Rent caps will be introduced next week in Dublin and Cork City and as early as next February in other cities and counties after a deal was finally struck.
After a standoff between Fine Gael and Fianna Fáil, the latter agreed to let rent controls pass through the Dáil — but only if other areas are assessed promptly as rent pressure zones.
But the two-month gap could allow landlords hike up rents in the meantime, it was warned, if certain counties or cities look set to apply rent rise caps next year.
A deal was agreed between Housing Minister Simon Coveney and Fianna Fáil yesterday, after two days of dispute which at one stage saw threats of the rent controls being withdrawn.
Under the measures, rent increases will be capped at 4% a year until 2019 in Dublin and Cork City as of next week.
Newer properties, vacant ones done up, and newer homes let out will be exempt, to help encourage supply in the sector. Mr Coveney though also told the Dáil that other areas will be prioritised for assessment as rent pressure zones.
These include areas around Cork City, Meath, Louth, Kildare, and Wicklow as well as the cities of Galway, Limerick, and Waterford. The residential tenancies board (RTB) will be asked to speed up its work on whether these areas meet the criteria to be zones.
Mr Coveney said areas beyond Dublin and Cork City may be assessed by February or sooner.
“If it needs it, the RTB will be given extra resources to get the work done and I expect to be in a position to make new designations by mid-January in some cases.”
The process for rent zones would be reviewed next year and a finance working group would start examining tax incentives for landlords in January, Mr Coveney told the Dáil.
Talks broke down late on Wednesday between the minister and Fianna Fáil’s housing spokesman Barry Cowen, which led to a planned Dáil debatebeing temporarily cancelled yesterday.
Mr Coveney also phoned Taoiseach Enda Kenny late on Wednesday night and again received his support to maintain Fine Gael’s position on the plan.
Mr Cowen initially wanted the 4% cap reduced to 2% and later insisted extra areas and counties needed to be designated rent pressure zones immediately.
But Mr Coveney refused to back down and instead Fianna Fáil accepted a pledge to speed up the process.
The climbdown by Fianna Fáil was viewed as a victory for Fine Gael and Mr Coveney, whose position as a potential leader of his party is likely to be strengthened.
But Fianna Fáil also claimed ownership of the process last night, with Mr Cowen insisting that their intervention led to the speedy examination of rents outside of Dublin and Cork city. Fianna Fáil sources also stressed they initially tried to limit rent rises to just 2%.
However, the row may have bigger implications for the survival of the three-year confidence and supply deal between Fine Gael and Fianna Fáil.
Opposition TDs debating the legislation in the Dáil last night also warned landlords may take advantage of the gap between the announcement of the plan and rent caps being applied.
Anti-Austerity Alliance TD Ruth Coppinger said Fine Gael had “alerted landlords” to limits. “We all know what is going to happen, it happened before,” she said, referring to the significant rent rises put on tenants after the last government’s two-year rent freeze.
Threshold’s Aideen Hayden said 100 people contacted the housing charity about rents going up this week.
The Dáil is expected to further debate the measures today before a final vote.
A drafting error was also highlighted by Sinn Féin TD Eoin Ó Broin last night, who warned it would result in an 8% rise for renters in year one, rather than 4%.
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