Government plans in turmoil after Fianna Fail refuses to back 4% rent cap

Less than 48 hours after announcing their plans to control rents in “pressure zones” the governments scheme is already dead in the water.

The Dáil was due to debate the government’s new housing strategy this morning but just minutes before it was due to start TDs were told the legislation had been pulled off the Dail schedule.

With the Dáil due to close for the Christmas holidays at 10pm tonight a deal will have to be reached early today or hundreds of thousands of renters will be facing uncertainty going into the new year.

Last night Enda Kenny told Fine Gael TDs that the scheme would be withdrawn unless Fianna Fáil gave its backing to a 4% annual rent cap.

Talks between the Government and Fianna Fáil subsequently broke down last night without agreement with Minister for Housing Simon Coveney saying Fianna Fáil’s demands to cut the cap to 2% and extend it to other areas outside of Dublin and made it impossible for the Government to bring forward the legislation for debate.

This disagreement is the biggest to hit the relationship between the current government and Fianna Fáil and could have massive implications for the future of the minority government.

Throughout negotiations Mr Coveney said the 4% cap on rent increases in the rent pressure zones of Dublin and Cork city wasn’t negotiable.

The limits are being introduced in these cities because they meet two designated criteria: that annual rents have risen by at least 7% in four of the last six quarters; and that the average rent is above the national average in the past quarter.

However, it is understood the main issue in the dispute was the criteria for other areas to qualify for a rent limit to be imposed.

Fianna Fáil wants Galway, Limerick, Waterford and large population centres surrounding Dublin and Cork city also included from the outset.

The party also believes the proposal to speed up the process to assess these areas from mid-January does not go far enough.

It wants new criteria put in place but the minister believes that the proposal was fundamentally flawed

This morning, Mr Coveney said the parties have now moved beyond the issue of the 4% rent limit.

Speaking on RTÉ’s Morning Ireland, the minister said:

“What Fianna Fáil focused on last night is that they said they could live with the 4% as long as we got more areas into rent pressure zones.

“What I have said is that we are going to bring more areas in but we have to do that on an independent assessment as opposed to the basis of politics.

“I am a minister here who has to implement this legislation and to make it work for the years ahead.”