Tuesday 14 August 2018

Home truths: Students in residence for a princely sum

Raising the roof: NUIG students protesting against the steep 18pc increases in purpose-built accommodation costs on campus, which they describe as a
Raising the roof: NUIG students protesting against the steep 18pc increases in purpose-built accommodation costs on campus, which they describe as a "shakedown". Irish student block rents are now three times European norms
Sinead Ryan
Sinead Ryan

Sinead Ryan

My daughter is finishing up a Masters in Amsterdam and will be handing back the keys to her student flat - before it's turned around again for the September intake. The studio is self-contained with a kitchenette, living/study space and bed, with ensuite. It's in a new building of 300 or so units, freshly kitted out by Ikea and costs around €350 to €550 per month including utilities and wifi, depending on size. There are four such blocks, and that's just for one university. The Dutch government even offers a subsidy towards it - the huurtoeslag - if you find €3,150 for the academic year a little steep.

Last month, in Galway, students protested at the 18pc increase being applied to nine-month academic leases at Cúirt na Coiribe, the accommodation provider for NUIG, costing an additional €1,000 pa on a single room. In DCU on Dublin's northside, the students' union condemned the 27pc hike in rent which will see a nine-month tenancy cost €9,000.

This, of course, is against the background of rent controls in the 'normal' market, with 4pc caps in both cities on leases to families, rather than students.

The anomaly is felt hardest by parents sending their kids to study in the capital - and that's if you can find somewhere to stay at all.

Quite why student accommodation was omitted from Rent Pressure Zones which protected other tenants is unclear, but in a rare move, Sinn Fein's proposed Residential Tenancies (Student Rents, Rights and Responsibilities) Bill, being debated through the Dail, is doing so unopposed by other parties, including such accommodation in RPZs if it doesn't hit a snag along the way. The Department of Housing is grumbling over the legal definitions, but SF's Eoin O Broin said it wasn't fair to single out students (actually their parents in most cases) for hikes which are banned in the rest of the market. Of course, any physics student will know that every action has an equal and opposite reaction (or something), and in this case, it will be undoubtedly to curtail the splurge of building going on in this area.

Between 2017 and 2019 almost 1,800 new student beds are being provided in Dublin alone. There is planning permission for a further 2,294 in train and enormous contractors are flooding in from abroad to get the job done. You don't need a degree in business studies to know it's an income winner.

Dubai based Global Student Accommodation (GSA) has already plunged €130m into student hubs in the capital. It has four underway in the city, including New Mill in Dublin's Liberties, which will serve Trinity, DIT, RCSI and other colleges.

The 400 rooms are sleek, modern, smart… and expensive. Singles (with shared kitchen and common areas) are €249 a week - that's well over €1,000 per month, while the 'deluxe' studio - akin to what the Dutch pay €500 a month for, is three times that. Kavanagh Court, on Gardiner Street is around the same, and the prices are reflective of land costs, location, and the high spec, as in any city. Beckett House, in Dublin 1, which is owned by the US giant US giant Hines, starts its basic single hub from €230 pw for a 41-week tenancy (€9,430 pa). Its other shared housing units are similarly priced, and many are already sold out for the 2018/9 year.

They're not bad "value" - on the contrary, these are gorgeous living spaces, many with gyms, games rooms and on-site assistants, but they are an eye-watering burden for a family on a budget, especially if they have more than one child away at college.

There is no huurtoeslag or subsidy from Government, no HAP scheme, no tax relief for beleaguered parents and the maximum SUSI grant, which is strictly means-tested, amounts to €657 a month, but only if the parents' income is under €23,500 pa.

The student market is flying in Ireland, not least because of Brexit, the excellent English-led courses and the (relatively) cheap cost of programmes themselves. A Master's here can cost a fraction of the US or Asian degrees. There are expected to be 193,000 students by 2025, with the Higher Education Authority estimating a deficit of 25,000 beds, even at the current pace of building.

So, how do we navigate the fine line between encouraging foreign investment in badly needed housing, while damping down the onerous effect on students already struggling with fees?

One way is to charge foreign students a disproportionate premium for it, as we already do with fees. The other is to give Irish families a tax break. The third is not a populist view, but a hoary old chestnut - and that's to start developing a proper student loan scheme for fees and divert the subsidies currently going to universities into accommodation blocks.

The vast majority are currently outsourced to private investors, but why? College administrators may not want to be landlords, but this land, and particularly land in State ownership is slowly being handed over out of convenience rather than long-term planning as State assets. Now where have we heard that before?

Indo Property

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