Economy Watch: The view from Dublin
Dublin must rise up. One of the obvious conclusions to the rental conundrum in the Republic is that Dublin city is too low. It’s too flat. If you ever get the chance to go up the Gravity Bar in the Guinness Storehouse, you’ll notice the views out over the city are lovely, but the city it is not high enough.
It should be taller. We need much more high-rise buildings because this is one of the few ways that we can reduce the costs of building — by building more high-rise apartments.
We can designate certain areas for taller buildings in order to preserve the cityscape and avoid having incongruous skyscrapers dwarfing older Victorian and Georgian parts of the city.
But, whatever way you look at it, up the city has to go.
The reason is simple. The housing market and the market for accommodation in general is highly dysfunctional in Ireland and this will have dreadful ramifications for the economy and the society if we don’t sort it out.
Rents are heading upwards in all our urban centres and for many thousands of people, living in Ireland is becoming just too expensive.
At the core of the problem is the cost of building houses. Strange as it may sound, although unemployment is still high, the industry indicates that the cost of building houses is extortionate.
If this is the case, the city has to go up to reduce the cost of building. There is not other solution. And it’s not just Dublin that will have to go up, Cork and Galway will have to rise also.
We see this dysfunction in the housing market in the rental market. The rental market is the outward manifestation of inner problems. It is the consequence, not the cause, of our accommodation problems.
The normal ‘first-time buyer’ is being squeezed out of the market by cash buyers and also by the central bank’s more stringent rules on lending. This is pushing these people into the rental market, pushing up demand, whereas in the past, they would have had their own house, paying mortgages not rents.
So we need to build new houses. The builders say that given wages and cost, they can’t build enough cheap houses.
If this is the case, they will have to build up to reduce costs. It’s really that simple.
Every city does it eventually. Why not Dublin? If you drive to Belfast and come into the city on the motorway towards the Titanic Quarter, you will see lots of high-rise, new office and residential buildings. This is the way to go. It’s time for us to look to the sky.