To go for a lower figure would effectively be trying to introduce rent controls while encouraging supply. These are mutually exclusive objectives," the minister wrote.

Mr Kenny told a meeting of Fine Gael TDs and senators in Leinster House last night that renters will be left in a "perilous position" unless legislation passes through the Dail today.

Uncompromising

The minister gave a presentation of the plans to the meeting and received "unanimous" support for his uncompromising position.

Mr Coveney outlined that the 4pc figure was reached after months of research.

It is based on a "need to ensure a reasonable rate of return on investment to ensure that there is no spike effect at the end of the period of the designation".

He noted that the level chosen is 20pc lower than the long-running annual rental increases in Ireland and is less than half of the current rate of rent inflation in Dublin and Cork.

A number of TDs even suggested they should pass a motion wedding the party to the 4pc figure.

However, a similar meeting held by Fianna Fail heard diverging views on how far they should push the row.

Sources said that a majority of speakers felt much more strongly about the extension of RPZs to other cities and commuter belts than they did about the 4pc rate.

Mr Coveney and Mr Cowen engaged in a series of meetings late into the night in an attempt to reach a deal.

An amendment to the Government legislation placed by Fianna Fail sought to have the city areas of Galway, Waterford and Limerick designated as RPZs.

Government sources said Mr Coveney did offer to give non-legislative "assurances" around a timeline for the designation of Galway, Limerick and Waterford cities as RPZs.

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