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Alan Kelly wants to bring in measures that sound a lot like rent controls

The Labour minister wants to put the lid on prices by linking them to inflation.

Environment Minister Alan Kelly
Environment Minister Alan Kelly
Image: Brian Lawless/PA Archive

LABOUR MINISTER ALAN Kelly plans to tie rents to inflation in an attempt to put the lid on sky-rocketing housing costs.

The environment minister wants to temporarily introduce the rent control alongside other measures to stop tenants suffering amid the housing crisis.

Kelly also planned to bring in incentives for landlords who agreed to offer tenants long-term leases like those commonly available elsewhere in Europe, the Irish Independent reported today.

He previously indicated his support for a motion at the Labour party conference to freeze private-sector rents for two years, although he said he was talking about a model for “rent certainty” rather than rent control.

The plan at the time was believed to involve banning landlords from increasing rents above the consumer price index (CPI) unless they had done property upgrades that justified the rises.

Rental Source: Eamonn Farrell/Photocall Ireland

Prices up, supply down

Figures recently released by Daft.ie showed the stock of available rental properties across the country last month fell to the lowest point since at least early 2006.

Rents have gone up 8.2% over the past year, however prices in the commuter counties around Dublin rose 13.9%.

Meanwhile, the CPI has barely changed – rising only 0.2% in 2014 and 0.5% the previous year – and wages have also been stagnant since the start of the recession.

q1-2015-daft-rental-report-colour-map Source: Daft.ie

Click here for a larger version

More houses, less control

While the current proposal is expected to go before cabinet within weeks, many in the property industry have already panned rent controls as being the wrong way to limit fast-rising prices.

Karl Deeter from Irish Mortgage Brokers today told Newstalk Breakfast the “solution was more houses, not rent control”.

If we were to link inflation to rents … had we done that before the boom, rents would actually be higher now,” he said. ”In a way, you’re guaranteeing upward-only rent control.”

Property Source: Mark Stedman/Photocall Ireland

The Irish Property Owners’ Association, the lobby group representing landlords, has also said the problem of rising rents came from a fundamental shortage in housing supply.

But left-wing groups like the union-backed Right2Water have been campaigning for the introduction of widespread measures to cap rents.

The group’s recently-released policy statement called for the introduction of short-term rent controls backed up with “income-related rental accommodation” for low- and middle-income earners in the long term.

Note: Journal Media Ltd has shareholders in common with Daft.ie publisher Distilled Media Group.

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About the author:

Peter Bodkin  / Editor, Fora

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