Fianna Fail will not support proposals to cap annual rent increases at 4 per cent, The Irish Times has learned.
Minister for Housing Simon Coveney has published his strategy for the private rental sector after getting Cabinet approval for the plan this morning.
It sets out proposals for immediately designating Dublin and Cork city as so-called "rent pressure zones" and imposing limitations on the level of rent increases allowable on residential properties in these zones.
The designation will apply for three years, Mr Coveney said, and would mean landlords can only increase rents by 4 per cent per year for that period.
The designation of the zones will automatically fall after three years
Fianna Fáil will hold a frontbench meeting later on Tuesday evening to discuss the strategy.
It is understood the party has a number of concerns about the measures including the decision to provide for rent certainty solely in Dublin and Cork.
Senior figures say several other parts of the country including commuter towns have seen similar increases and will have no relief.
The party has insisted it will “under no circumstances” support the decision to cap increases to 4 per cent every year for the next three years.
It is understood Fianna Fáil is concerned this will incentivise landlords to automatically hike rents substantially.
Senior sources told The Irish Times: “We have huge difficulty with the 4 per cent. It is unacceptable. That is a guaranteed increase.
“The very most it should be would be two per cent, that is the Central Bank is recommending.”
Fine Gael requires Fianna Fáil support to ensure the legislation is passed through the Houses.
Mr Coveney has said he intends to pass legislation to give effect to the proposals through the Oireachtas by the end of the week.
Responding on RTE Six One news, Mr Coveney said Fianna Fáil would have to decide what their position was and he would be talking to them later on Tuesday evening.
He said the 4 per cent figure came wide consultation and to undermine that figure would undermine the potential for increased supply in the market.
Sinn Féin’s Eoin O’Broin also has a number of concerns, insisting the Minister is allowing landlords to increase rents by 4 per cent every year for the next three years.
Mr O’Broin said: “At the core of Coveney’s strategy is a guaranteed rent increase of 12 per cent over three years. This will continue to heap pressure on struggling renters and lock low income families and single people out of the rental market.
“A family renting an average home in Dublin for €1,500 per month will pay an additional €4,500 in rent over the next three years thanks to Minister Coveney.
“In Cork City, families will be out of pocket by an extra €3,200 over the same period.
“Low and middle income families and single people simple do not have this money. They cannot afford further rent increases.
