Monday 19 February 2018

Developers who reduce rents to get incentives

Alan Kelly
Alan Kelly
Niall O'Connor

Niall O'Connor

Developers are to be offered a series of sweeteners in return for offering discounted rents to their tenants.

Environment Minister Alan Kelly's proposals will see concessions offered to landlords who agree to set rent by up to 30pc below the market rate.

The carrot and stick approach is part of an array of measures aimed at introducing "rent certainty" into the marketplace.

The affordable rental scheme is designed to benefit low and middle-income earners in urban areas who do not qualify for social housing.

These households, Mr Kelly says, are struggling to meet their accommodation needs in the private rented sector.

Mr Kelly told TDs the scheme will ensure "intermediate households in the private rental market are not forced into seeking social housing support" and will also contribute towards "stimulating the construction of new residential properties".

In return for offering rents of 70-80pc of the market rate, developers will be offered a series of concessions, including:

  • a low-interest loan;
  • a grant;
  • provision of land;
  • a loan guarantee on private borrowing.

Mr Kelly revealed the plans in a lengthy housing document presented to the Labour Parliamentary Party meeting last night.

He added that the scheme will help to "promote an increased supply of rental properties which should also contribute to the economy and provide a supporting infrastructure for employment."

The Tipperary TD also confirmed plans to link rent hikes to inflation, as previously reported by the Irish Independent.

The package will be introduced as a temporary rent control measure aimed at preventing spiralling rent bills.

The package, detailed last night, will now go to the Economic Management Council (EMC) for approval.

The EMC consists of Taoiseach Enda Kenny, Tánaiste Joan Burton, Public Expenditure Minister Brendan Howlin and Finance Minister Michael Noonan. An estimated 305,000 households are currently renting in Ireland, with one-third unlikely to be able to afford a home in the future.

Mr Kelly has consistently said he will unveil a package that will give "rent certainty" to tenants. However, the move is likely to cause concern in Fine Gael, whose ministers are sceptical about introducing measures that will be dubbed as "rent controls".

But Labour Party sources insist the move is essential in ensuring young couples do not fall into so-called "rent traps".

The minister also said all actions under the Social Housing Strategy 2020 are on track.

And he said ambitious targets have been set for councils, with over €1.5bn set to be invested in building, purchasing and leasing schemes to 2017.

Separately, Labour TDs and senators last night expressed concern about welfare cuts for lone parents.

The One-Parxent Family Payment is being cut from next month to single parents whose youngest child is over seven, in a move that has been dubbed "Thatcherite" by Fianna Fáil.

Ms Burton has agreed to meet a delegation of Labour TDs and senators today to discuss the cut.

Irish Independent

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