Government package to entice builders to tackle rent crisis in Dublin and Cork

Developers who build affordable homes in Dublin and Cork will receive sweeteners under a package announced by the Government to tackle the rent and housing crisis.

Builders who develop homes in Cork with a sale price of less than €250,000 and €300,000 in the capital will be rewarded by up to €8,500 under the scheme.

The plans announced by Environment Minister Alan Kelly and Finance Minister Michael Noonan also restrict landlords to upping rent once every two years and will give more security to tenants who face eviction.

However, renters were still left with uncertainty last night as Mr Kelly said that the legislation would be introduced “as quickly as possible”, adding that he expects it to be brought in next week but could not give an exact date.

The two-pronged approach involves measures aimed at helping with spiraling rents, coupled with incentives to increase housing supply.

The new legislation will require 24 months between all rent reviews, meaning those who received a rent hike this year will not have another until 2017.

The measures also oblige landlords to provide more evidence that rent increases are in line with the local market rate.

Mr Kelly said: “A number of measures will be brought in to tighten up and ensure landlords — and a small number of landlords, I might add — can’t act unscrupulously in the termination of tenancy.

“For instance, statutory declarations will be required from landlords where they intend to sell their premises or where they intend to move their family member in; we feel at certain times they are being used as excuses.”

However, Sinn Féin housing spokesperson Dessie Ellis said that the legislation is far too weak, far too late, and does not constitute a real rent freeze.

Announcing the package, Mr Kelly said: “The issue of homelessness is a critical issue of this Government and a critical issue for this country. The key issues in relation to housing can be borne out into two distinct categories: The first category relates to rent and rental issues that we are all facing in this country, and the second issue is in relation to supply.”

Under the scheme, a rebate of between €8,000 and €8,500 will go to developers who build affordable homes.

It is hoped that this will help increase the supply of 7,000 affordable homes in Dublin and Cork, where the Government says there is a “significant mismatch between predicted demand and the current market response in terms of supply”.

The rebates will also apply to developments of more than 50 units completed and sold in 2016 and 2017.

He said the measures, which will be in place for 2016 and 2017, would “help deal with the real issue” regarding the cost base of developing units in Dublin and Cork.

Finance Minister Michael Noonan said: “I hope it works, I presume whoever is in government for the next five years, the supply issue will be a constant theme because as the economy grows and as more young people come back from abroad and as more young people come into the cities and begin to work there is going to be a demand on housing and there is going to be a demand on new builds.”

He added: “This is a very strong start but it’s not the end of the matter.”

Speaking at Cork Chamber of Commerce’s annual Dublin dinner last night, Taoiseach Enda Kenny said Ireland has now gone from a situation of building far too many homes to not building enough to support its growing population.

He said: “Today, the Cabinet signed off on a new package of measures to further incentivise the construction of new housing.

“As part of this package the Government will go further by introducing a targeted development contribution rebate scheme in Dublin and Cork, focused on large scale developments at affordable prices.”