Housing crisis turning employers into reluctant landlords
Colm O'Gorman of Lymar Contracts, Colette Bullock, HR business partner of Atlantic Aviation Group and Edward Manley, head of production AAG looking over the work in progress at Jamaica House, Sixmilebridge, to be used for staff accommodation. Picture: Eamon Ward
With the housing crisis showing few signs of abating, businesses are increasingly having to step in with staffing accommodation, including by buying or renting property.
It is impacting firms of all stripes, although the services industry appears particularly afflicted. Ireland has among the highest housing costs in the EU and services roles are typically not as well paid as those in the out-sized multinational sector.
Ryanair confirmed it had bought 25 houses for staff earlier this year, while luxury hotel group Killarney Hotels Collection also advertises subsidised housing for prospective employees.
Ireland’s chronic housing deficit can largely be pinned on one thing: in the decade following the 2008 crash that decimated the country, building stalled. Since then, the problem has been compounded by planning constraints, supply bottlenecks, a rapidly growing population, and an economy nearing capacity.
Food wholesaler Musgrave, which employs more than 40,000 people, making it Ireland’s largest private sector employer according to its website, has about 50 properties available for staff. It owns fewer than 10 of those, sources said.
Meanwhile, care home group Windmill Healthcare rents 28 properties to provide housing for some of its workers, of which there are more than 550. The number of properties it rents is only increasing, the group’s marketing manager Louise O’Sullivan told Bloomberg.
“I’m aware of a significant number of operators across the country, from small nursing homes to the large groups, all renting or purchasing properties,” Bank of Ireland’s health sector head Grainne Henson told Bloomberg, adding the onerous nature of supplying housing for staff was making some operators “reluctant landlords”.
Fast food chain Supermacs spent as much as €7m purchasing staff housing, it was reported in May. A subsidiary of Atlantic Aviation Group in Shannon has 36 en-suite bedrooms for employees, saying the current market has proved to be a "frustrating experience, with a scarcity of accommodation and high rent levels".
It is a key sticking point for voters and businesses alike, with the issue becoming a material constraint for big firms, according to Central Bank governor Gabriel Makhlouf. “Quite a few” of them are now buying property, he told an audience in the US.
Only now is the housing supply really picking up — in time for an election that must be held by March 2025. Almost 33,000 new dwellings were completed in 2023, according to the CSO, more than double the 2017 total. However, much more stock is still needed to meet demand, with the Housing Commission estimating, as of the 2022 Census, there was a housing deficit of between 212,500 and 256,000 homes.
That is not an ideal look for Ireland’s ardent and long-running campaign to attract foreign direct investment to its shores, thanks largely to its corporation tax offering.
The Government has committed to supplying an average of 33,000 units a year over the next decade. Beefing up supply was one of Taoiseach Simon Harris's key pledges when he took office in April, while the Dáil is also ratifying a planning bill the construction industry hopes will fix an often bureaucratic system.
“Housing issues are not unique to Ireland, but they have been causing considerable challenges for business in recent years,” Fergal O’Brien, an executive director at business group Ibec, said.
“It complicates a whole host of issues in terms of employee relationships with the firm but some of them are left with no choice.”
