An inter-departmental steering group has been set up to examine proposals aimed at tackling the student accommodation crisis, including a possible new tax relief for developers.
The move was announced by Minister for Education and Skills Jan O'Sullivan following her publication on Wednesday of a report commissioned by the Higher Education Authority (HEA) into the scale of the housing shortage.
Ms O’Sullivan has also announced a grant of €30,000 to the Union of Students’ in Ireland to help it develop its homes.usi.ie website, aimed at promoting the rent-a-room scheme.
The scheme was “a win-win situation, as students get accommodation and homeowners can earn up to €12,000 a year tax-free doing this,” the Minister remarked.
The HEA 'Report on Student Accommodation: Demand and Supply' says third-level institutions plan to invest €1.2 billion in developing bed spaces over the period to 2024.
However, this will still leave the sector with a shortage of over 25,000 beds due to the expected growth in the student population in that period.
The report, finalised by the HEA in conjunction with officials from the Department of Education, omits a number of more radical proposals that were considered at drafting stage.
These included a proposal by University College Cork president Dr Michael Murphy for a zero Vat rate on the construction of student accommodation. The report does recommend that "consideration to be given to tax measures to develop on-campus accommodation" for higher education institutions (HEIs).
Other recommendations include:
* Further promotion of the rent-a-room scheme by homeowners in areas adjacent to higher education institutions;
* Consider the provision of a capital grant specifically for HEI’s development of student accommodation for a fixed period of time;
* Consult with Nama, on a commercial basis, regarding the availability of suitable properties and land;
* Local Authorities should consider the use of the Vacant Land Levy, provided for in the Urban Regeneration and Housing Bill 2015 to increase the supply of land that could be used for student accommodation;
* Explore potential for joint initiatives involving HEIs and an approved housing agency to deliver bed places;
* Consider the potential to deliver projects through a PPP financing model;
* Continued engagement between HEIs and the Ireland Strategic Investment Fund, which “sees student accommodation as an area of investment consistent with its dual bottom line mandate of commercial investment with economic impact”;
* HEIs should consider allocating up to 10 per cent of new bed spaces for students with disabilities to allow for likely increased demand by these students;
* Further research should be done on student experiences in accommodation to inform policy.
As reported by The Irish Times last July, the report estimates that 57,104 students sought accommodation in 2014 and this is expected to rise to 68,679 by 2024.
In the same period, the number of student-designated bed spaces, provided either on campus or via private accommodation, is set to rise from 31,296 to 43,496, leaving “unmet demand“ of at least 25,000 bed spaces each year.
This is depicted as a best-case scenario as it assumes various third-level student accommodation projects which have been announced - but for which funding has not yet been secured - are completed on time.
Ms O’Sullivan said the inter-departmental steering group will provide a coordinating mechanism to ensure that the higher education institutions have access to information “on new potential funding and delivery”.
It is also expected to inform policy decisions in the October Budget amid pressure from other Ministers to introduce measures to boost the housing stock.
“In the longer term, the Government is committed to addressing the housing shortage through the Construction 2020 strategy,” Ms O’Sullivan said. “This will not resolve all of our problems immediately, but I am confident that the implementation of Construction 2020 will provide us with a sustainable housing stock in the medium to longer term.”
The report says discussions with HEIs and other stakeholders suggest that the shortages of available accommodation are “high” in Dublin, Cork and Galway and to a lesser extent Limerick. “Accommodation in other areas, along with private rented accommodation, is generally adequate to meet demand.”
It also says a quality issue needs to be considered, noting: “The standard and suitability of some private student accommodation, particularly where [the now abolished] section 50 tax breaks have been utilised and capital allowances have been fully claimed, is questionable but has not been fully examined as part of this exercise.“
The report estimates that it costs approximately €85,000 to create each bed space, and while HEIs have difficulties accessing land and finance student accommodation can become a significant income stream in the long run.
The level of income generated by the university sector from this source is due to increase from €51 million in 2014 to just under €120 million in 2024. The costs of maintaining the increased number of bed spaces will double over the period from an estimated €30 million in 2014 to just over €63 million.
Providing campus accommodation "is a prerequisite for attracting new overseas students", the report says. Some universities, including UCD, have already begun prioritising overseas students in their housing policies.
The report cites “a risk in developing substantial new student accommodation which may result in low occupancy rates during the summer,” albeit some universities have generated a healthy market in summer rentals.
