Where will vital student housing come from?

Irish Times

8 hours ago

Ireland's housing permacrisis
is a wheel with many spokes, one of which is the issue of
student accommodation
and its provision.
It's a question that evokes strong emotions, not least from students, many of whom are on the front lines of the rental market melee or about to join it.
Answering it is proving difficult for the Government, and behind the scenes, some of the larger
purpose-built student accommodation
(PBSA) developers are beginning to lose their patience with the Irish market.
On the surface, at least, conditions on the ground would appear ripe for investment.
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Third-level enrolments continue to surge year-on-year, driven largely by growth in the international student population. Of the almost 206,400 full-time students enrolled in third-level education in Ireland last year, just 15 per cent were international students, according to the most recent Eurostat statistics.
Union of Students in Ireland supporters march through Dublin in 2023 to demand Government use its €65 billion 'rainy day' fund to tackle the student accommodation crisis.
Photograph: Dara Mac Dónaill/ The Irish Times
Yet, the number of international student enrolments has surged by 33 per cent in the four years to the end of 2024. By comparison, domestic enrolments were up 5 per cent over the same period.
So, while they remain at a relatively small percentage of the wider student body, international students are a fast-growing cohort and, to some extent, are driving growth.
In fact, the Government is targeting a 10 per cent increase in the number of foreign student enrolments in Ireland by 2030. It begs the question of how exactly it intends to cater for their accommodation needs.
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Significant investment needed for Ireland to pass its student accommodation test
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The answer seems to be a combination of some public and a lot of private investment. On the public side, then-Minister for Further and Higher Education
Patrick O'Donovan
in April 2024 unveiled plans to invest €100 million in the delivery of some 1,000 student beds.
More than half of the beds were to be delivered across two campus-adjacent schemes; 405 in
Dublin City University
(DCU), and 116 in
Maynooth
.
At the time, the
Union of Students in Ireland
accused the Government of engaging in 'smoke and mirrors', highlighting the fact that the 405 DCU beds had already been unveiled in March 2023 as part of a €40 million investment.
Opposition TDs, meanwhile, accused the Coalition of having launched the same student housing plan on three separate occasions under the minister and his predecessor,
Simon Harris
.
Former higher education minister Patrick O'Donovan unveiled plans to invest €100 million in the delivery of some 1,000 student beds in 2024. Photograph: SAM BOAL/Collins Photos
Still, as
Deloitte
highlighted in its latest Crane Survey report, the development at Buckley Hall beside the Maynooth campus is 'significant' because of the Government's involvement in the funding. If delivered in the 2025/26 academic year as planned, the 115 or so beds will put something of a gloss on the completions figure.
On the private side of the funding equation, the maths is getting messy. Some 1,400 PBSA bedspaces were under construction in Galway, Dublin, Limerick and Kildare in the first quarter of 2024, according to Deloitte, a jump from 1,160 last year. Beyond that, however, it's difficult to get a clear picture of the pipeline.
Another big four accounting firm,
KPMG
, conducted its own deep dive into the sector earlier this year. Commissioned by UK-headquartered student housing multinational
Global Student Accommodation
(GSA), the research is focused on Dublin due to the concentration of universities and other institutions.
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And it seems the PBSA sector is suffering from an all-too-familiar malaise. In Dublin alone, some 245 developments have received planning permission since 2018, KPMG said, with the capacity to accommodate 8,599 students. Yet, construction was under way on less than a third of these developments by March, according to the report.
Planning permissions for some of these developments, including schemes in
Drumcondra
,
Dublin 11
and
Goatstown
in
South Dublin
, are set to expire in 2025 or early 2026. A further 15 planning applications for student housing schemes are in the pipeline.
Construction costs, which surged in the wake of the pandemic and remain more than 25 per cent above 2021 levels, appear to be an important factor in this slowdown.
These and other issues around planning delays have 'hindered project delivery in the planning pipeline', KPMG said, 'resulting in a notable, pronounced supply shortage which may impact the county's growth and development'.
In conclusion, the number crunchers said that the shortfall of student beds in Dublin – which was between 25,000 and 30,000 last year, according to separate estimates – could reach 45,000 over the next decade if the student population expands at the expected rate.
Minister for Higher Education James Lawless claimed student accommodation would be exempt from new rent rules. Since, however, the housing minister James Browne said there will be no such special exemptions. Photograph: Nick Bradshaw / The Irish Times
Against this backdrop, KPMG said accelerating the delivery of PBSA schemes is 'crucial', particularly outside the typical city centre clusters.
Despite unveiling a new long-term policy to develop student housing last year, there has been 'limited progress in certain campus projects', the report's authors said, and policies aimed at accelerating delivery are much needed.
GSA, which commissioned the KPMG report, has expressed frustration with the Government's approach. Backed by the likes of private equity firm Harrison Street, it operates some 4,000 student beds through its
Yugo
brand name across prime locations in Dublin and Cork, making it one of the biggest landlords in the country .
Despite its heft, the company say it has struggled to get the attention of successive ministers for higher education. Documents, released to The Irish Times under the Freedom of Information Act last year, revealed that the global operator had been unable to secure a meeting with Mr O'Donovan, despite several requests during his term in office last year.
GSA said this lack of engagement has continued into 2025, and under the new minister,
Fianna Fáil
TD
James Lawless
. 'For over a year, we have sought engagement with the Government but have yet to secure a meeting with any minister,' John Jacobs, global head of capital markets at GSA, said.
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The global PBSA operator is particularly aggrieved, given the substantive changes to the Government's
Rent Pressure Zone
(RPZ) scheme that were announced last month. GSA is in the dark, more or less, as to whether the changes will affect its business in the Republic or not.
In the week that the overhaul – which the
Central Bank
has said will cause 'pain' for renters – was announced, Minister Lawless claimed student accommodation would be exempt from what Opposition TDs have characterised as a loosening of some of the rules for landlords. However, later in the week, Housing Minister
James Browne
said there will be no special exemptions for student housing, appearing to contradict his parliamentary party colleague.
GSA said it was deeply concerned about the ambiguity. Mr Jacobs said that if student housing was exempt from changes in regulation to RPZs, it would be 'a disastrous regulatory shift and a tipping point for investment and for the future development of much-needed homes for students in Ireland'.
Getting to the bottom of the confusion has proved more difficult than predicted. Asked to clarify the minister's understanding of the matter, a spokeswoman for the
Department of Higher and Further Education
said last week that 'engagement' was happening at an 'official level' between it and the
Department of Housing
and would 'continue over the coming weeks'.
She said private providers have a 'significant role' to play in solving the student housing crisis and that senior departmental officials have met the large operators since the student accommodation unit was established in 2022.
Meanwhile, a spokesman for the Department of Housing said translating the RPZ changes into legislation was a 'high priority' for the Government. 'Tailored rent control provisions for the student-specific accommodation sector will come into effect on March 1st, 2026.' As to the precise nature of these arrangements, the minister 'will continue to engage' with the higher education minister in the drafting of the legislation.
Rent pressure zone limit what you can charge tenants but you will get no allowance from Revenue for the loss compared to market rents. Photograph: iStock
GSA is only one player on the PBSA pitch - and its relationship with the Government parties has been a troubled one.Last year,
the firm had threatened legal action against the Coalition
after then-higher education minister O'Donovan enacted legislation to ban private student landlords from forcing students to accept leases longer than the traditional academic year.
Those changes were announced by his predecessor, Simon Harris, in response to an outcry from squeezed students and Opposition TDs over Yugo's and Hines-owned Aparto's decision to switch to a 51-week lease model.
Still, the RPZ debacle continues 'a pattern of big policy decisions being introduced without meaningful consultation with those actively delivering homes', Mr Jacobs said.
Last year, the Department of Higher Education formed an expert advisory group on student accommodation. In response to queries last week, a department spokeswoman said its membership consists of civil servants, nominees from the Higher Education Authority, lobby group
Irish Institutional Property
(IIP), University College Dublin and the Housing Agency. Apart from Hines, which is a member of IIP, none of the big student landlords are on the panel.
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Why, exactly, the Coalition appears so ambivalent is unclear, but also, some in the industry believe, it is emblematic of the decision-making paralysis in Government on housing matters.
After all, the State is hugely reliant on the private sector to deliver and operate student beds and has been for the past decade, after the universities effectively exited this stage during the austerity years. Of the 48,000 or so private student beds in the Republic last year, according to departmental figures, two-thirds were provided by the private sector, with higher education institutes operating the remainder.
However, it is unlikely that PBSA alone will solve the crisis. According to the KPMG report, off-campus student housing schemes are on average 16.5 per cent more expensive than on-campus PBSA and 9.5 per cent more expensive than on-campus accommodation provided by the universities themselves. That means it typically caters to deeper-pocketed international and postgraduate students, who remain a small subsection of the student population, albeit a rapidly expanding one.
Opposition parties, particularly
Sinn Féin
and the
Labour Party
, want the Government to give third-level institutions more funding and a freer hand to approach developers directly to build student housing. Privately, PBSA operators and investors believe it's unrealistic to expect universities and institutes to deliver at the scale required to solve the crisis.
In the middle of all this are the already-squeezed students and their parents, buffeted by rising living costs and staring down the barrel of a €1,000 hike in third-level fees in the 2025/26 academic year. There is little evidence at the moment that the politicians will be able to get their arms around the situation any time soon.