Irish ban on co-living schemes may put pressure on housing supply

Housing minister Darragh O’Brien said following the publication of a report on co-living by the Department of Housing, he would amend the 2018 Planning Guidelines to restrict all future commercial co-living development in Ireland. The ban will prevent developers from making future applications for co-living schemes, but does not affect applications which have been granted or which were lodged with the local planning authority prior to this date.

The guidelines providing for co-living schemes in Ireland were introduced in 2018 in an effort to respond to the shortage of and growing demand for housing. Co-living comprises professionally managed rental accommodation where individual rooms are rented within an overall development with access to communal facilities. The aim was to alleviate pressure on the housing system and cater for a particular demographic niche.

Developers in Ireland embraced this new class of real estate asset and, according to the government report, as of 10 October 2020 there were 1,670 co-living units or beds already granted permission or in the planning system. A significant number of new applications were lodged prior to the introduction of the de facto ban.

O’Brien said he had significant concerns that co-living was moving away from the niche developments that had been proposed and that the number of applications and permissions were “comparatively high in the international context”.

The European context

The JLL European Co-Living Index 2019 predicts that the European co-living sector is set to grow from about 6,480 operational beds in 2019 to 20,400 by the end of 2021. The impact of the ban means that Ireland could be left behind as this emerging concept develops.

CBRE’s Europe co-living 2020 report describes co-living as offering “a blended solution of residential and flexible short stay accommodation”. It argues that co-living schemes create a “living experience as an active community”, as well as addressing some of the challenges faced by young people in an urban environment including loneliness and social exclusion.

The CBRE report analyses the economic, social and market trends giving rise to this new living environment across Europe, with a particular focus on London, Amsterdam, Berlin, Madrid, Milan and Vienna. CBRE’s findings indicate that, overall, the co-living concept was similar in all the cities studied, but with variations in room sizes, typologies and the local regulatory framework. London boasts the largest co-living market in Europe with around 22% of the total number of beds.

One of the main concerns noted by O’Brien leading to the ban in Ireland was that the location of a substantial number of the potential co-living sites was not in keeping with the high density urban centres originally envisaged and that inappropriate locations away from the core city centre were said to undermine the concept.

London combats this problem through a dedicated co-living planning policy, H16. This requires that the location must be accessible by walking, cycling or public transport and not contribute to car dependency.

As other cities provide the proof of concept showing the benefits to this new way of living, it may be said that Ireland was too quick to put a halt on co-living developments, and may fall short in meeting the anticipated demand.

Susan Kinlan of Pinsent Masons also contributed to this article