Saturday 22 July 2017

Labour abandons the idea of linking rent to inflation

Junior Minister Kevin Humphreys and Social Protection Minister Joan Burton at the launch of the MABS mortgage arrears service. Photo: Damien Eagers
Junior Minister Kevin Humphreys and Social Protection Minister Joan Burton at the launch of the MABS mortgage arrears service. Photo: Damien Eagers

Kevin Doyle and Wayne O'Connor

The Labour Party will not seek to resurrect its plan to link rent increases with the rate of inflation after the General Election, Tánaiste Joan Burton has indicated.

Ms Burton said the new rent certainty measures announced last month needed time to take hold and that in the meantime the focus would be on increasing construction of new homes.

Asked whether her party still championed the idea of linking rent increases to the Consumer Price Index (CPI), Ms Burton said: "The rent certainty - in terms of the two years that has gone into effect now - we'll have an opportunity to see how that works.

"I think it will have quite a positive effect. But more importantly at the moment we switched over in Social Protection to providing rent supplement on a negotiated one-to-one basis for families having difficulties with either finding properties or renewing their lease."

It comes after a Freedom of Information request revealed Environment Minister Alan Kelly had doubts about regulating the rental sector just 12 months before he caused a government storm over his CPI proposal.

Mr Kelly wrote to the Department of Finance in September 2014 warning that he was not convinced rent controls were "warranted or desirable".

However, in advance of Budget 2016 he took a very different line, causing a massive split at Cabinet as he insisted that regulation was necessary to stop spiralling rents.

Ms Burton now says that measures included in the Budget will encourage more landlords into the market.

"There are more landlords now coming back but also a little-noticed feature of the Budget is that landlords who rent to rent supplement tenancies from the first of January will be entitled to a further tax break in relation the calculations of their earnings for rental purposes.

"I believe when accountants and other advisers advise landlords about that, that that will make the social rent option much more attractive to landlords," she said.

Focus Ireland revealed yesterday that about 1,000 children under the age of eight are homeless. The vast majority of these are located in the Dublin region.

Asked why modular homes promised to help alleviate the problem would not be available before Christmas, Ms Burton said: "There have been a couple of difficulties including a number of disturbing pickets and protests at one of the modular developments.

"That was not resolved until recently and there were people with balaclavas and so on threatening the development site."

She added: "I don't think that these people were doing any service to people without a home. I understand that it has been resolved but the consequence of that was that it delayed the development by a couple of weeks."

The Tánaiste defended the Government's performance on housing, saying that a year she pointed out the "scandal" of houses in Dublin city being boarded up while people were looking for homes.

"We set a target of 1,000. Coming to the end of the year there will be 2,500 previously boarded up voided apartments and houses that will have been given out," she said.

Irish Independent

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