More than 30,000 new one- and two-bedroom rental properties will be needed in Dublin by 2022 to sustain new jobs in multinational companies and growth in inward investment, a new report says.
The American Chamber of Commerce Ireland, which represents US multinationals and some of the biggest employers in the country, said in its report that 232,500 new housing units will be required nationally over the next five years, including 81,500 in the greater Dublin area.
Of these, 82,500 will be required in the rental sector, including 32,500 in and around Dublin.
Demand for new dwellings is estimated to be “at least 40,000 and closer to 50,000 per year,” according to the report on the housing shortage and its impact on foreign direct investment (FDI).
The chamber said that expanding and newly arrived companies are finding it particularly hard to house staff because of a shortage in city-centre apartments.
It cites housing as one of the most critical “pressure points” when looking to recruit to expand their Irish operations.
Rental shortages are so severe that companies have started to rent short-term accommodation for staff looking for urban locations before they have even been hired as part of a “hedging strategy”.
The companies are managing the challenges but are “reaching a tipping point,” the report says.
Recruiters for multinationals have reported demand for accommodation close to their workplaces for young and single staff but a shortage of suitable one- and two-bedroom apartments has left foreign employees “surprised” at having to share three- and four-bedroom suburban semi-detached houses.
Just 14 per cent of people live in apartments in Dublin and Cork, which is very low compared to other cities with similar sized populations, the report finds. Almost half of Liverpool’s housing is apartments, while two-thirds of Copenhagen’s and more than three quarters of Lisbon’s homes are apartments.
The chamber estimates that housing accounts for 25 per cent of the competitiveness of Ireland’s cities as a location for doing business compared with other cities in the world. It based this calculation on labour costs accounting for 75 per cent of foreign direct investment (FDI) service operation in Ireland and workers spending 33 per cent of their disposable income on accommodation.
Mark Redmond, chief executive of the influential chamber, said that the Government needs to keep "a laser-like focus" on the housing sector.
“The challenge posed by rented residential costs and scarcity of supply and potential knock-on effect on wage inflation will need to be addressed,” he said.
The chamber has called for a independent audit of construction costs to compare them internationally and a report on the impact of the increased cost of regulation.
It wants a database on property ownership and residency to make better use of existing housing and a land value tax on all commercial and publicly owned land to increase the supply of development land and to lower its cost.
Changes are also being sought to ease height restrictions in cities to increase housing supply, improve density and provide better access to amenities, schools and broadband connectivity.