Tech workers may struggle to afford homes in San Francisco, but in Dublin they often can’t even find a room to rent. Although the Irish capital is actively and successfully attracting skilled migrants, it is also criticised for failing to offer them adequate accommodation.
The city’s ongoing housing crisis was front of mind at EG’s Dublin Question Time, held at Smock Alley Theatre, where panelists argued the city needed a more coordinated dialogue to overcome societal and political issues to build the right homes at scale.
While housing supply increased fairly sharply last year to between 18,000 and 18,500 units, up from 14,500 in 2017, it is still lagging underlying demand, according to a report earlier this year from Allied Irish Bank. The report suggested the city requires an annual rate of approximately 35,000 units.
Ireland’s hunger for homes comes amid a growing economy, sharp population growth and rising status as a low corporate tax haven with a foothold in the European Union. There has been net immigration into the country for the fifth year in a row. Between April 2018 and April 2019, around 88,600 people moved to Ireland while 54,900 left.
Housing crash legacy
Meanwhile, the country has only relatively recently started building at scale, given how hard the financial crash hit. Ireland is playing catch-up after a monumental housing crash in 2008. Property prices collapsed, construction ground to a halt and the state was left carrying the can for €440bn (£392bn) that the banks owed.
Investors have taken note of the market dynamic and the money is starting to roll in. As Patrick Phelan, Ballymore’s corporate finance director, commented: “Since 2014, Dublin has transformed. Pension funds from Korea and other international players want to invest here.”
But the housing model is coming under strain. Across all areas, whether private ownership, private rental or social and affordable, there is a shortage of housing, argued Arlene van Bosch, development director at U+I.
“We need a mix of product. It can take us around three to four years to bring forward build to rent and up to 10 to deliver on build to sell. Dublin is also in danger of the San Fran effect with local people getting priced out and the city losing its local identity,” she said.
It is not just the locals who may be struggling with high rents. Tech workers are allegedly posting flyers through property owners’ doors.
The missing piece is housing for families. We are dealing with technology workers, students and tourists. But what about the people who serve coffees and drive buses? People who need longer term stable housing are being squeezed out
– Orla Hegarty, University College Dublin
One real estate fund manager told EG he was thinking of housing a couple of Amazon workers in his newly renovated central Dublin Georgian townhouse.
However, others suggested the focus is still primarily on serving migrant worker needs at the expense of local people.
Orla Hegarty, architect and assistant professor at University College Dublin, said: “The missing piece is housing for families. We are dealing with technology workers, students and tourists. But what about the people who serve coffees and drive buses? People who need longer term stable housing are being squeezed out. The idea we just need two-beds is unrealistic and focused on a more transient community.”
Savills Ireland chairman, Roland O’Connell, argued that size was less important than the safety of a neighbourhood.
“Bigger units are not the solution,” he said. “People want safe streets and good schools. It doesn’t matter if they are two or four bedrooms. In fact, bigger flats can be a harder sell.”
Restrictive building regulations
Meanwhile, Greystar senior director, James Pargeter, suggested relaxing building height control might help.
“Dublin is not a high-rise city. It is low to mid rise. It is about looking at whether a change is required here and getting people comfortable,” he said.
Savills’ O’Connell agreed that more leeway on height would be useful.
He said: “I am not a fan of high rise per se; I wouldn’t want that for Dublin, but I think there are certain areas where higher buildings would be appropriate.”
While there were areas of discord, the panellists all agreed that real change had to come from the political level.
Across the world, lawmakers have attempted to intervene to ease their respective housing shortages. This month California introduced a state-wide rent cap covering millions of tenants to address an affordable-housing crunch. The bill limits annual rent increases to 5% after inflation.
Meanwhile, this summer Berlin’s government agreed to freeze rents in the German capital for five years from 2020 in its latest attempt to halt runaway gentrification.
Ireland brought in a 4% rent cap in 2016 in designated rent pressure zones which will remain in place until December 2021. But critics say these efforts are not far reaching enough.
Cross-party consensus needed
Savills’ O’Connell suggested the dialogue needs to come from a bigger, cross-party group.
“Housing is a hot topic and many people are chirping in with different views which can be counterproductive,” he said. “We need to have a longer debate about what we want in the future. We need to take the discussion away from being a hot political argument. We need a longer term cross-party view.”
However, there are signs of progress, particularly with the launch this year of Irish Institutional Property, a new organisation that aims to connect the private sector with the public sector to deliver more housing and commercial property.
IIP, founded in May and led by the former head of group communications at Bank of Ireland, Pat Farrell, will represent Dublin-listed property and construction businesses, including Cairn Homes, three Irish REITs: Green, Ires and Hibernia, as well as Hammerson and Hines.
Margaret Sweeney, chief executive of Ires and chairwoman of IIP, said: “Property has a strong societal impact and there is a lot of politics around regulations and getting the right balance. We got together to find a better way of engaging with stakeholders and the government on policy issues.”
While the housing crisis is clearly concerning, recent moves to coordinate a more constructive dialogue around the issue are reassuring in these very uncertain political times.
Photographs by Noel Hillis
Patrick Phelan, corporate finance director, Ballymore
Orla Hegarty, architect and assistant professor at the school of architecture, planning and environmental policy, University College Dublin, University College Dublin
Roland O’Connell, chairman, Savills Ireland
James Pargeter, senior director, Greystar
Arlene van Bosch, development director, U+I
Chaired by: Damian Wild, editor in chief, EG