Cost-Rental Homes: High Demand Highlights Housing Crisis in Ireland
More than 4,600 people applied to rent just 195 cost-rental apartments in Dublin’s Shanganagh Castle, revealing both the popularity of the new rental model and the severe shortage of affordable housing in the area.This record number of applications for the Land Advancement Agency (LDA) apartments signifies a desperate need for affordable options, particularly in Dublin. Applicants could choose from studios starting at €1,175 per month, one-bedrooms for €1,250, two-bedrooms at €1,575, and three-bedrooms for €1,775. Once applications closed, a lottery will randomly select eligible renters from the nearly 2,200 applicants who met the program’s criteria. Cost-rental housing is designed for low- and middle-income earners,with a maximum income limit of €66,000 after tax. Applicants must demonstrate they can afford the advertised rent, which shouldn’t exceed 35% of their monthly income. Some flexibility exists for those who have previously managed higher rents in the private sector. Housing expert Lorcan Sirr suggests the high number of applicants for relatively expensive rentals doesn’t point to a need for more rental housing, but rather a dire lack of homes for purchase. “The rent for these is the equivalent of a mortgage. Actually,the three-bed is more expensive than a €350,000 mortgage,” Sirr stated.”This says to me there are an awful lot of people out there desperate for a home to own,who could afford mortgage repayments,but can’t find anywhere to buy.” Further highlighting the affordability challenge, a recent report reveals first-time buyers now pay €88,000 more for a house than they did five years ago. The Banking and Payments Federation Ireland (BPFI) found the median income for first-time buyers in the first half of 2024 was €90,000,with a median age of 35 – considerably older than in previous decades. The BPFI report also noted that the median price for a first-time buyer home rose from €272,000 to €360,000 between the first half of 2019 and the first half of 2024. Applicants for cost-rental homes cannot receive social housing support like rent supplement or HAP, must not own property, and the apartment size must match their household needs. At Shanganagh Castle, one- and two-bedroom apartments proved most popular. of the eligible applicants, 216 sought studios, while 896 wanted one-bedrooms. Almost the same number, 892, aimed for the 107 two-bedroom units, and 211 desired one of the 29 three-bedroom apartments. While cost-rental provides more security than the private rental market, according to Sirr, its cost, especially in Dublin, presents a meaningful barrier. He argues that “There is a fundamental flaw in the Irish model of cost-rental, which seems unique across Europe, that the cost-rental is more expensive than a mortgage.” He suggests that the focus for the next government should be on developing housing for affordable purchase rather than solely focusing on rental options. Recent figures from the Department of Housing show construction started on 54,574 homes in the first 11 months of 2024, an 84% increase compared to the same period the previous year. While Dublin City Council area saw the highest number of new builds (6,724) followed by Fingal (5,483) and South Dublin (4,486), only 2,995 homes were built in Dún Laoghaire Rathdown, where the Shanganagh estate is situated. The LDA’s largest development to date at Shanganagh Castle includes nearly 600 homes. recently, the first 51 “affordable purchase” houses, priced up to €495,000, were sold.Another 40 apartments will be available next year. Further, 111 cost-rental apartments will be available in 2025, with the remaining 200 apartments designated for social housing.## Cost-Rental Housing: A Beacon of Hope or a Drop in the Ocean?
**[Host Name]:** Welcome back to archyde Insights. Today, we’re delving into the increasingly pressing issue of affordable housing in Ireland. Joining us is [Alex Reed Name], a housing policy expert with [Alex Reed Affiliation].[Alex Reed Name], thanks for joining us.
**[Alex Reed Name]:** Thank you for having me.
**[Host Name]:** Recent news has highlighted the immense demand for cost-rental housing, with over 4,600 applications for just 195 units in dublin’s Shanganagh Castle. [[1](https://www.dublinlive.ie/news/dublin-news/applications-open-195-cost-rental-30542945)]What does this overwhelming response tell us about the state of the housing market in Ireland?
**[Alex Reed Name]:** This is a clear indicator of the dire need for affordable housing options in ireland, especially in urban areas like Dublin. The sheer volume of applications for these 195 units shows how many people are struggling to find decent, affordable places to live.
**[Host Name]:** could you elaborate on the cost-rental model and who it’s designed to help?
**[Alex Reed Name]:** Cost-rental housing aims to bridge the gap between social housing and market-rate rentals.It targets low- to middle-income earners who are priced out of the private rental market but may not qualify for social housing.
These units are typically offered at rents significantly below market value, ensuring that housing costs are affordable and lasting for the renter. Eligibility is determined by income limits,and renters are vetted to ensure they can afford the rent without undue strain on their finances.
**[Host Name]:** That sounds promising. However, with such high demand and a limited number of units, are these projects just a drop in the ocean in addressing the wider housing crisis?
**[Alex Reed Name]:** While cost-rental housing is a commendable step in the right direction, it’s certainly not a silver bullet solution. The scale of the current crisis demands a multifaceted approach.We need increased investment in construction of both social and affordable housing units across the country.
Moreover, we
need to address issues like land availability, zoning regulations, and construction costs to facilitate the progress of more affordable housing options.
**[Host Name]:** Certainly,a multifaceted approach seems crucial. Looking ahead, what are your hopes for the future of housing affordability in ireland?
**[Alex Reed Name]:** I hope to see a sustained commitment from the government to prioritize affordable housing as a basic right. this includes investing in social and cost-rental housing,implementing policies to curb speculation in the housing market,and promoting inclusive urban development that caters to diverse needs and income levels.
Ultimately, ensuring everyone has access to safe, secure, and affordable housing should be a top priority for Irish society.
**[Host Name]:** A powerful message indeed. Thank you, [Alex Reed Name], for sharing your insights with our viewers. This has been Another episode of Archyde Insights.
