Dublin City Council aims to curb build-to-rent construction

Lord Mayor Alison Gilliland believes that exclusively rental complexes will not lead to a sustainable, high-quality housing offer for the city residents

Yesterday, the Dublin City Council announced a plan to add restrictions to build-to-rent apartments, such as private student housing, in the city’s new development plan for 2022-2028. With the housing crisis being on the top of the agenda, the City Council’s development plan calls for the construction of 40,000 new housing units in the next six years.

Build-to-rent complexes, on the other hand, are somewhat antithetical to the goal of local authorities, namely, providing stable and long-term housing options for the citizens. At the same time, rental accommodation in the Irish capital is famously scarce, so officials are trying to limit their development to certain inner-city districts, like the Liberties or Ballymun.

Targeted development of mixed-use buildings

According to a report by the RTÉ, the national broadcasting agency, the build-to-rent complexes will be reserved to areas within 500 metres of a high concentration of employment opportunities or transport hubs like major train stations.

Furthermore, they will also be allowed in 17 Strategic Development Regeneration Zones like Finglas, Cherry Orchard, Clongriffin etc.

They will also need to have a healthy mix of one-, two- and three-bedroom apartments. Buildings would need to boast at least 100 units with 40% of them being built to sell. one-bedroom units will be limited to 50% of the total and studios would make up a maximum of 25% of any such scheme.

Lord Mayor Alison Gilliland explained that the practice of constructing large buildings that only rent out apartments will not lead to a high standard of sustainable housing offers in the city. Instead, she believes that a larger variety in apartment type and purpose would lead to better amenities, that can address the needs of those seeking housing in the city.

Inflation in the construction sector is making two-bedroom apartments less attractive for developers

On the other hand, according to the Society of Chartered Surveyors Ireland (SCSI) in a report from October 2021, the national inflation rate in Ireland is 8.3%, almost double to pre-Covid levels. Furthermore, the inflation rate in the construction sector is at 7%.

The report also states: “The last time we saw comparable rates of tender inflation was in 2000, at the height of the Celtic Tiger……however we believe the current situation is fundamentally different”.

This is important because the Director of the Twinlite development company, Rick Larkin, an opponent of Dublin City Council’s proposition has stated that construction costs on a two-bedroom unit sit at around 400,000 euros. The hefty price tag for developers and the new regulations could put a strain on the sector and lead to a further increase in purchase prices for real estate in Dublin.

The high price in construction, though, according to the SCSI is due to supply chain shortages, meaning that prices of raw materials could fall in the future.