Friday 21 October 2016

25,000-bed shortage and 'questionable' standards in student housing crisis

Published 02/09/2015 | 02:30

Student housing crisis: there will be an ongoing shortfall of 25,000 student bed spaces every year
Student housing crisis: there will be an ongoing shortfall of 25,000 student bed spaces every year

The standard of some privately-built student accommodation developed on the back of tax breaks for developers and investors is "questionable", according to a major new report to Government on the student housing crisis.

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The report, by the Higher Education Authority (HEA), says the current annual shortage of 25,000 bed spaces for students will persist for years unless radical action is taken.

The HEA found that colleges and private developers are planning to spend about €1.2bn between now and 2024 on building more student accommodation.

But, even with that level of investment, demand will continue to outstrip supply and there will be an ongoing shortfall of 25,000 student bed spaces every year.

According to the report, it costs about €85,000 for each new student bed - excluding any costs associated with land purchase. It means that providing another 25,000 spaces would cost an additional €2.1bn, on top of the €1.2bn already planned.

The HEA's Report, which is entitled 'Student Accommodation: Demand & Supply', makes a series of recommendations to address the crisis, through supports for provision of more accommodation, either on campus or in the vicinity of third-level colleges.

Many of the recommendations focus on offering grants and tax breaks to colleges, as well and making properties available to them, on a commercial basis, for student accommodation - either on their own or through joint ventures.

While the upfront costs are substantial, the report also notes that student accommodation is a revenue earner for colleges and last year provided income to the tune of €51m to the universities.

The HEA report also recommends using the recently established Ireland Strategic Development Fund to provide finance for on-campus accommodation projects or, with private sector developers, for off-campus accommodation.

And it identifies ways in which local authorities could assist, such as ensuring that a requirement for student accommodation is considered in reviews of development plans, and increasing the supply of lands available for such developments.

The HEA report estimates that demand for student beds in 2014 was for 57,100 spaces, while the number available was 31,300.

With the anticipated surge in college enrolments over the next decade, demand is expected to rise to over 68,670 by 2024, while available beds - even taking into account planned developments - will be just under 43,500.

According to the report, the problem is mainly in Dublin, Cork and Galway - and, to a lesser extent, in Limerick. The combination of campus and private accommodation in other areas is considered adequate to meet demand.

Apart from inadequate supply in the main cities, the report also touches on the issue of the quality of accommodation which, it states, needs to be considered.

"The standard and suitability of private student accommodation, particularly where Section 50 tax breaks have been utilised and capital allowances have been fully claimed, is questionable", it states.

However, while it raises a point about standards and suitability, it adds that the issue of quality in purpose-built private sector student accommodation "has not been fully examined as part of this exercise".

In relation to accommodation provided by colleges themselves, the report says facilities have been maintained to a high standard, with major refurbishments carried out or planned in many cases.

The HEA report has been drawn up in the context of recent Government initiatives on construction and social housing.

Irish Independent

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