Coalition's rent strategy hits snag amid fears new measures will hurt investment
The Coalition's long-awaited rent strategy has hit a snag amid concern within Fine Gael about creating fresh volatility in the property market, the Irish Independent can reveal.
Environment Minister Alan Kelly is preparing to unveil a suite of measures in the coming weeks in a desperate bid to tackle spiralling rent prices, particularly in the capital.
The package will continue a series of measures aimed at introducing 'rent certainty', including long-term leases and a major beefing up of tenants' rights.
Linking rent increases to inflation is also a major component of the plan.
Extending the notice period for introducing a rent hike, as well as placing a requirement on landlords to produce details of three comparable properties in order to justify an increase is also on the table.
Mr Kelly is being guided by a consultants' report which recommends the introduction of special rent-certainty leases, which could have a set term of at least five years.
But Fine Gael is worried that the proposals could stifle investment and result in thousands of rented properties leaving the system.
The party is instead insisting the strategy focuses heavily on improving supply and wants to reduce development levies in a bid to kick-start the construction industry.
Another sticking point relates to plans to introduce so-called tax incentives for landlords who agree to keep rent down.
Coalition sources have said such a move is now a "budgetary matter" and will therefore be considered by Finance Minister Michael Noonan and not as part of the package.
A senior Labour source said the party is still "trying to convince" Fine Gael on the merits of new rent control legislation.
"It could be done if the Taoiseach agreed with it," said the source.
Nonetheless, sources in both Fine Gael and Labour last night said they expect agreement on an overall package to be reached in the coming weeks.
"The package is at a very advanced stage and it's now a case of just working on some of the areas that have caused concern," said a Coalition source.
It is understood the details of the plans are set to be considered by the Economic Management Council (EMC) next month.
Sources say the plan will consider strongly the continued social housing and homeless crisis, which is particularly serious in Dublin.
Fine Gael will attempt to ensure that the plan focuses heavily on boosting supply.
Sources within the party are however deeply concerned about delivering a "rent control" strategy.
"We can't do anything that stifles investment. The issue for us is supply and how we can create more homes for people," a party source told the Irish Independent.
A central component of the rent plans, being led by the Environment Minister, will be a major beefing up of tenants' rights through regulatory measures.
This is expected to include extending the notice period for rent increases to three months - allowing tenants more time to assess their options and seek alternative accommodation.
Such a move would also give a tenant greater manoeuvrability to "collate data" if they wish to seek a review into the rent hike.
Speaking on the strategy yesterday, Labour senator Aideen Hayden said she is "pretty hopeful" of securing Fine Gael's support.
Ms Hayden, who is chairperson of the Threshold housing agency, added that her party wants the legislation put into place by October.
"I am aware that there is legislation before government that has been drafted, it certainly has full Labour party support," she told RTE's 'Today with Keelin Shanley'.
"If we can get Fine Gael, our partners in Government, behind it then it will be on the legislative books by October," Ms Hayden added.