Jake Mahaffey
The future looks bleak on the Emerald Isle. Ireland is a small island country of slightly over 5 million and it is currently facing a severe housing shortage. Since 2007, almost 1 million people have immigrated to Ireland, according to Statista. This swift increase in population has put a strain on the housing market. The problem is compounded by Ireland’s hesitancy to remove Covid restrictions on residential construction projects, and the massive backlog of projects still awaiting government approval. Due to the shortage, many Irish citizens are unable to obtain housing due to the rapid rise in rent and home costs for the scarce housing that is available.
Construction Restrictions
Normally, when there is a rising demand and a dwindling supply, the obvious solution would be to increase supply. For Ireland, that would mean building more homes and rental properties. However, doing so would be difficult in Ireland due to the large amount of bureaucratic red tape surrounding the residential construction business. Residential housing projects in Ireland must be
approved before construction can begin. As of February, there are around 70,000 housing units awaiting government approval. The massive backlog is partly due to Ireland’s hesitancy to remove additional construction restrictions that were put in place during the pandemic. Those restrictions also caused many Irish construction companies to take on projects in the United Kingdom, instead of waiting for restrictions to be lifted at home.
Stagnant Wages and Unemployment
In the last few years, wage growth and spending power has stagnated. Unfortunately, the upcoming Irish generation is now predicted to be poorer than their parents. Some in Ireland claim that this is a result of the younger generation being forced to compete with immigrants from places such as Poland, Lithuania, and more recently Ukraine, who will work for much less than the native Irish. This is true for low skilled jobs, but generally not so for skilled jobs. Even so, low-skilled workers are the group that faces the most pressure when it comes to affording a home or renting.
This is all occurring at a time when the job market in Ireland is severely limited. In quarter four
of 2022, there were only 27,600 vacant jobs in Ireland, while at the same time, there were
112,000 unemployed citizens in the country. Although more people eventually bring more jobs in
the long term, adding hundreds, of thousands of more workers into the labor pool over the next
few years is likely to exacerbate the problem.
Housing Demand has Outpaced Supply
Native Irish are also competing with new immigrants for housing as well. Late 2021 data shows
that the available for rent properties in Ireland is at an all-time low, with only 1,460 homes
available for rent across the country. In 2022 alone, Ireland admitted 120,700 new immigrants,
which included refugees from Ukraine and other countries around the world. The UN reported
that Ireland has struggled to find housing for the 80,000+ refugees that they have allowed into
the country since the beginning of the war in Ukraine. The Irish government has resorted to
housing these refugees in hotels and tents across the country until adequate housing becomes
available. Additionally, Ireland has pledged to take another 80,000+ refugees from Ukraine in
2023.
Solutions to the Problem
Ireland has many different problems that are contributing to its current housing crisis. The silver
lining is that there is plenty of room for improvement.
As mentioned above, Ireland’s construction industry is mired in red tape. Cutting these
restrictions would streamline the approval process and allow Ireland to begin building homes
without being held back. An expansion of the construction industry would also provide
employment opportunities for workers.
In addition to building new homes, Ireland can refurbish vacant homes. Ireland contains 80,000 vacant homes. Refurbishing these homes to a living condition would provide some relief to the housing crisis. This solution is limited, however. Even if all those homes are refurbished, its impact will diminish if the population of Ireland continues to grow at the current pace. There is a logistics problem as well. Most of these vacant homes are in rural areas, whereas most people are seeking to live in the city.
Alternatively, the Irish government could use its rent control powers. In an interview with The
Irish News, Peter McVerry called on the government to reduce rent by 25%, and to reduce
taxation on rental incomes by up to 50%. According to McVerry, this would make it more
affordable for families to rent, but also would not cut into landlord income due to the tax cut.
McVerry’s solution may make it more feasible to afford rent, but lowering prices will discourage
potential landlords from entering the rental business, and current landlords from expanding the
properties that they operate. If Ireland’s population continues to rise it is unlikely that the limited,
but now affordable, supply of rental properties will keep up with the skyrocketing demand.
It is also possible to decrease demand. To do so, the Irish government would simply need to
admit less immigrants and asylum seekers into Ireland. Less people in Ireland means less people
in need of housing. This idea has recently led #IrelandIsFull to trend on Twitter. The organization
associated with that hashtag would like the government to slow down the amount of immigration
to Ireland to allow for the housing market to stabilize. However, this idea was quickly denounced
as racist and xenophobic.
Excluding people from the country would be unpopular, but the Irish government has a duty to
provide for its own citizens before providing for the rest of the world. Helping people is fine, but
not at the cost of Irish citizens. Immigration should not be stopped completely in Ireland, but
only enough to allow the country’s housing market to stabilize.
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