Rent control debate postponed

UPDATE 10am: The Dáil debate on the government's new housing strategy has been postponed - amid signs the scheme could be abandoned.

The Government’s controversial rent control measures look set to pass through the Dáil today after Simon Coveney faced down a backlash from Fianna Fáil.

Crunch meetings continued late into the night but the housing minister’s measures to allow landlords increase rents by up to 4% looked set to remain in place.

Fianna Fáil had lobbied strongly to reduce this to 2%.

However, in a slight concession to the opposition the scheme is likely to be expanded to Galway, Limerick, Waterford and the commuter belts around Cork and Dublin early in the new year.

The proposals will now be debated in the Dáil today before it breaks for Christmas.

Simon Coveney had threatened to pull the rent control measures if Fianna Fáil would not accept the plan to impose a cap on rental increases of 4% in so-called “rent pressure zones”.

The Taoiseach backed Mr Coveney’s plans and said there was no question of reducing the 4% cap on rent increases.

At a meeting of the Fine Gael parliamentary party Enda Kenny told TDs and senators that the limit would not be adjusted and it was 4% or nothing.

But one minister last night told the Irish Examiner he would have difficulty supporting the legislation that will guarantee landlords get 12% in increased rent over three years.

Junior jobs minister John Halligan, of the Independent Alliance, might seek a free vote on the rent legislation.

“I personally think there should be a [rent] freeze over 12 months until we analyse why rents have gone this way.”

Siptu also called on Mr Coveney to reconsider his plan as they said it does not address the issues of security for tenants.

From early in the day Mr Coveney ruled out any negotiation around the 4% rent cap and maintained it had “already been negotiated”.

“The 4% in my view is important, if you look at where we want inflation to be — it’s about 2% — and to offer people a margin of 2% above increases in the cost of living is a very modest margin.

He said he would not support an amendment to bring the cap down to 2% adding that if Fianna Fáil insisted on this the legislation would not get through the Dáil before Christmas.

“And if Fianna Fáil want to take that on themselves so be it.

“There are things we can do in relation to some of the Fianna Fáil queries,” he said referring to broadening out to areas outside Dublin and Cork.

The deadlock was discussed at meetings of both the Fine Gael and Fianna Fáil parliamentary parties last night.

Fianna Fáil called for other electoral areas to be immediately designated rent pressure zones, beyond Dublin and Cork.

TDs Sean Fleming and John McGuinness both warned how rents had shot up in Portlaoise and Kilkenny respectively.

Fianna Fáil TDs and senators also feel aggrieved they were “bounced” into Mr Coveney’s rent strategy and were given little details about the plan before it went public earlier this week.

Speeding up assessments of areas for rent caps was more important than getting a lower rate agreed, some members afterwards told the Irish Examiner.

However Micheál Martin told his party that no progress had been made and members were also told that there was a 50/50 chance of agreement being reached.

Meanwhile the Economic and Social Research Institute (ERSI) has said it was not “particularly enthusiastic” about the Government’s proposed rent controls and favours boosting housing supply, through an “aggressive” site tax instead.

Unveiling its latest quarterly outlook, research professor, Kieran McQuinn said fast-tracking a site tax would help boost “a lot” of supply and take out of the “equation” another bubble in land prices.