Tuesday 27 September 2016

Still a long way from getting houses in order

Published 07/11/2015 | 02:30

'Alan Kelly's sticking to his guns has partially paid off. Something desperately needed to be done. Since taking office, the Government has seen rents soar by up to 35pc'
'Alan Kelly's sticking to his guns has partially paid off. Something desperately needed to be done. Since taking office, the Government has seen rents soar by up to 35pc'

The showdown between Fine Gael and Labour on the rent row was in danger of being dubbed 'High Noonan'. But in the great tradition of all epic Mexican stand-offs, it ended with the Finance and Environment Ministers both walking into the sunset and claiming partial victories.

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And for all those tenants on the receiving end of rent increases, there is at last some relief. They may not get 'certainty', but there is a greater element of security.

Alan Kelly's sticking to his guns has partially paid off. Something desperately needed to be done. Since taking office, the Government has seen rents soar by up to 35pc.

They can now only be reviewed every two years. But instead of hammering out one comprehensive solution, they hit upon a range of measures, thus eschewing all-out rent control. As a result, Michael Noonan also had his way.

And when the final result is likely to be compromise, it is often prudent to start from an extreme position.

It is unlikely that Alan Kelly was following the above advice that was once proferred by the economist John Maynard Keynes. And even if he was, while it doesn't fully explain the tantrums in the negotiations, perhaps it partially excuses them.

Yet while the agreement addresses some issues, it avoids many others. The critical point in solving the housing crisis is the issue of supply. We are building about 13,000 houses annually, whereas we need 25,000. With such a mismatch between supply and demand, the prospect of 'rent certainty' was always going to be a small dot on a distant horizon. All the same, a step in the right direction has been achieved. But there are many more to be taken.

A programme of social housing has to be put in place. Obstacles to planning must also be urgently reviewed and a forest of red tape and conditions eradicated.

Crucially, the Coalition did not spontaneously combust, but the temperature at which the talks took place was hardly conducive to stability.

AIB repayment is rare good news from a bank

What goes around comes around, but sometimes it seems to take a very long time.

Yesterday, the first repayment since the financial collapse on the €21bn borrowed by AIB from the Irish taxpayer was made. Finance Minister Michael Noonan has said the money will go towards reducing the national debt. "It will have a small impact on the total interest we pay on the national debt,"he said. Small or not, it marks a milestone, and something is surely better than nothing. He said he is certain the Irish taxpayer will get back the full €21bn. They say what is scarce is wonderful, and good news about a bank giving something back certainly falls into that category.

Especially in a week which saw Bank of Ireland attempt to introduce stringent limits on the amount of money people would be able to withdraw over the counter.

Thankfully, some reason seems to have taken hold, and it has pulled back somewhat from its original plans.

In any event, what seemed like a very forlorn hope a few years ago, when the Central Bank announced that it wanted to put Irish banks in a position where they can fund themselves and generate cash without having to call on citizens to cover the cost, now seems a possibility. We are all a lot wiser - and poorer - since the crash. Let's hope this marks the end of learning such harsh economic lessons, at such catastrophic cost.

Irish Independent

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