Tuesday 23 October 2018

New offices are being built, but where are we going to house the people who will work in them?

Grand Canal area Dublin
Grand Canal area Dublin

If there has been one symbol of the revival of the commercial property market and perhaps the wider economy, it is Grand Canal Dock in Dublin.

In the past four years it has really come in to its own. It has been ground zero for the resurgence in the market.

Off hand I can think of at least six office blocks in the area that have changed hands for close to half a billion euro between them.

It is instructive that most of the blocks that are occupied in the area are taken by companies with large numbers of workers from overseas.

Google and in particular stand out of course, but there are many other smaller firms in the area that need staff with foreign languages and other skills that have to be brought in from elsewhere.

And this is creating a problem for the property market.

Namely, the lack of suitable homes for workers moving to Dublin for relatively short periods of time.

This newspaper has highlighted repeatedly the shortage of suitable office space around the country, particularly in Dublin, and the effect it may have on Ireland's ability to attract foreign direct investment and the jobs that come with it.

The shortage of suitable family homes has also received a large amount of attention.

With very little construction between 2010 and 2014, both those problems have become acute, although it appears some steps are being taken to address the office shortage at least.

What haven't been addressed, and show no sign of being addressed, are the over the top design regulations from Dublin City Council and the knock on effect they have had on apartment building in the capital.

The aim of the Dublin City Council regulations is commendable. Nobody wants slum flats being built. But requirements such as "dual aspect" style of construction are absurd.

This isn't about building homes for families, or even first time buyers.

This is about building high quality rental accomodation close to major employers, especially in areas such as the Dublin Docklands.

For example, take a (fictional) 25 year old Frenchman, who has moved to Dublin to work for Google for a few years.

He is single, works long hours, and when he is not working, tends to be out socialising. He likes to live close to work so he can walk or cycle his commute. Most of the time he is in his apartment he is sleeping, showering, or eating. He doesn't have a TV. If he is watching something, he is streaming it on his laptop.

The large, dual aspect apartment he is renting means nothing to him, except that it takes a sizeable chunk of his salary every month.

He would happily move into a smaller, cheaper, single aspect, apartment if it was available.

The above example is fictional, but it is representative of the problem with dual aspect regulations.

The city needs apartments specifically for renters who by their nature are transient.

In the past year I have stayed in a small studio apartment in Paris and a similar dwelling in New York. Both have been much smaller than the average apartment in Dublin, but both would be more than suitable for young renters. The truth is most people in their 20s don't need views from both sides of their flat and bedrooms that are at least 10.2 sq m in size.

An American friend of mine was flabbergasted to discover that he had a washer dryer in his kitchen when he moved over here. All his working life he had gone to the laundry room in his block to do his washing.

Of course he was delighted to have the facility in his kitchen, but he thought it was bizarre that he even had it.

These regulations have a knock on effect on the wider property market. The additional cost associated with them pushes up the cost of renting them out, which in turn pushes up the cost of rental accomodation across the city.

By one estimate, the cost of building an apartment core in Dublin is about three times what it is on the continent. That has to come down.

It is right that building regulations be kept tight across the market, but they need to be flexible. A 25 year old living here for 18 months does not have the same needs as a first time buyer with a young family. Dublin City Council needs to take this discrepancy into account.

Paul McNeive is away

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