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THERE WERE TWO big announcements about ‘affordable’ apartments in Dublin during the week, but many people are still priced out of the new developments.
The new apartments – at Bolands Mills in the city centre and a site near the Phoenix Park in Dublin 7 – are part of wider plans to alleviate the housing shortage in the capital.
Affordable housing is often defined as when a person is spending less than 35% of their salary on rent on mortgage repayments.
As Ireland continues to battle a housing crisis and demand far outstrips supply, Dr Lorcan Sirr said “the concept of what’s affordable seems to be increasing all the time”.
The lecturer at TU Dublin and housing policy analyst told The Journal: “The definition of what’s affordable seems to be creeping up in line with house prices, rather than creeping up in line with wages or salaries.”
Sirr said many renters are spending more on housing than others are spending on mortgage repayments.
The average monthly mortgage repayment was around €1,400 nationally in 2023, according to Central Bank statistics. Many households are paying more than this in rent every month, without the same security of tenure, Sirr pointed out.
On Tuesday, Dublin City Council unveiled details of an ‘affordable purchase scheme’ for apartments at the new Montpelier development (the former O’Devaney Gardens site) near the Phoenix Park in Dublin 7, which is set to launch at the end of April.
In the first tranche of available apartments, one-beds start from €258,000 and two-beds start from €334,000. The prices vary depending on the buyers’ income and the exact location of the apartment.
A number of houses will also be available in the development, which is opening in different phases.
The one-bedroom units are aimed at a couple or individual who earns around €59,000, the council said in a statement. Households (an individual or couple) with an income of €75,150 will be eligible to apply for a two-bedroom apartment.
“Households on lower incomes, who have additional savings, may also be eligible to apply,” the council said.
Sirr questioned the income thresholds, saying a huge number of single people in particular will be immediately priced out.
Also on Tuesday, it was announced that a batch of apartments in Dublin city earmarked for key workers – such as teachers, nurses and gardaí – would have rents ranging from €1,710 for a two-bed apartment or €1,850 to €2,100 for three-bed apartments.
The rent rates are being advertised by Clúid, the approved housing body managing the Bolands Mills scheme, as a discount of 27% and 36% on the market average in Dublin 4.
Sirr said just because something is cheaper, “that by definition, doesn’t make this affordable”.
The Bolands Mills development is aimed at key workers who live or work within a 1.5km radius.
The 35% figure comes into play here – applicants for these apartments must have a household income that means the rent is not higher than 35% of their salary, unless they can demonstrate they have paid the same rent or higher for the preceding two years.
Dr Laura Bambrick, Head of Social Policy & Employment Affairs at the Irish Congress of Trade Unions, said most newly-qualified teachers, nurses and gardaí earn a basic salary in the region of €36,000 to €41,000.
So, as they would be splitting the cost with roommates, they would each spend less than 35% of their income on rent every month.
However, she said other essential workers who are earning less than this would struggle. For example, someone on the minimum wage of roughly €27,000 per year could not afford to rent one of the two-bed apartments, if we’re using the 35% rule.
Bambrick said “extra supply is always welcome” in the housing market, but we shouldn’t accept that 35% of income is the standard rate we “should” be paying for rent.
35% – instead of that being the ceiling, it has moved into being the floor.
“People think nearly 35% of your take-home [pay] should be going on your housing costs, instead of saying no. At 35%, the alarm bells should be going off. It’s at the very upper end of affordability.”
The Bolands Mills apartments have been leased by Google, which is redeveloping the area, to Clúid for 25 years.
When asked about the cost of rent in the development, a spokesperson for Clúid said: “It is widely accepted that less than 25% to 35% of disposable income being spent on rent is affordable.
“A significant amount of work went into setting the rents following a benchmarking analysis of the key worker salaries.”
The spokesperson said the rents are “manageable and sustainable for a key worker household that currently finds it difficult to pay market rents, but at the same time is not eligible for social housing”.
“This means that rent should be manageable for a household whose income is just above the maximum income limit for social housing, as well as for households on higher incomes.”
A spokesperson for Dublin City Council said the Affordable Housing Act 2021 “sets household income thresholds and that the sale of affordable homes must be a minimum of 15% below open market value”.
The council “delivers affordable homes in line with these requirements”, the spokesperson said via a statement.
The Department of Housing in turn provides funding to support delivery, they noted.
Using the Affordable Housing Fund, the council is offering homes at Montpelier “at a discount of 18% to 22% to open market value”, in excess of the legal requirement that such homes be 15% below open market value, the statement added.
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