Question about housing policy in Ireland. I get the impression* that there's popular opposition to build-to-rent housing schemes. Why? They're common in the US and they're just another part of the housing mix. What have people in Ireland got against them?
* Impression is just from anecdotal observation of social media comments, which are probably not representative.
Because they are creating artificially high rents, and paying very little tax through various loopholes. I think registering as a charity is one.
In the south a landlord with just 1 or 2 properties could pay up to 40% of rental income in tax.
There are probably a few more complexities than that, but that's the gist of it.
Well the one beside me is 2100 for a 1 bed. And 75 per month for a pet!
They get massive tax breaks and then the small time lads hike up their rents pointing to the new development.
Build to rent is grand if there are some limits. In reality the government bought it all up, and controlled the rent.
You have to pay extra for a pet :o
The main problem is the Yield versus the downside risk. Yield is only good enough provided you get your money back.
Pet deposits are common in the states too and nobody seems to mind.
How are rents "artificially" high? Are they not just charging what the market will bear?
Yes, I'm not sure about artificially high rents myself. End of the day it's a case of supply vs demand. There are theories held by some that vulture funds are keeping some of their cheap acquisitions empty to keep demand high. Don't know about this either way.
I think HAP schemes have inflated rent overall. Rent pressure zones are contentious and may have had the opposite effect of what they were supposed to achieve. It got landlord's backs up and more conscious of going market rent. Where as before a landlord might have been happy to leave a long term tenant on the same rent, they now feel they have to raise the rent every year. Not doing so could have very negative consequences if they decide to sell, putting off investors and limiting the buyers market to private dwellers. Short term rentals like AirBnB have also reduced supply putting upward pressure on rent.
I think if these funds did actually build a lot of property to rent, then you could live with that. But until last year and they were stopped, they just bought up buildings being built anyway, so provided no extra accommodation.
Fiddling around with AirBnB and the like is just rearranging the deckchairs. There is a demand for short term and that needs to be met too. What is needed is more construction. All these Armenians and Georgians should be offered visas if they can lay a wall or skim a ceiling.
There is that with them just buying up a development. But And some may have been built.
In terms of leaving places idle the Business Post have good stuff on that racket.
Quote from: armaghniac on February 15, 2023, 07:16:48 PM
I think if these funds did actually build a lot of property to rent, then you could live with that. But until last year and they were stopped, they just bought up buildings being built anyway, so provided no extra accommodation.
Fiddling around with AirBnB and the like is just rearranging the deckchairs. There is a demand for short term and that needs to be met too. What is needed is more construction. All these Armenians and Georgians should be offered visas if they can lay a wall or skim a ceiling.
Fully agree the main problem is the supply side which has become critical at this stage.
I don't think it's so simple a solution as increasing the labour supply though. Building costs are astronomical compared to a decade ago. And not just raw materials driven, there's building, environmental, energy efficiency regulations and specs. There's planning problems, more difficult to get through. All this adds to the cost and reduces profit and increases risk for developer. Plus if/when these new units are built, for the new investors buying to rent, because the overall cost to buy is so much higher, the rents will have to reflect that cost to achieve a decent yield. So increasing the supply in a free market may not necessarily reduce rents.
Government involvement in building homes is really a decade too late. They will get their trousers pulled down more so than usual and someone will have to foot the bills i.e taxpayer. So providing incentives to the private sector to sort out is probably the best solution. Get supply up. But for a very noticeable drop in rents there probably needs to be another crash combined with this increase in supply.
Private ownership traditionally is the tenure of choice for most people in Ireland. It's probably built into our mentality from the experiences of our ancestors at the hands of English landlords. As I understand build to rent speculators are buying entire housing developments and therefore pricing out potential homeowners who are then forced to pay high rents