This Government is banning co-living developments.
Following a report from the Department of Housing on co-living developments and their place in the market, the Minister has decided to amend Planning Guidelines to restrict all future commercial co-living development in Ireland. (Full press release here.)
Co-living: a solution for the wrong problem
The Government's decision has been criticised in some quarters, as there's a perception that co-living units could help ease the housing crisis. I don't agree. We are short of affordable 1- and 2-bedroom units for long-term occupancy, and co-living developments are not an acceptable substitute.
The fear for that lots of new co-living would create a new 'floor' in the rental market: small units, high priced, without tenant protections. That project pipeline has now been shut off to developers.
- Protections for renters are already too weak, but co-living residents will be even more precarious. The relationship between a co-living management company and its residents is more like a hotel and its guests than a landlord and their tenants.
- Much has been made of the shared kitchen facilities in co-living developments. This is clearly unsuitable for a building full of tenants cooking most of their meals themselves - and even more so in the context of social distancing.
- Co-living is not entering the market at an affordable price-point, which is where the undersupply exists.
There probably is a market for something like co-living, but it's tiny. The Department of Housing's report, which laid out the case for co-living, pointed to successful schemes in London and Manchester. These were built in partnership with large corporations whose employees were expected to be part of the target audience: well paid IT professionals looking for serviced apartments in the city for 3-6 month stays. 20 residents to a kitchen isn't so outlandish when there's a free canteen at work and you tend to eat out a lot.
Co-living is a problem if its existence (as a highly lucrative business model) means nothing else gets built, and so people who need proper flats are left with co-living longterm. The surge in applications for co-living since the model was first promoted seems to be a key factor in convincing the Minister that it's time to shut off the pipeline of co-living projects. Of the dozens of planning applications received for co-living, it's expected that many developments will return to the planners' desks - repurposed as standard apartments for long-term occupancy (rental or purchase.)
Affordable purchase is the Minister's current focus, but affordable rental should also be a secure long-term option for tenants. Co-living doesn't offer that. This ban is a step in the right direction - but many more are needed from here.