Tuesday 28 February 2017

The rent row explained: What it means for renters, landlords, Coveney and the minority government

Kevin Doyle

Kevin Doyle

Renters and inset, Simon Coveney (left) and Barry Cowen
Renters and inset, Simon Coveney (left) and Barry Cowen

An unprecedented crisis is facing the minority government today after Fianna Fáil refused to back Housing Minister Simon Coveney’s plan to tackle the rental crisis. A Dáil debate for 10am has been cancelled as both sides refuse to compromise.

Independent.ie’s Political Editor Kevin Doyle takes a look at what happens now… 

'It will be a trial and error situation no matter who ‘wins’ the game of brinkmanship.' Photo: Gareth Chaney Collins
'It will be a trial and error situation no matter who ‘wins’ the game of brinkmanship.' Photo: Gareth Chaney Collins

For renters:

Over 700,000 renters have been left in limbo by the row between Fine Gael and Fianna Fáil. Already Threshold has received calls from tenants whose landlords have tried to hike rents in advance of a rent cap being introduced. The advice is to hold tight and see what happens over the next 24 hours.

For landlords:

The good news is that the one area where the two parties reached agreement was that there should be some sort of tax incentives for landlords. However, that won’t happened until at least 2018. Finance Minister Michael Noonan is to set up a working group to look at the issue next month with any measures to be announced in October’s budget. On the issue of rent caps, landlords in Dublin and Cork city will be on tenterhooks. Fine Gael and Fianna Fáil agree these areas should be designated as ‘Rent Pressure Zones’ (RPZs) and be subject to a rent increase cap for the next three years. The dispute is over cities of Galway, Limerick and Waterford as well as certain towns in Meath, Louth, Kildare and Wicklow. Fianna Fáil want them immediately designated as RPZs but Simon Coveney says this can’t be done without further research on current prices.

Fianna Fáil's Barry Cowen Photo: Tom Burke
Fianna Fáil's Barry Cowen Photo: Tom Burke

For the Government:

The Government has withdrawn plans to debate legislation which would have given effect to the rental strategy in the Dáil this morning. The move is a drastic one but Simon Coveney felt he had no option, telling Independent.ie that Fianna Fáil were trying to make a “farce” of it. The Dáil is due to close for its Christmas holidays at 10pm tonight. A compromise will have to be reached early in the day or the plan falls.

For Fianna Fáil:

Fianna Fáil believe they are on the side of tenants in the large cities outside Dublin and Cork as well as the commuter belt. Their compromise was to allow the annual rent cap be set at 4pc despite arguing it should be as low as 2pc. Unless Mr Coveney gives some movement on RPZs then Barry Cowen is unlikely to budget. It’s a dangerous game because many renters will believe that some form of deal would be better than doing nothing at all heading into Christmas week.

For Simon Coveney:

This is high stakes for everybody involved but particularly Housing Minister Simon Coveney. This is his baby. Months of work have gone into it. He had to convince the Department of Finance that some form of intervention was warrant and then had difficulty bringing some of the Cabinet on board but the resistance from Fianna Fáil is unprecedented. If the minister cedes too much ground to the Opposition party he will be seen as weak. If he refuses to budge the plan could collapse altogether. It’s a tightrope. A win for Mr Coveney would significantly boost his chances of being the next leader of Fine Gael. A loss could cause irreparable damage and hand the initiative to rival Leo Varadkar.

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