Housing crisis threatens Ireland’s businesses
Ireland’s housing crisis is a threat to residents as well as the multinationals located here. With so much demand for homes and so little supply, landlords hold all the cards and home-seekers are forced to pay exorbitant prices. Rents in Dublin are now higher than they were at the height of the boom, and the average per-monthly cost of an apartment within the capital is a whopping €1,312!
Things aren’t much better elsewhere in the country, and this full-blown disaster means that, “Ireland is fast becoming a country where skilled overseas professionals can no longer afford to live and work”. The current state of things could lead important multinationals to relocate to countries that can better accommodate them. But how serious is the situation and what does it mean for Ireland?
Are multinationals moving on?
In a recent article on the topic, the Irish Examiner explores the dilemma multinationals are finding themselves in. They want to “expand” and are “seeking to lure staff on secondment from other countries” but cannot do this because, “the major shortage of housing, coupled with soaring rents, is preventing job growth.”
This unfortunate position is (unsurprisingly) leading businesses to consider moving elsewhere. Dan Kiely, the Chief Executive of Cork-based multinational Voxpro, is just one of the many people frustrated with the present circumstances. He says: “We want to do the best for Cork and deliver as many jobs as we can in the next three years, but the housing situation will affect the numbers we employ…If we don’t tackle this, then businesses like Voxpro will be looking to places outside of Dublin and Cork.”
Irish Business and Employers’ Confederation (Ibec) has acknowledged the hardships encountered by companies when it comes to residential space. Peter Stafford, Director of Property Industry Ireland (an association within Ibec), echoes concern over the growing issue, stating, “Businesses are now finding that they can find spaces for workers to work in but they can’t find space for the workers to live in.”
Hungarian computer specialist Jabor Ringhoffer is a qualified overseas professional who has experienced the brunt of Ireland’s housing struggle. Jabor, his partner, and his son were evicted from their flat, located at the Eden complex in Blackrock, Cork. Their apartment was one of the 35 put up for sale by Eden’s receiver, Grant Thornton (we talk more about this here). Mr. Ringhoffer says that he knows of “skilled people” who would like to come and work in The Emerald Isle but “cannot afford to do so because of the house prices.” He explains that these eager workers aren’t coming here to take jobs from the Irish, rather they’re doing the work that natives “aren’t available to do.” He asks: “How many Irish people speak Hungarian, for instance?”
What we stand to lose
The potential emigration of multinationals will have a immense effect on Ireland. These companies provide an extensive list of benefits, perhaps most notably being the employment they offer. “Excluding the financial sector, there are about 1,000 US companies with operations in Ireland providing about 100,000 direct jobs,” the Irish Times writes. These companies give an incredible €11 billion every year in the form of wages to Irish employees, fixed capital investment within the country and corporation tax to the Exchequer. There’s also a plethora of other opportunities stemming from big businesses, such as “VAT and other taxes, indirect expenditure on security, logistics, catering, cleaning and other services, as well as thousands of agency workers used by the companies.”
The Irish Development Authority (IDA) reflects the above, reporting that, “One-in-five private sector workers in Ireland are now employed directly or indirectly by foreign multinationals.” Furthermore, they estimate that, “For every 10 jobs created by FDI, a further seven indirect jobs are generated in the wider economy.”
Where do we go from here?
With all that’s at stake, it’s imperative something be done to counteract the prevailing issue.
One such idea for improvement has been posited by Cork Chamber President, Barrie O’Connell, who says, “Establishing a minister for housing and infrastructure would ensure improved oversight and a more connected approach at central level.” O’Connell believes this appointment, or something to its effect, would be a “required” step that will, “address the rental and buyer crisis that currently presents a potential risk to our future economic development capacity.”
Whatever the solution, we’re hoping helpful steps are made soon.
What are your thoughts on the situation? What do you think needs to be done?
Image via irishtimes.com
