Alan Kelly's rent control plan backed by economic group

As Minister for the Environment Alan Kelly continues to battle for rent certainty measures, an unpublished report backs his stance on the issue.

The National Economic and Social Council (NESC) argues in a paper seen by The Irish Times that projections by consultants DKM were "surprising" and did "not provide general evidence against the use of some type of rent control".

With Minister for Finance Michael Noonan and Mr Kelly still at odds, the Cabinet sub-committee on housing meets on Monday, although an imminent agreement is unlikely.

Committee members, including Taoiseach Enda Kenny and Tánaiste Joan Burton, are expected to attend, as well as Mr Noonan and Mr Kenny, and talks will continue with a view to presenting proposals at next week's Cabinet meeting.

Volatility

A source involved in the negotiations said the

Department of Finance

believed rising rents would help solve the supply issue, attracting new landlords into the sector.

The Department of the Environment argued continued volatility in the sector was deterring new investors while also causing increasing numbers of families to become homeless.

A Labour source in Government said Mr Kelly's plan to see rents linked to the Consumer Price Index (CPI) were unlikely to feature in the final deal. Other measures to provide greater certainty for tenants will be outlined, however.

A Government source conceded the stand-off between Mr Noonan and Mr Kelly was affecting voters’ perception of the Coalition as the spring general election approached.

Meanwhile, the source insisted the need to increase housing supply would be prioritised.

“There’s a distinct level of urgency around Government in identifying a package that deals with housing and rental issues,” he said.

“They can first and foremost only be addressed by increasing supply.”

Conclusions

The NESC paper says the DKM report, published in October 2104, makes projections that are “very unusual” and comes to conclusions that “arose from a distinctive interpretation of certain methods of rent control”.

The DKM report, Rent Stability in the Private Rented Sector, has dominated the thinking of those in Government against rent certainty.

It concluded rent certainty, or regulation, if it had been in place since 2000, would have led to higher rents by the end of last year than were in fact in place, and would lead a mass exit from the sector by private landlords.

NESC argues well-designed rent-certainty models create a stable market, with security for tenants, a high demand for renting and predictable income for landlords.

The NESC advises the Coalition on policy.