Current Affairs

Caught in a rent trap… now I may be forced to leave town I call home

STATISTICS, facts and figures about Ireland’s housing crisis have long had the power to shock.

But it is only when you drill down to the man and woman on the street that you get a real sense of how this most pressing issue of our time is having an impact on people across the land.

Evening Echo, 21 August 2018

Ronan Daly, who might have to cut his ties with Kinsale after 26 years because of the housing crisis. Photo: Nicky Sullivan

Ronan Daly is a local businessman who grew up in Kinsale.

However, the 35-year-old is caught between the rock of that coastal town’s steep-and-rising rental market and the very hard place of its steep, spiralling property prices.

Ronan, who married this year and has two children, aged one and four, and a 17-year-old stepson, has lived in Kinsale for 26 years, and been renting in recent times.

“It’s almost impossible to save for a deposit,” he said. “And the worst part is that we’d pay less on a mortgage.

“We’ve been doing everything right. We don’t spend frivolously, and we both have good jobs.

“But our landlord has just advised us that he’s selling so we don’t know where we’re going to be once the new school term starts.

“Even the areas around Kinsale are becoming too expensive. If I have to move to Bandon, that’s going to have an effect on my business. It’s incredibly stressful,” he added.

And Ronan is not alone in his experience of facing the choice of paying up or getting out of his home town.

“I have a big group of friends, all aged between their late twenties and late thirties, and not one owns their own home,” he said. “It’s nothing like it was 20 or 30 years ago when you could save up for a deposit and get on the ladder.

“I should be paying into my own property to create a legacy for my children — not paying rent.”

Ronan’s story is a microcosm of the problems facing Kinsale and just about every other community, large and small, in Ireland.

In Kinsale, the medium and long-term rental market is shrinking ever smaller, and adversely affecting the town’s ability to attract and retain the talent it needs to sustain its vital hospitality industry.

“We’re finding it hard to find people to fill the positions we have because of the availability of housing, and also the cost,” said David Good, a co-owner of two hotels and other businesses in Kinsale, in words that were echoed by other members of the hospitality sector.

With fewer properties available for longer term rental, the law of supply and dermand is kicking in, and rents are spiralling on those that are.

A review of Kinsale estate agents’ websites and daft.ie in early August revealed just six properties available for medium or long-term rental there, in a town with a population of more than 5,250 people. Similar reviews conducted in July were no more fruitful.

In August, of the properties listed, the lowest available price was €1,200 for a one-bed apartment.

The average cost of renting one bedroom worked out at €625, and this represents a substantial chunk out of the after-tax minimum wage of €1,547 that many working in the hospitality sector will earn, not including any tips they might receive.

The word that springs to many people’s lips when discussing the housing crisis in Kinsale is Airbnb — the online marketplace for short-term holiday rentals that has given homeowners a new way to capitalise on their properties.

At the height of this year’s tourist season in early August, 141 Kinsale properties were listed on Airbnb, though that number varies depending on the day you look. According to Airbnb, 170 rooms — of which several may be part of one property — are registered with the platform for Kinsale.

At least this trend is in turn addressing another problem, namely the shortage of available accommodation for the growing number of tourists who visit Kinsale each year.

“It’s a catch-22 for us because there is a shortage of beds for tourists,” said Liam Edwards, owner of long-standing restaurant Jim Edwards and president of the Restaurants Association of Ireland.

“For each property that’s out there (on Airbnb), that’s more tourists who have the accommodation they need, which is great for the restaurants and other businesses in town.

”On the other side, those rooms would have been rental accommodation before, so we just don’t have the same supply anymore.”

The results are being sharply felt.

“Trying to get people to relocate to Kinsale is a challenge, and at the moment we’re feeling wage pressures because of the lack of availability of staff,” said David Good, whose hotel had to accommodate two staff members in its own rooms near the start of the tourist season because of the lack of any available property for them.

Liam Edwards agreed. “At the start of the season we were working with an Italian recruitment agency. We sent out our packages, which were above the norm to entice them to come. But, unfortunately, when they were looking at Kinsale and the cost of renting, they just felt that it didn’t look as good as it should have,” he said.

“Our industry is hit the hardest,” he added, noting that many working in the sector are at the beginning of their careers, and may not yet have their own transport.

“Chefs who would come to us at the ages of 21 or 22 are just not seeing Kinsale as a viable option anymore,” said Liam, who added that long established businesses have been able to watch the issue emerge and adapt to the changing pressures. However, newer ones — and those yet to establish — may find it harder.

Colm Ryan, the owner of Cru, which opened on Kinsale’s famed ‘Eat Street’, otherwise known as Main Street, in June this year, would agree. His two lead chefs are currently living in his own home.

After being let down by a string of Irish chefs, Colm felt his only option was to recruit from the UK. But Kinsale’s housing situation makes that difficult.

“If they had to pay for accommodation in the town, it wouldn’t be worth their while coming,” he said.

Cormac Fitzgerald, director of accountancy and business consultancy firm Fitzgerald & Partners, says the lack of available accommodation may be having wider, unseen, effects.

“As a large employer in Kinsale and as an accountant advising large employers in Kinsale, the shortage of rental accommodation is a key factor hindering progress and a blocker to growth,” he said.

It is impossible to assess how many businesses may have looked at Kinsale and chosen not to invest there — but one small local business owner who did not wish to be named said they could not find a premises into which to expand their existing, successful business.

The effects are not only commercial. Tony Lane is the manager of the Kinsale branch office of the Department of Social Protection and works with vulnerable families who are feeling the pressure.

“You can just imagine the impact of not having a home,” he said. “We don’t have homeless people in Kinsale, we’re very lucky in that sense.

“But we have pressure on people in houses that are overcrowded. And people need to get out so they can start to map their own futures out.”

There are other factors at play that affect the housing sector in Kinsale, such as its desirability as a location for those seeking to buy second homes thanks to its scenic setting on the sea.

Meanwhile, Airbnb defended its presence in Kinsale. “Airbnb allows visitors to Kinsale to stay in local homes and boost the incomes of local families and communities,” said a spokesperson. “Last year alone this put €1 million in the pockets of local residents.

“Experts agree that Airbnb has no significant impact on the housing market; entire home listings represent less than 1.5% of Kinsale homes, and the typical host shares their home for around four nights a month. “

Airbnb asserts that numerous reports have highlighted that vacancy rates and disused land are a primary driver of lack of supply and increased pressures on housing, including in Kinsale.

The last census, in 2016, would support that. It found almost 20% of Kinsale’s urban housing stock was vacant, a figure that falls to just over 9% in the Kinsale rural area.

Taking figures from Ireland’s 2011 census, Kinsale’s daytime working population amounted to almost 1,600. In that context, taking the 170 Kinsale rooms registered with Airbnb out of the available rental market puts a substantial squeeze on the workforce’s options, especially when you take out the number of people who own their homes.

It’s not necessarily the case that Airbnb properties and vacant properties are separate though, and many may be one and the same. “You see a lot of houses sitting idle for six months of the year, then making a fortune for the rest of it,” said one Kinsale handyman, who also did not wish to be named.

Brendan O’Sullivan, director of UCC’s Centre for Planning Education & Research, notes that what is happening in Kinsale is part of a trend affecting all of Cork’s metropolitan area, though Kinsale is subject to a wider range of pressures than other areas.

“It’s a double-whammy for Kinsale really,” he said, referring to its position close to Cork city and airport, and the so-called coastal phenomenon, which makes the town attractive to second-home buyers.

Mr O’Sullivan also noted that there is an anomaly in the way that property zoned for residential use is now being used commercially in towns like Kinsale.

“An Bord Pleanála has indicated that letting property in this way constitutes a change of use, for which planning permission should be required. Local authorities probably have the power to enforce this, but they haven’t exercised it yet.”

Earlier this year, the Government was criticised for failing to act against Airbnb and other online rental platforms in the face of a growing national housing crisis. Legislation sponsored by Labour senator Kevin Humphreys, which would require homeowners who offer short-term lets for more than six weeks a year to apply for planning permission, is now working its way through the Dáil.

In April this year, Revenue issued a clarification on the tax payable under short-term letting arrangements, and in June wrote to a number of homeowners to advise them that their tax affairs were under investigation.

While this may open up some properties in the long term, others feel that small, private landlords need greater incentives and protections too. “All the small landlords are gone,” said a local estate agent. “There’s so much regulation that it puts people off, and then they’re so highly taxed on the income they get from it, why would they do it?”

Yet, even as it restricts their ability to employ, business owners also agree that Airbnb serves an important role in Kinsale.

“In effect, there is another huge hotel in the accommodation sector,” said Cormac Fitzgerald. “But it does contribute to the bars, restaurants and shops that Kinsale has to offer.”

“Kinsale is part of a wider trend,” said Liam Edwards. “But it’s a lot more difficult here too, especially when our main industry is so staff intensive. It’s definitely a major worry.”

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