Rental Costs - Unreal!!


#843

I assume he doesn’t mean literally contiguous Dublin all the way to Athlone; more a network of commuter towns. Some hyperbole may also be involved :slight_smile:


#844

That’s one factor that causes high prices and depresses supply. The cost of land is another one. It’s not rocket surgery – allow developers to build higher on the same land and the cost per unit drops.


#845

Yes, but land costs are elastic, so as soon as the rules change to allow higher rise, land costs will go up. The benefit goes to those who have bought land already before the rule change.

One way to push costs down is to rezone large amounts of land, thus creating a glut in land supply. That could result in lower density building, except that planning will prevent that - there are loads of planning rejections on basis of insufficient density.


#846

They are only elastic if they haven’t been bought before the rule changes. If a developer already has the land, they can now build more units on the same land. It’s a once-off benefit though.

Land price is only one benefit of the rule change though – the build cost per unit is also smaller for higher rises until you get to 40-50 stories IIRC although I don’t have the figures handy.


#847

My answer was an attempt to answer the question that you asked. Perhaps you should have asked if government taxes were part of the problem if that was the question that you really wanted answered. As Mantissa pointed out taxes are part of the equation - if the land cost per unit is decreased, since the government tax take is a percentage it will be based on a lower base. At the density multiples I suggested 160-200 per ha vs 15-20 per ha, the base cost of land will be 1/10th of what it would have been - the suggestion seems to be out there that developers cannot build at affordable prices because of land costs, the only ‘sunk’ cost in the development business, then a higher density resolves part of that problem. Another large part of the problem is that developers are trying to sell developments on land that they paid unrealistic prices for - this is exacerbated by all the mechanisms that we have put in place to ensure that mark to value of land banks does not occur (NAMA, back door deals, no tax on unused land).

The state has land in Dublin that it owns via NAMA - that land should be put to use for high density housing. Private construction companies can be brought in to build on that land and the state can choose to impose taxes as it wishes on that construction. This would have to be put out to European tender, and we could benefit from European experience of building high density housing such as we see in other European countries. Perhaps the builders here don’t have sufficient experience to build that style and quality of housing? If the builders will not build then the state must - this has been done in the past to overcome dysfunctional markets and situations where the task was too great for single builders to take on (e.g. Slum clearance in Dublin and in the UK, and the post-war situation in the UK).


#848

Build cost per Sq ft rises once you go over 3 stories - ignoring the cost of common areas and lifts.

For the record the cost per unit is pretty similar 4 to 8 stories but once you go over certain height (how how can a fire ladder reach?) you get a whole world of additional fire safety measures (i.e. two fire escapes per floor etc.)


#849

Yes, my question was poorly phased. I was trying to prompt a discussion of the underlying factors.

High rise has a part to play but it is one among many of equally important considerations i.e. tax treatment of gombeen landlords, the provision of social house, planning permissions, treatment of property tax etc.


#850

But if land prices are ‘elastic’ (although I think you mean ‘inelastic’) won’t rezoning just leave land prices unchanged?

You are suggesting that changes in restrictions on land use in one dimension (building height) makes no difference but an another (agricultural to residential use) will make a difference.


#851

Land values are driven to a large degree by the numbers of houses/apartments it is possible to build.

Assuming €50k per unit and a density of 20 per acre this leads to a price of €1m.

Whereas a density of 200 per acre suggests a price of €10m.


#852

But surely if you said that all vacant land in the city had no restriction on density (either through no height restrictions or something else) you would see a decline in land prices, all else equal, no?


#853

Cost does go up per floor but so does marginal revenue due to the prestige factor.

See ncas.rutgers.edu/workingpaper20082

I’m not sure what point you’re trying to make – should we all go back to living in thatched bungalows?

The fact that increased height leads to lower costs per unit up to a relatively high limit is intuitively obvious and I’m not inclined to argue about it.


#854

FWIW, I asked a major estate agent in the commercial market if building height restrictions were an impediment to construction.

He said no, and that rents would have to increase substantially for that to be the case.

This was 2013 or 2014 I think, so the sums may well have changed since.


#855

Bungalows? :unamused: Bah! :frowning:

If we went back to living in caves, we’d all be billionaires! :smiley: 8DD

:-GC


#856

Only if the caves are in good Dublin numbers.


#857

Can’t be doing that.
It would mean the dopes who paid bubble era prices for their sites would lose money and crystallise bank losses.
Much easier to hold a new generation of suckers to ransom.


#858

This is incredible (good) news imho.

Estate agent has to pay €3,000 to single mum after discriminating against her
**On April 17, 2016, she emailed the letting agent to state:
“I’m a single mum with one toddler. I’m looking to rent using the Housing Assistance Payment (HAP) scheme. Could you let me know if this would be agreeable. Thank you.”
The estate agent stated: “HAP is acceptable but the landlord is looking for a couple here I’m afraid, apologies on this. Kind regards.”
The WorkplaceRelationsCommission states “for her the message was clear; the landlord wanted couples only and she, as a single mother, had no chance of getting the apartment; the email was a ‘firm no’”. **


#859

Does this ruling apply to single men who are turned down on the grounds that the land lord would prefer to rent to a couple?

The Equal Status Act:

The EA did not say, we will not rent to you because you because you are a single mother.

The EA said we will not rent to you because you are not a couple. Are you no longer permitted to say this?


#860

The agent discriminated on the grounds of family status, and he put it in writing. This opens the floodgates for anyone who is refused accommodation from a private vendor.


#861

I guess the issue is that people say “I’m a single mother/woman/professional” and then have someone else move in.

I know someone who was renting out his city centre 1 bed and was favourably disposed to helping someone out (felt too guilty to charge obscene market rents) - a woman sent a plaintive email going on about being a single parent but on her Facebook profile the kid’s Dad was present and appeared rather unsavoury from his own profile


#862

IMO this judgement will materially worsen the lives of tenents:

  1. EA will not under any circumstances respond to wouldbe tenant’s emails or phonecalls other than to inform somebody they have been selected, by a secret undisclosed formula, devised by the landlord, that they are the chosen ones.

  2. Wouldbe tenants, who will never be offered the unit will be allowed to waste their time at multiple viewings.