Sunday 22 January 2017

Threat to Government as Fianna Fáil demands extension of rent plans

Published 14/12/2016 | 02:30

Fianna Fáil's Micheál Martin. Photo: Arthur Carron
Fianna Fáil's Micheál Martin. Photo: Arthur Carron

Fianna Fáil is to demand that 'Rent Pressure Zones' are extended beyond Dublin and Cork to other major cities and commuter towns.

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The party is set to play hardball with Housing Minister Simon Coveney over his rental strategy, arguing his proposals to limit rent increases in the two main cities to 4pc annually "won't fly".

They also want tax incentives for landlords to be introduced as part of the package.

The development threatens the stability of the minority Government as Finance Minister Michael Noonan has ruled out any new tax measures before October's Budget and Mr Coveney has already said he is "not going to be able to be flexible" in terms of the 4pc figure.

In a statement issued after the Fianna Fáil frontbench met last night, their housing spokesman Barry Cowen said they had "genuine concerns" with the plans "limited geographical scope".

"We are anxious that other cities be added immediately and will be asking that Galway, Limerick, Waterford and large population centres surrounding Dublin and Cork city are included from day one," he said.

Mr Cowen described their position on the rent increase cap of 4pc as "not satisfied".

It is understood that the party would prefer a figure of 2pc - but this is likely to be vehemently opposed by the Finance Department, which is sceptical about the Government intervening in the market.

Speaking at the launch of the plan, Mr Coveney said he would not be open to making significant changes as this would require Cabinet approval.

"I hope Fianna Fáil will help us get this done before Christmas. I think that's needed," he said. He added it would be "very unhelpful" to announce measures and not implement them immediately.

"Because then you do have unintended consequences where a market wants to react before a designation actually comes in," said Mr Coveney.

Asked whether changes could be made, he replied: "I have approval from Government now for this strategy, not a different one. We're not going to be able to be flexible in terms of changing a whole series of the recommendations or the numbers here."

The resistance from the Opposition party comes after Mr Coveney faced criticism at Cabinet level from his leadership rival Leo Varadkar for failing to fully engage with other ministers before announcing his plans.

The Irish Independent understands Mr Varadkar told yesterday's Cabinet meeting he was annoyed by the lack of consultation. His department oversees the rent supplement and Housing Assistance Payment schemes.

Sources said while he gave the strategy his full support, he raised concerns "about a couple of points". One of these was that landlords in commuter-belt areas could put up rents in the short-term as a result of the move.

He also asked what would happen in Dublin and Cork at the end of the three-year period.

Separately, Mr Noonan is said to be concerned about the impact of interference in the market.

Irish Independent

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