Sunday 25 August 2019

Coveney's rent plan is flawed - but it's a start

Housing Minister Simon Coveney. Photo: Tom Burke
Housing Minister Simon Coveney. Photo: Tom Burke
Editorial

Editorial

This is the season when children take part in nativity plays and we celebrate kind-hearted inn-keepers and cosy mangers where a child can be brought into the world, in the certainty of security and shelter. The latest figures on homelessness in Dublin are a challenge to our spirit of goodwill.

There were 5,146 adults and children in emergency accommodation last month, a 35pc increase in the year.

So we need to be doing much better. Yesterday, Housing Minister Simon Coveney attempted to do just that with a series of measures to ease upward pressure on rents. Some weeks back, Mr Coveney set himself an ambitious task of having no family in a hotel room through homelessness by the middle of next year.

The thrust of his idea was to declare Dublin and Cork cities so-called "rent pressure zones", with curbs on the level of rent increases allowable in these zones.

Landlords can increase rents only by 4pc per year for that period. But as pointed out by former housing minister Alan Kelly, this clears the way for a 4pc rise over three years in Dublin and Cork - which is well above both the rate of inflation and the consumer price index.

Already, Fianna Fáil is less than enthusiastic in its response to the package. Last night, Labour leader Brendan Howlin asked how the Government could justify allowing a rent increase that was "a multiple of any other index, eight times the consumer price index".

Mr Coveney argues he is striving for a balance that is sensible and proportionate. But without significant changes in addressing the huge shortage in housing, it will be impossible to achieve balance as there is a massive deficit on the supply side. To be fair, Mr Coveney's plans explore supply initiatives such as 'Build to Rent' developments, and the fast-tracking of 'Repair and Leasing' schemes to bring unused capacity back to the market.

Sadly, our housing crisis won't be solved overnight, but Mr Coveney had to start somewhere.

Making work pay must remain an imperative

The poorest households did best out of Budget 2017, new research from the country’s leading economic think-tank says.

The Government, at least, can’t be accused of ignoring the poor and can claim to have delivered a progressive Budget.

The benefits cited by the ‘ESRI’s Distributional Impact of Tax and Welfare Policies: Budget 2017’ report include rent control measures and the scrapping of water charges.

The report shows the overall impact of the Budget was relatively small, but the highest gains went to those in the bottom 10pc of households.

Most families gained something from the Budget, but unemployed people did best with gains of up to 2pc of income.

However, the data does show households where one or more people are in work favoured less well in the Budget. The finding supports the claim the working poor and the squeezed middle were forgotten about in the Budget.

In the previous government, Fine Gael claimed one of its core principles was to ‘make work pay’. The elimination of poverty traps by making sure a low-income worker was better off in employment than on the dole was a prerogative.

This objective cannot be abandoned due to a political imperative to not offend anyone, as evidenced by last October’s Budget. The rising tide must lift all boats in the economy and show there is always an incentive to work.

Irish Independent

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