Wednesday 21 August 2019

Coveney: Rent caps are not up for negotiation

4pc rent hike cap planned for properties in Dublin and Cork is not up for negotiation

Leo Varadkar Photo: Damien Eagers
Leo Varadkar Photo: Damien Eagers

Cormac McQuinn, Michael Cogleyand Kevin Doyle

Housing Minister Simon Coveney has said that the 4pc rent hike cap he wants imposed on properties in Dublin and Cork is not up for negotiation.

Fianna Fáil has said it's not satisfied with that figure and want a lower percentage, but Mr Coveney warned that the government won't support an amendment to its legislation that would set the cap as low as 2pc.

Put to him on RTÉ Radio that this could mean the government would face defeat on its plan to tackle the crisis in the rental sector, Mr Coveney replied: "Then I don't think the legislation will be going through before Christmas."

He added: "And if Fianna Fáil want to take that on themselves well then so be it."

He said that "there are things we can do in relation to some of the Fianna Fáil queries" but argued that there are "an extraordinary number of issues across the broader rental market" in the strategy that the rival party had sought.

Mr Coveney said he's not willing to negotiate the 4pc figure because "it has already been negotiated".

"That's why we've been through a long consultation process with all the stakeholders."

He said he never sought the limit to be linked to the consumer price index.

"I have always looked for a figure of around 4pc because it's the right thing to do."

He said 4pc is a "very modest margin" above an inflation rate of around 2pc.

Mr Coveney said; "My job is to make sure that we have a growing expanding private rental market. If we don't have an appetite for new buildings to come into the rental market, for vacant properties that are currently there to come into the rental market.

"If we don't increase the number of properties that are available for rent in, well then we're going to continue to have pressure building and building and building which is driving up prices.

He said that only considering the plight of tenants would have been "populist" because without landlords "you don't have a functioning market".

Mr Coveney said his plan allows modest rent increases "where appropriate" while benefiting tenants by putting a stop to "price gouging".

Earlier this morning, social protection minister Leo Varadkar said Housing Minister Simon Coveney has the full support of his Government after introducing a controversial plan to implement rent caps in areas within the country’s main cities,as said.

Varadkar was speaking to the Dublin Chamber of Commerce where he praised the "sterling and pioneering" work being done by Mr Coveney.

"It's going to take time but good progress is being made and he has the full support of Government in doing what he is trying to do," the minister told a room of 200 business leaders.

Varadkar insisted Coveney had full support after reports in the Irish Independent he told ministers he had been annoyed by the lack of consultation for the plan.

Mr Varadkar spoke on a number of issues including increasing the population between Grand and Royal canal in Dublin City.

He told of a need to build both higher and denser in the city centre.

Minister Coveney's new proposal will involve the introduction of "rent pressure zones" in both Dublin and Cork that will cap rent increases to 4pc per year.

The proposal with opposition from Fianna Fáil, which threatened to block the introduction of the zones.

Rent caps

Varadkar speaks as a new rent cap will be extended to all of the cities across the country and the commuter belt around Dublin.

And the measure allowing landlords to push up rents by up to 4pc a year is to be watered down.

Housing Minister Simon Coveney's new rent plan came under immediate attack. Ministerial colleagues complained about a lack of consultation and Fianna Fáil threatened to block the introduction of 'Rent Pressure Zones' in Dublin and Cork.

The key element of his plan to tackle the crisis is based on preventing landlords hiking rents by more than 4pc annually for the next three years.

Fianna Fáil wants Dublin, Cork, Limerick, Galway and Waterford covered by the rent cap, along with the commuter belt around the capital.

The party is not happy with the 4pc increase and wants tax incentives for landlords to be part of the package.

Concessions in these areas will be the price of FF support. But Mr Coveney has already said he would not make "fundamental" changes to the plan.

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