David McWilliams: Our housing problem is an apartment problem
Belfast’s skyline shows what Dublin needs to do: build upwards to keep rents down
In his wonderful 1979 book The Old Patagonian Express – by Train Through the Americas, Paul Theroux notes that you can tell a lot about the state of a country from the condition of its railway stations.
The 21st century version of railway stations are airports. Airports capture the essence of a city or country. Traffic at Dublin Airport has surged from 18 million passengers in 2010 to 30 million in 2017. It’s still one of the best leading indicators of an economy’s vibrancy. If you want to see the human face of the hectic pace of economic activity, head out to the airport just before 6am any day.
On Wednesday afternoon the queue at immigration in Dublin Airport was long; a crowded line sneaking around and back again on itself, full of all sorts – as ever. Two women in the queue got chatting to me. They were coming home to vote. One was living in Vienna and the other in Berlin. Although they would love to come home, they’d both left Ireland for lifestyle reasons. They simply couldn’t have the same lifestyle in Ireland that they could enjoy in Berlin or Vienna on their salaries.
And within minutes, crawling along in the immigration queue, we were back at the perennial Irish conversation, rent and the cost of accommodation. Here were two clever, well-educated women, probably in their late 20s, who had taken their talent elsewhere because, had they stayed home, too much of their disposable income would have gone to on rent, leaving not enough to enjoy life.
They both guffawed at the notion of saving for a home in Ireland. They would have liked to be able to afford a similar apartment to the ones they lived in currently.
And this is the nub of the urban accommodation dilemma here. Ireland doesn’t have a housing problem, it has an apartment problem. We are not just talking about Dublin: prices in Cork and Galway are also way out of whack with the rest of Europe.
An 85sq m apartment in Dublin will cost you €1,726 a month, making it the fifth most expensive city in the world after New York, Paris, London and Sydney. And things get dearer as they get smaller. For example, a studio or a small one-bed flat of about 45sq m in Dublin will set you back €1,102 per month, making Dublin even more expensive than Paris.
If you wanted to live alone – which most young people yearn to do – in a small apartment in Cork or Galway, you will be paying more than you would in Rome, Barcelona, Madrid, Berlin or Montreal.
But the real sign that something is dysfunctional here is Belfast, which is by a long shot the second city on the island, far bigger than Cork and Galway combined. Yet rents are much, much lower. A studio in Belfast is half the price of a studio down the road in Dublin. A two-bed flat of 85sq m in Belfast costs €625 a month, one third the Dublin equivalent and more than €300 per month cheaper than either Cork or Galway.
The emotional impact of postponing adulthood could well emerge as an issue in the coming decades
Northern Ireland allows us to compare and contrast. Having two jurisdictions on one island is akin to an economic laboratory. Something is wrong here and Belfast is the proof. Before we look at this in a bit more detail, consider the other consequences of the apartment market failure.
Exorbitant rents are not just an economic issue. They are a social issue and familial too because if you can’t move out, you don’t grow up. This is a simple statement of fact. Growing up involves certain milestones, such as moving out from your parents, maybe moving in with your boyfriend, girlfriend or just sharing with friends. It involves having a job that pays decently, allowing you to save a bit and plan for your future, with one eye on starting a family if you meet the right person. And for most, these milestones involve marrying or settling down and getting your own place. This is what becoming an adult means, more or less.
This is what these women in the queue were talking about when they talked about lifestyle.
In my generation it was possible to achieve all these milestones by your late 20s. It wasn’t easy but it was a realistic aspiration to aim for.
Now these milestones are being pushed out a decade or more. Growing up in Ireland is not what it used to be. Census 2016 recorded 458,874 persons aged 18 and over living with their parents, of which 58.6 per cent, or 268,944,were young and not so young men. A total of 189,930 young women were living at home and, worryingly, 215,088 of these young people at home were at work, meaning they can’t afford to move out despite having an income.
The emotional and possibly psychological impact of postponing adulthood could well emerge as an issue in the coming decades, simply because being a sovereign individual capable of standing on your own two feet is a fundamental ambition that most of us have.
The solution to the apartment crisis is an economic one. Ireland needs to build lots of apartments and build up. Belfast has done this. The Belfast skyline dwarfs Dublin’s. In recent years, Belfast has gone up and rents have stayed down. However we do it, the growing population demands that we have to house the equivalent of a town like Clifden every month for the next 50 years.
This social and economic task demands we get to the root of the problem. High rents and house prices are the consequence not the cause of the problem and the underlying cause in Ireland is that the interests of landowners have always been put in front of the interests of the citizen. It could be termed “radical feudalism” whereby we have all the rhetoric of a citizens’ republic but an underlying economic structure of land-based feudalism.
As long as that remains the case, Dublin Airport will be full of young, capable workers who emigrate, pushed out by higher and higher rents which enrich a smaller and smaller proportion of the public.