What is the best way to guarantee the availability of affordable student housing?
Ireland has a problem. Our accommodation market is in a mess. We don’t have enough housing for returning emigrants, immigrants and students. Students are desperate for accommodation; however, the supply is simply not there. Students have to secure accommodation months before they are even accepted onto their course in order to guarantee that they have some place to stay during term time and avoid the dreaded commute. The apartments and houses that they do get are incredibly overpriced and seem more suited to international and wealthy students. The best way to solve this is to increase supply. This is not so simple. Because entirely communist states or entirely capitalist states never truly succeed, we need a balance between the public and private sectors along with proper guidelines to solve this problem. The government needs to get involved. We need high density housing and we still need the private sector.
Firstly, the government needs to fund and build a significant number of affordable housing units. Government input is desperately needed. It seems clear that the private sector cannot satisfy the ever-growing demand for student accommodation. They need to fill in the gaps left by the private market and according to journalist Éilis Ryan, "Affordable student housing is essential and could be a solid investment for the government" (Ryan, 2017). The government, particularly local authorities, need to become a key player in the market. According to the RTÉ.ie article, "Local authorities using 'fraction' of land to build social housing" (RTÉ, 2017), "local authorities have built only 430 properties" in 2016, despite owning "almost 1,200 hectares of land”. This type of inaction needs to change if we are to solve the problem of student housing affordability. They can and should build student accommodation where they can, particularly near colleges, ITs and universities. However, the Fiscal Advisory Council, the government’s budget watchdog, warns that rapidly increasing house building to meet the demand for homes could “overheat” the economy “by bidding up wages and eroding competitiveness, much the same as what happened in the years prior to the crash” (Cantillon, 2017). This means that we have to exercise caution and avoid drastic changes, the effects for which would be very difficult to model.
Secondly, to support the government, we need to encourage the construction of high-density apartments in order to alleviate the pressure on the overall housing market and reduce overall prices. High density apartments are a cost-efficient method of increasing supply so will be affordable to rent and decrease overall prices across the country. We can't continue to have low or even medium-density complexes scattered throughout our cities. According to the Irish Times article “Builders ‘can’t make viable profit’ on €320,000 apartments”, “Six-storey buildings are the optimal solution for high-density apartments, and anything more adds “substantial structure, fire preliminaries and finance costs. There should also be a “higher ratio” of one- and two-bed apartments” (Kelly & Leahy, 2017). Instead of buying expensive land in our cities, we can increase the supply by using the land we already have. As well, the aforementioned ratio would greatly benefit students who represent one of the largest sectors of the one-bed apartment market. Irish cities shouldn’t be afraid of high rise buildings. High rises are the standard in most international cities from Tokyo to the more modest Amsterdam. Also, high density cities have a much more sophisticated system of public transportation which is nearly always a plus.
Thirdly, we need to remain inclusive of and provide incentives for the private market. In the method documented in this essay, the private market is still supposed to supply at least a plurality of all student-housing needed. The private market is much more efficient and less likely to be affected by corruption than is the government. We should be grateful that the private market has taken an interest in purpose-built student housing. The price for students may be high, but it is fuelling a construction boom that is creating affordable housing for the richest students and international students. The private market is satisfying their demand. Hopefully, if overall supply increases, prices should soon decrease. We hear of many student accommodation developments coming from the private sector. The same cannot be said for local authorities and the government. Zigurrat Students, the UK-based developer of student accommodation, currently have submitted planning applications for the development for 734 student beds across three different sites in the north inner city. It[L1] already owns a block of student accommodation in the former Montrose hotel – which it rents for an astounding €13,260 per annum – over €1,000 a month, and three times the full maintenance grant (Ryan, 2017). The private-sector has the capital to provide housing, and they are much more likely to profit than an already indebted government. The government just needs to step up and not take over the market.
In conclusion, this essay examined what we need to do to ensure that supply of student accommodation increases to guarantee demand for affordable student housing. We need the government and local authorities to intervene and create more affordable accommodation for students. We need to make the creation of student accommodation more cost efficient by building high density complexes. And finally, we need to continue supporting the private sector while striking a balance with government intervention. With these ideas in mind, we can solve our student accommodation crisis and make life easier for all of our students.
Cantillon, 2017. Have We Missed Our Chance To Fix The Housing Crisis?. [Online]
Available at: https://www.irishtimes.com/business/economy/have-we-missed-our-chance-to-fix-the-housing-crisis-1.3315439
Kelly, F. & Leahy, P., 2017. Builders ‘Can’t Make Viable Profit’ on €320,000 Apartments. [Online]
Available at: https://www.irishtimes.com/news/ireland/irish-news/builders-can-t-make-viable-profit-on-320-000-apartments-1.3218822
RTÉ, 2017. Local Authorities Using 'Fraction' of Land to Build Social Housing. [Online]
Available at: https://www.rte.ie/news/ireland/2017/1121/921658-social-housing-local-authorities/
Ryan, É., 2017. 'If Ever There Was a Sign That The Boom is Back, It’s Vultures Building Student Homes on Summerhill'. [Online]
Available at: http://www.thejournal.ie/readme/affordable-housing-is-essential-why-are-we-handing-control-of-it-over-to-the-vultures-3213138-Jan2017/