Effective and enforceable responses needed to rapidly rising rents

The problems caused by rapidly rising rents are well documented through endless stories of personal hardship.

Effective and enforceable responses needed to rapidly rising rents

But what of the problems that are causing rents to soar far above inflation and anything resembling fairness or sustainability? Are they problems at all, or are they natural, predictable trends and shifts that only become problems because we fail to anticipate, or appropriately react, to them?

One of the biggest influences on the demand for rental properties is population. Despite the recession, the slowdown in immigration and increase in emigration did little to stop the population growing by more than half a million between 2006 and 2016 — 522,017 to be exact.

To put that in context, the spare change in that figure — the 22,017 — equates to a large Irish town so that’s an awful lot of extra people needing roofs overhead.

Where there’s a need, there’s a demand and where there’s a demand that isn’t met by supply, a market unfettered by price controls — or at least properly enforced controls — is going to react with euro signs in its eyes.

The situation is complicated by the serious imbalance in growth, with most concentrated in Dublin and surrounding areas so the demand and prices rise disproportionately in certain areas.

Another twist in the population tale is the reduction in household size. While 20 years ago, the average dwelling had 3.15 people living in it, that fell to 2.73 people in 2011 so even if population size had remained the same, it would have taken more homes to cater for the numbers.

The make-up of the population adds its own pressures. In 15 years the number of students in full-time third-level education has grown by a third to almost 180,000.

Many will have to move out of home to attend their chosen course, putting greater strain on the housing stock.

Running parallel to the population issues is the construction rollercoaster.

At the peak of the boom in 2006, we built over 90,000 new homes. That plummeted to just 14,000 in 2011 and 8,000 in 2013. There were signs of a turnaround last year, with possibly as many as 15,000 new homes built.

The Housing Agency warns that a minimum of 81,000 is needed by 2020 and future demand is unlikely to dip below 25,000 a year.

Reliance on private developers alone to meet those targets has proven ineffective but the provision of social housing requires public funding, which forces it into a bear pit along with every other state service needing money.

Observers have pointed out that we’re not as short of homes as we think — it’s just that 10% are vacant at any give time, twice the European average vacancy rate. Owners may be in long-term care, have emigrated, died without a will, or been unable to afford repairs to bring a dwelling up to standard. But whatever the reason they are idle, they represent a lost opportunity to make a small dent in the housing shortage.

Other factors that eat into the potential housing stock are the Airbnb phenomenon, the outlawing of bedsits, and the restrictions that render much of the older “above shop” accommodation unusable.

We’re not exactly lacking in explanations for the demand-supply mismatch in housing and the soaring rents that have resulted. What we are lacking is effective, intelligent, enforceable responses.

That will cause hardship around the Cabinet table. Welcome to the renter’s world.

More in this section

The Business Hub

Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited