The problems keep coming and the solutions are short. How long before the ongoing rental crisis in the capital is addressed properly?
The latest controversy is over a request for even more money from tenants before they rent a place. Irish Residential Properties Reit (Ires Reit) is now asking potential tenants for two-months’ rent as a deposit. With an average rent of €1,500 a month across their 2,400 apartments in Dublin, that means a tenant may have to pay €4,500 up front - a €3,000 deposit and €1,500 for the first month’s rent.
Who has that kind of money when they’re trying to rent a place? The excuse landlords are giving for such leaps is that the traditional one-month deposit isn’t enough to cover potential damages. That’s an interesting revelation, because it means that, all along, landlords have kept quiet about the one-month deposit not being enough.
And now, just as the supply of Dublin apartments is at its lowest, and demand at its highest, they will not be silent on this issue that they kept to themselves for so long. Now, they have the courage and confidence to speak up, be brave, and demand a two-month deposit from prospective tenants. Fair play lads, I don’t know how you were mute for so long.
Dublin is a city that is eager to listen to the needs of visitors, not residents
Meanwhile, the type of money Ires Reit is actually talking about when it comes to renting some of their properties is phenomenal. The €1,500 average rent hides much bigger prices.
Ires Reit recently finished the construction of 68 apartments in Sandyford, Dublin 18, for which they charged a record rent for the area - €2,570 a month for a two-bed apartment. All 68 apartments have been leased.
Landlords will say that, in other countries in Europe, asking for two- or even three-months' rent as a deposit is common practice. Maybe so, but in other countries in Europe leases are longer, tenants have more rights, the deposit is placed in an account that can't be touched and it can't be withheld without good reason, and rent is cheaper than the exorbitant costs in Ireland, particularly Dublin, right now.
The new Minister for Housing, Eoghan Murphy, has admitted that the pie in the sky deadlines for Rebuilding Ireland won't be met. The 25,000 social and private homes that are required annually just aren't materialising.
Some €39 million was spent last year on accommodating homeless Dublin families in hotels and B&Bs. Another €9.9 million was spent on other private emergency accommodation, meaning it’s now costing almost €50 million a year to house homeless families in the city.
Can you imagine if that €50 million went on building actual social housing? During his time as minister for housing, Simon Coveney promised the use of hotels and B&Bs to house homeless families would end by July 1st of this year, a deadline that now seems laughable.
Hotel building
All across the city, hotels are being built - the one type of building that seems to fly up when it needs to. On key city centre sites, it's accommodation for tourists that's prioritised. There's an extension to the Radisson Blu on Golden Lane, another extension to the Gresham on O'Connell Street, and at least two 200-bedroom hotels on the way in the Newmarket Square area. There's a Clayton Hotel being built on Charlemont Street, a Maldron on Kevin Street, another hotel on Bow Lane, a boutique hotel in Ranelagh, and more.
It is estimated that the new hotel “stock” will create 1,500 new hotel rooms by the end of 2018, and 2,000 new rooms by the end of 2019. Dublin has a shortage of hotels, for sure, but one can’t help but feel that this is a city that is eager to listen to the needs of visitors, not residents.
Every intervention that has tried to address the crisis has failed
I felt hopeful about the advent of purpose-built student accommodation in the city centre. But the results mean that the only students who will be provided for are the very privileged ones. Aparto’s development on Dorset Street, with 447 beds, starts its rent at €940 a month.
Another high-end student development is Uninest in Phibsboro, which has 101 beds, and there’s also aparto’s Binary Hub on Bonham Street, and New Mill in the Liberties (with beds priced at €996 - €1,380 a month).
While building student accommodation is vital, most students will be priced out at that level. How many students do you know could hand over a grand a month in rent? How much money would they need to be earning in their part-time job, or how wealthy would their parents need to be, to afford that? This isn’t normal.
Demanding a two-month deposit should not be allowed without a long lease being offered. We need proper rent control that prevents landlords from raising the rent immediately. Landlords should not be allowed jack up the rent (in some cases by 100 per cent) between tenants.
Local authorities and the State need to be at the heart of providing social housing, not outsourcing every aspect of it to private construction industry, which clearly hasn’t been mobilised effectively to provide social housing. The solution to a lack of supply is the State building houses.
Every intervention that has been made has failed. From the Central Bank’s new mortgage-lending rules to the so-called two-year rent freeze - everything has resulted in house prices rising and rent rising.
This is because the crisis has effectively been poked with a stick instead of being properly taken in hand. Unless we tackle several things at once, it will continue.