The Dublin housing crisis is highly complex. That’s for sure. The phrase housing crisis gets thrown around in many European capitals but each city has their own problems. In Dublin, it’s a combination of several issues affecting many people in different ways. We’ll explain some of the most important effects, causes, potential solutions as well as how it affects people.
What are the effects?
- Rising rent: The current average rent in Ireland is €1,403 per month. In Dublin, the average is €2044. Rents have doubled since 2010.
- Increased homelessness: Around 10 000 people are homeless. That’s the size of a small town like Skerries or Rush. 4000 of these people are children
- Difficulty in Getting Mortgages: The average deposit for a mortgage stands at €87k. In comparison, Dublin City has an average annual income of 39,999€ per person per year.
- Short-lets: Thanks to Dublin’s popularity with tourists and language students, landlords can make even higher profits from short lets than if someone rented the property as a regular tenant. You’ll often see most people mention AirBnB in connection to this issue but there are also other websites and agencies.
What are the causes?
- Lack of houses: Due to the increase in population thanks to reasons like many global companies basing their EMEA headquarters here and more people moving from the countryside into the city, there’s a lack of actual properties to live in. This lack of housing hasn’t been met by developers for years, which means it’s increasing every year. At this point, it’s estimated that 112 000 new homes will be required within the next decade.
- Lack of social housing: Just like with the above-mentioned point, not enough social housing is being built. Around 50 000 people are on waiting lists for social housing. Commonly cited reasons that not more social housing is being built are bad experiences with how social housing was planned as well as managed in the past and the difficulty for councils to obtain funding.
- Weak Tenants’ Rights: Tenants’ rights are pretty weak in comparison with other countries and it’s relatively easy to get evicted. It’s also very hard to enforce these rights, especially in a timely manner.
- Brexit: The need for housing has increased as more companies move from the UK to Ireland to stay in the EU. At the same time, the government is restricting spending in preparation for a potential a hard Brexit.
- What’s being built: Cranes are omnipresent in the Dublin skyline. From our window alone I can see five of them. So, there are buildings being built but the issue is that what’s being built is mostly offices, hotels and (luxury) student accommodation because that can make developers more money.
There are also other smaller factors which make the Dublin housing crisis more pronounced. For example, because of Dublin’s poor public transport buildings houses too far from the city centre puts them outside a reasonable commuting distance. Another issue is that due to the burst of the real estate bubble after the Celtic Tiger, many construction companies and skilled workers left the country. Ten years later now the industry doesn’t have the infrastructure and talent to build as quickly as during the boom years.
How did the Dublin housing crisis start?
You could go back to previous housing crises and issues with landlords further in the past but let’s start with the Celtic Tiger. Celtic Tiger refers to the economic boom in the mid-1990s to the late-2000s. Construction was booming so much that it represented 12% of the rapidly growing GDP. Ireland was dealing with a sudden influx in immigration rather than the more extensive emigration from before. Suddenly, Dublin had to catch up with being a growing city.
When the recession hit Dublin hard in 2008, many austerity measures were introduced. This meant the building of social housing was drastically reduced. Meanwhile construction in the private sector also slowed down significantly and, as a result, many of the skilled workers moved to other countries. That means there aren’t enough skilled workers and companies which are needed to build a house at the same rate as during the boom.
Why can rents continue to rise?
That is a complex macroeconomic issue, so I’ll just mention a few factors. Rents are still increasing because there are still enough people who can pay these rents. Understandably, people try to do what they can to have a roof over their head. So, people make big compromises. Many people live in shared houses and flats rather than having their own space to pay less rent. People with even lower budgets go so far as to share rooms. There is a black market of renting and sub-letting. There are stories of 14 people living in one house and extra beds in living rooms or kitchens to add more tenants.
Meanwhile international students often already take out big loans or are simply able to afford the new luxury student housing being built. Others, even locals, have to take on a loan that will affect their financial future because it’s the only way to be able to attend that college. Similarly, for many people working full-time, they pay the rent in order to keep the job. That means they may have to live increasingly from pay to pay check or even go into overdrafts which puts them into further financial instability. Meanwhile rents can also keep rising because there are high income earner who are able to pay them, so they won’t have to share a place. If it was like in the past, those renters would disappear from the renting market as they become homeowners. But because it is so hard to save enough for a deposit and the higher the rents go, the harder it becomes, there still are high income earners who are able to pay exceedingly high rents.
Who is affected by the Dublin housing crisis?
In a nutshell, everyone. Increasing rents mean less savings, less financial stability and taking shortcuts on healthcare as well as less spending on one’s own happiness. Down the line, it also means the chance of being able to save up enough for a deposit becomes smaller and smaller, even for people who earn well.
The people who feel the worst affects are people on lower incomes and especially those with children. It’s even worse for those on 0 hour contracts or similar employment types. There are new homes being built in the Dublin area but they are on the very high end of the price range. For people looking for affordable housing there are hardly any options. Even when it comes to rent, Dublin lacks the level of social housing stock which exists in other cities like Vienna.
People who are evicted and end up homeless can register with the council to be put on a waiting list for emergency accommodation. That means the Council pays for hotel rooms. This is, of course, a very temporary solution since hotels only have so much capacity and people need to leave again as tourists book that room. Another solution specifically, for families are “family hubs“. However, there are many concerns on the impact of those, especially on the children living there.
How does the Dublin housing crisis affect people moving to the city or county for the first time?
We’ve heard from several people that they had underestimated the high cost in renting and how quickly it keeps increasing. Sometimes employers or language schools will even downplay the issue because they need to new people to come.
We fell a little into that trap ourselves. Having lived in London, we figured we can deal with living in an expensive city. We had done it before. But London is expensive in a different way. Everything in London has been expensive for quite a while: housing, food, transport and even going to the cinema. The two key differences are that London’s expenses are relatively stable and that companies offer significantly higher salaries than in other parts of the UK.
Meanwhile in Ireland the biggest expense is rent and it’s increasing rapidly. If you live in a rent pressured zone where rent can be raised by up to 4% every year, your salary isn’t necessarily going increase at the same rate. So, the percentage of your income you pay to for rent can increase rapidly. Your rent costs can also get higher suddenly if you have to move out from your place, for example, because a family member of the landlord needs to move in or they sold the building. Then you’re stuck with finding a new place quickly and at current market value. This uncertainty and continued increases of rent are what causes many expats as well as locals anxiety. We’ve seen many expats we know leave and so do many Irish people.
What are possible solutions to the Dublin housing crisis?
Most experts say action needs to be taken by the government since they are the ones who can shape the market with new policies. These are some of the actions which are being suggested.
- More houses need to be built: This includes social housing as well as apartments and houses intended for rent rather than selling. These rents also need to be affordable.
- Caps on rent increases: Currently, rent can only be increased by max. 4% in rent pressure zones but many more areas are affected by rent increases. There are also loopholes in the system for landlords to increase the rent above that.
- Better tenants’ rights and ways to enforce them: An important example is making it harder for landlords to evict people like in other European countries. There also needs to be a process to check compliance and to enforce these rights when they are being disregarded.
- Introduction of a rent register: That way people in rent pressure zones could compare rents in their area, including what previous tenants paid since the biggest rent hikes often happen when new tenants move in.
- A cultural shift: That means changing from a system that’s designed for home ownership towards renting as well as building more tall apartment blocks than houses with gardens.
Is there any good news?
It can be hard sometimes to have faith that the Dublin housing crisis will be fixed. So, I searched the internet for some good news that can show that, even if slowly, we are moving forward.
- A new policy has been introduced prohibiting residential properties to be used for short-term lets for more than 90 days per year
- Suggested government support for families willing to move to the country, which of course will be a difficult decision if people have their families and communities in Dublin
- The Dublin City Council is negotiating with developers to increase the percentage of affordable and social housing in new developments, e.g. to 80% in O’Devaney Gardens
- Google is planning to invest to help ease the housing crisis
If you want to know more about your rights as a tenant
RTB – The RTB is also the board you can contact to solve disputes if your rights as a renter are being violated.
If you are in need of or want to support a charity trying to help people who are worried about losing their home and people who are homeless
More in-depth information on the Dublin housing crisis
I’ve linked to several articles in the blog post above
We’ve also blogged about advice for renting in Dublin