July 25, 2024

KT Business

The Business Servicess On for You

Ireland’s housing crisis is so grave that employers are now getting into the landlord business and buying property for their staff

3 min read

With Ireland’s housing crisis showing few signs of abating, businesses are increasingly having to step in with staffing accommodation, including by buying or renting real estate.

It’s impacting firms of all stripes, although the services industry appears particularly afflicted. Ireland has among the highest housing costs in the EU and services roles are typically not as well paid as those in the country’s out-sized multinational sector. Ryanair Holdings Plc confirmed it had bought 25 houses for staff earlier this year following a Business Post report, while luxury hotel group Killarney Hotels Collection also advertises subsidized housing for prospective employees.

Ireland’s chronic housing deficit can largely be pinned on one thing: in the decade following the 2008 crash that decimated the country, building stalled. Since then, the problem has been compounded by planning constraints, supply bottlenecks, a rapidly growing population, and an economy nearing capacity.

Food wholesaler Musgrave, which employs over 40,000 people, making it Ireland’s largest private sector employer according to its website, has approximately 50 properties available for staff. It owns less than 10 of those, people familiar said. 

Meanwhile, care home group Windmill Healthcare rents 28 properties to provide housing for some of its workers, of which there are more than 550. The number of properties it rents is only increasing, the group’s marketing manager Louise O’Sullivan told Bloomberg News.

“I’m aware of a significant number of operators across the country, from small nursing homes to the large groups, all renting or purchasing properties,” Bank of Ireland’s health sector head Grainne Henson told Bloomberg News, adding that the onerous nature of supplying housing for staff was making some operators “reluctant landlords.”

Fast food chain Supermacs spent as much as €7 million ($7.5 million) purchasing staff housing, state broadcaster RTE reported in May. A subsidiary of Atlantic Aviation Group in Shannon, Ireland, has 36 en-suite bedrooms for employees, according to an Irish Independent report from February.

It’s a key sticking point for voters and business alike, with the issue becoming a material constraint for big firms, according to the country’s central bank governor Gabriel Makhlouf. “Quite a few” of them are now buying property, he told an audience in the US.

Slow Home Building

Only now is housing supply really picking up — in time for an election that must be held by March 2025. Almost 33,000 new dwellings were completed in 2023, according to the statistics office, more than double the 2017 total. However, much more stock is still needed to meet demand, with the Housing Commission estimating that, as of the 2022 Census, there was a housing deficit of between 212,500 and 256,000 homes.

That’s not an ideal look for Ireland’s ardent and long-running campaign to attract foreign direct investment to its shores, thanks largely to its corporation tax offering. 

The government has committed to supplying an average of 33,000 units per year over the next decade. Beefing up supply was one of the prime minister’s key pledges when he took office in April, while the parliament is also ratifying a planning bill that the real estate industry hopes will fix an often bureaucratic system. 

“Housing issues are not unique to Ireland, but they have been causing considerable challenges for business in recent years,” Fergal O’Brien, an executive director at business group Ibec, said. “It complicates a whole host of issues in terms of employee relationships with the firm but some of them are left with no choice.”

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