Blow for Kelly as Howlin twice fails to back rent proposal
Published 14/10/2015 | 02:30
Environment Minister Alan Kelly's bid to introduce 'rent certainty' has been dealt a major blow after his Cabinet and Labour Party colleague Brendan Howlin twice declined to express support for the proposal to link rent to inflation.
Major tensions within the Coalition over Mr Kelly's rent plans have overshadowed yesterday's giveaway Budget.
The Departments of Finance and Environment are at complete odds over several measures within the plan, which has been worked on by Mr Kelly's officials for several months.
Central to the row is the Labour deputy leader's bid to link rent to the Consumer Price Index (CPI) until 2019 in a bid to keep accommodation costs at an affordable level while supply is increased.
Finance sources have expressed deep concerns over what they described as Mr Kelly's desire to "interfere and distort" the market, saying its impact could have been disastrous.
One source described the plan as "barely economically viable".
But Labour sources have rejected the claims, warning that rent certainty is essential in a bid to address the homeless crisis.
One Labour source pointed out that the proposal was recommended by the National Economic and Social Council (NESC), which advises the Government on certain policy areas.
Finance officials have claimed that they agreed in principle on Friday to the providing tax relief to landlords as part of a rent certainty plan.
But ahead of yesterday's Budget, Mr Kelly said he was not happy with the proposed package as it stood.
In a further blow, Mr Howlin twice declined to express support for the specific proposal to link rent to inflation, which is the central plank of Mr Kelly's plan.
Mr Howlin said that while there was no "fundamental difference" between the two parties on addressing the need for rent certainty, he is opposed to any measures that "distort the market".
"We are looking for mechanisms that will work," he added.
He said some of the measures being looked at are "short term" only, and that the way to tackle the housing crisis is to increase supply.
During his own Budget press conference, Mr Kelly appeared to become defensive when quizzed about the plans. He said further discussions would take place next week. Mr Kelly instead spoke about plans to increase supply through the delivery of 20,000 homes by Nama.
He said that rent certainty was not a "budgetary matter" despite previously signalling his wish to have the plan finalised by Budget day.
"Who do you think brought up the issue in relation to using Nama so you can write whatever you want but the reality is that in the coming weeks you will also see issues come up in relation to rent.
"I'm very happy that Nama is finally being used for what I believe it should have been used for and there is a social dividend in affordable housing, particularly for people in Dublin and the surrounding areas," Mr Kelly said.
"And I also expect there to be other measures, but we are looking very closely with the departments of Public Expenditure and Finance in relation to a further comprehensive package for housing, many of which are not budgetary issues," he added.