Dublin’s Lord Mayor Alison Gilliland has called for curbs on build-to-rent (BTR) developments to tackle the Irish capital’s chronic housing crisis.
The draft Dublin City Development Plan 2022-2028 aims to ensure that 40 percent of all units in new housing developments will be available for sale, as opposed to 100 percent build-to-rent developments which are keeping potential home buyers out of the market.
New rules will also restrict planning permission for large-scale developments that are not within 500 metres of a high employment area or key public transport interchanges.
Speaking to capitaltribunenews.com, Gilliland said: “At the moment Ireland, like a lot of other countries, has a massive housing crisis.
“There are a lot of units for rent, but at very high prices – to the extent that we have a lot of units vacant.”
“We have a rent increase regulation [in Dublin] where you can increase rents by four percent annually, so if the people who own those drop the rents they’ll only ever be able to go up by four percent incrementally.”
Large international investment funds and Real Estate Investment Trusts (REITs) have expanded their presence in Dublin in recent years, with many choosing to leave apartments in prime areas empty rather than rent at a lower price.
Last year a study by UK insurance group CIA Landlord ranked Dublin as the sixth most expensive city in the world for renters, surpassing the likes of Luxembourg, Amsterdam, Stockholm and Copenhagen.
Squeezed out
The city’s position as a tech hub for large multinationals like Google, Facebook, Linkedin and Amazon has attracted high-salaried workers who can afford high rents.
But workers on average incomes are increasingly being priced out of the market, which has a distinct shortage of affordable homes.
“Some of those rents are €3,500 (US$4,000) for a two-bed penthouse down in our Docklands district. We have these very high rent properties but very little available at the medium level where most middle-income earners are,” Gilliland added. “These are the people who don’t qualify for housing assistance payments and are very much being squeezed out and finding themselves struggling.”
Build-to-rent applications are dominating planning applications across the city, the mayor said, commenting: “What we have seen in Dublin is the proliferation of build-to-rent, generally because of the assumption from the construction sector that they’re more financially viable and profitable to build and manage and there’s a long term a gain from them through the continuous rent.”
Ticking time bomb
Looking longer term, Gilliland fears that the impact of the crisis has the potential to fuel new problems which may not be visible until it’s too late.
She commented: “My big fear is that if we continue with BTR, we are encouraging a ticking time bomb with senior homelessness. Because even if you can afford those [high] rents when you’re working, what happens when you retire and your income falls off a cliff and the rent is still at the same level?
“Yes you might qualify for housing assistance payments, but there’s no guarantee that this will actually meet the rent level that you’re at because again, there’s caps on that.”
The Draft Development Plan is open to submissions from the public until 14 February.
Image: Conor McCabe/Lord Mayor’s Office
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