Saturday 10 December 2016

FG worried Kelly's rent controls for Budget will 'strangle' property market

Niall O'Connor and Daniel McConnell

Published 30/09/2015 | 02:30

Alan Kelly, Minister for the Environment
Alan Kelly, Minister for the Environment

Fine Gael is seeking a major watering down of Environment Minister Alan Kelly's rent controls for fear it could "strangle" the property market.

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Mr Kelly wants to link rent to inflation for a period of four years.

But there is concern within the Department of Finance that some of the so-called 'rent certainty' measures could result in a wave of landlords leaving the rental market.

Resistance is also growing towards Mr Kelly's plans to offer tax incentives for landlords who take tenants off the social housing waiting list.

Sources say such a proposal was formally sought by Mr Kelly last year but rejected by the department due to the potential cost to the exchequer.

Labour Party sources say Mr Kelly is desperate to secure agreement for the Coalition's rent strategy ahead of Budget day in a bid to appeal to both urban and younger voters.

Central to the plan is linking rent to the Consumer Price Index in a bid to tackle spiralling rent costs, particularly in Dublin.

Fine Gael sources have expressed concern about the plan and are insisting on the inclusion of a review mechanism.

"Kelly has been talking about so many different rent measures and while many are welcome, doing too much meddling could strangle the property market," said one minister.

Another Government source said Mr Kelly still has "several hoops to jump through" before he can secure Fine Gael agreement on the package.

Meanwhile, Mr Kelly is due to meet a number of county and city managers today to discuss the response from local authorities to the housing crisis.

Yesterday he brought emergency proposals to fast-track the planning and procurement process for modular homes to Cabinet. The ultimate plan is to provide 500 units, mainly in the Dublin area, but sites have yet to be finalised.

The selection of sites for factory-built homes for Dublin's homeless families has already begun in a bid to end the use of B&B and hotel accommodation.

Mr Kelly said homelessness was a complex issue.

"I will be bringing forward proposals to Government in relation to the whole issue of modular housing and how we can expedite that as quickly as possible through fast-tracking planning and procurement as necessary."

Irish Independent

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