Build to let developments - good planning?

ohlordy

There seems to be a large increase in the number of build to rent apartment schemes in the pipeline. Many of these are within existing developed areas and will just become a part of the overall housing type/tenure mix in these areas.

Others are planned for whole swathes of greenfield lands and are almost the only tenure type planned for these areas (or large portions of these areas).

Eg Cherrywood and Clongriffin
https://www.independent.ie/business/personal-finance/property-mortgages/thousands-of-new-homes-in-scheme-but-none-for-sale-37614731.html
https://www.independent.ie/business/irish/gannon-unveils-plans-for-1537-dublin-apartments-37646940.html

The provision of housing units is undoubtedly a good thing, but is an over-concentration of build-to-rents within one area a good thing?
Will this question be considered by planning authorities when deciding on these applications?

Gumbo

There’s loads of them shooting up across the city currently

ohlordy

There are, they are currently an attractive investment proposition for investors due to rent levels.

In and of itself, a building of 200 apartments all managed and let by one institution is not a cause for concern in my opinion.

But I do question the wisdom of creating new towns where a high percentage of properties are never to be sold on the open market, and thus the number of owner occupiers is guaranteed to be virtually nil. Is this good planning from the point of view of creating a viable and sustainable and settled community?

Wabbit Ears

if these were long term rents then sure, it would be a very sustainable and settled community. The lack of a community in that sense is a problem caused by the volatile nature of the accidental landlord rental sector.

ohlordy

Wabbit Ears wrote: »

if these were long term rents then sure, it would be a very sustainable and settled community. The lack of a community in that sense is a problem caused by the volatile nature of the accidental landlord rental sector.

I agree.
In the Irish context though I think that is a very big IF.
Will a tradition of long-term rentals develop because landlords are institutional in nature?
Should the planning process be taking this into account?
Will the process feel under political/societal pressure to grant permissions?

Qrt

Good in the sense that they’re higher density and more sustainable environtally.

Bad in the sense that it just continues their exploitation of the regular person, given that the massive influence and power yielded by these institutions will likely dictate the future market in general, high transience will lead to fractious communities and a lack of any form of community pride. Possibly, in the future, the developments can be taken over by co-ops or HAs, but it definitely won’t happen under any sort of Fine Gael type of government.

IMO they will add to the rental supply, but they won’t bring down rents (due to aforementioned market influence)

The Student

Qrt wrote: »

Good in the sense that they’re higher density and more sustainable environtally.

Bad in the sense that it just continues their exploitation of the regular person, given that the massive influence and power yielded by these institutions will likely dictate the future market in general, high transience will lead to fractious communities and a lack of any form of community pride. Possibly, in the future, the developments can be taken over by co-ops or HAs, but it definitely won’t happen under any sort of Fine Gael type of government.

IMO they will add to the rental supply, but they won’t bring down rents (due to aforementioned market influence)

The Govt don't want to house people via the State ownership of properties because they have the costs of maintenance, risk of non payment of rent and evicting people from property is nigh on impossible.

There is no reason why a community can't be established if they are long term rentals, look at the majority of council estates where families have lived for 20 or 30 yrs.

What the above will ensure is that properties will meet the requirements of the tenants and remove the concept of staying in the same property when it becomes to big for you and your family have grown up and left.

Tenants will be charged a rent based on the property and not the current differential rents.

Staying in a property for life will only happen if (a) you purchase the property or (b) you pay the rent based on the property and not on a differential basis.

PhoenixParker

I think they're great for adding long term stability to the market. I'd prefer if it was on a low or no profit basis by housing trusts rather than investment led.

A key part of the long term solution to Ireland's housing crisis is to vastly reduce the developer led element of the market. That leads to boom & bust and cycles of desperation where crappy small properties can be built and sold.

ohlordy

Qrt wrote: »

Good in the sense that they’re higher density and more sustainable environtally.

They are no more higher density than an equivalent apartment building that is sold to individual owner occupiers and investors.

I largely agree with your other points.
My question remains; will the planning process take a similar view and refuse an over-concentration of build-to-rents in one area?
It has become accepted wisdom that concentrating social housing in one area has a negative societal effect. Will the planning system prevent us having to learn by error when it comes to build-to-rent over concentration also?

The situation in Clongriffin isn't clearly stated in the article linked above. While there are to be 1537 apartments total, and it states that 1324 are to be build to rent, it doesn't state that the other 213 are to be handed to an AHB for social housing purposes. None of the 1537 will be for sale.

ohlordy

PhoenixParker wrote: »

I think they're great for adding long term stability to the market. I'd prefer if it was on a low or no profit basis by housing trusts rather than investment led.

I agree that they could add long-term stability to the rental market. But not necessarily long-term leases. Not necessarily settled long-term residents.

They are being built not due to a societal demand for this type of housing model, but because the state in it's laissez-faire attitude to residential construction is willing to allow institutions and institutional investors build the housing type that they believe will generate the most profit, not what will generate the best societal impact

The Student

ohlordy wrote: »

They are no more higher density than an equivalent apartment building that is sold to individual owner occupiers and investors.

I largely agree with your other points.
My question remains; will the planning process take a similar view and refuse an over-concentration of build-to-rents in one area?
It has become accepted wisdom that concentrating social housing in one area has a negative societal effect. Will the planning system prevent us having to learn by error when it comes to build-to-rent over concentration also?

The situation in Clongriffin isn't clearly stated in the article linked above. While there are to be 1537 apartments total, and it states that 1324 are to be build to rent, it doesn't state that the other 213 are to be handed to an AHB for social housing purposes. None of the 1537 will be for sale.

One of the reasons we had negative societal issues with social housing was the States unwillingness to deal with the anti social issues. I doubt these institutions will tolerate these issues. It should be noted that 99.9% of people in social housing are the nicest and most genuine people you would ever meet. It is just that .1% that ruins an area.

This will be a pure and simple business transaction. If an area runs the risk of getting a "bad name" it will affect the rents that could be charged and as such the return for the investor.

ohlordy

The Student wrote: »

One of the reasons we had negative societal issues with social housing was the States unwillingness to deal with the anti social issues. I doubt these institutions will tolerate these issues. It should be noted that 99.9% of people in social housing are the nicest and most genuine people you would ever meet. It is just that .1% that ruins an area.

This will be a pure and simple business transaction. If an area runs the risk of getting a "bad name" it will affect the rents that could be charged and as such the return for the investor.

The question I am asking has zero to do with anti-social issues within social housing estates. It is about the potential to develop a settled community within a new town if a high proportion of units in the town are rental only and, without a tradition of long term renting, will likely mean many residents will only be temporary.

The social housing elements of the plan are the most likely to have settled tenants who assist in creating a settled community

The Student

ohlordy wrote: »

The question I am asking has zero to do with anti-social issues within social housing estates. It is about the potential to develop a settled community within a new town if a high proportion of units in the town are rental only and, without a tradition of long term renting, will likely mean many residents will only be temporary.

The social housing elements of the plan are the most likely to have settled tenants who assist in creating a settled community

The main societal issue in social areas is anti social behavior. All other societal issues in social areas are the same in all other areas be they private or affordable housing.

The settling of a community occurs when residents feel safe and comfortable in their environment. There is no reason why long term rentals can't have a community feel. Long term rental just means you don't own the property. Just because people purchase their properties does not mean they will never sell them.

A community is made by the people in the community, not the status of the people living there be they renters or owners.

ohlordy

The Student wrote: »

There is no reason why long term rentals can't have a community feel.

A community is made by the people in the community, not the status of the people living there be they renters or owners.

This is the crux of the issue. Irish people do not have a tradition of long-term renting, particularly apartment renting. Apartments often have high turnover of tenants, people moving on after a year or two.
The community in 2020 may consist of an entirely different set of people to the community in 2023, and this is where the problem may lie

Colonel Claptrap

You stand a better chance of leasing long term from one of these developments than you do renting from Dave, an accidental landlord, who bought during the boom and will sell the instant he exits negative equity.

Small time landlords are not conducive to long term leases imo. All it takes is a lost job, breakdown of marriage, change of circumstances on behalf of the landlord, before he decides to kick you out and sell.

I rented for 3 years from an institutional landlord and found them fair, consistent and most of all - they knew how to run a business. I would have happily rented from them for 10 years +.

I've also rented from oddball 1 property landlords who called in unannounced when I wasn't there, demanded to see uncensored bank statements, threatened me with the INLA, and came onto my girlfriend.

If an institutional landlord goes bust, the entire apartment block gets sold to another insituation who must accept your current lease. Build to rent properties provide much needed certainty to the rental market.

As long as they don't own every apartment block in an area, competition should remain healthy.

ohlordy

@colonel I don't disagree with anything you say there, but just because it will be easier to get a long-term tenancy from an institutional landlord doesn't mean that people will want to take long-term tenancies, nor see themselves as long-term residents of an area

referring back to the plan for Clongriffin as linked above: if 1324 apartments are to be built, would a better mix be provided by allowing half of those be sold and thus guaranteeing at least some residents would be long-term (as owner-occupiers)?

jam_mac_jam

I don’t see what the difference between long term lettings and people buying is. What is the difference? A person in an apartment can sell after four or five years anyway.

Plenty of people would take long term lettings if it was offered. I have rented places for a number of years as have family members and friends. Its much more preferable to have professional landlords and institutions doing this rather than small time landlords who in some cases (not all) don’t have a clue what they are doing and there is no protection for your deposit. For renters who pay their rent and behave themselves and pay their rent it would be much preferable.

Mrs OBumble

ohlordy wrote: »

The community in 2020 may consist of an entirely different set of people to the community in 2023, and this is where the problem may lie

Why, exactly, is that a problem?

ohlordy

jam_mac_jam wrote: »

I don’t see what the difference between long term lettings and people buying is. What is the difference? A person in an apartment can sell after four or five years anyway.

Plenty of people would take long term lettings if it was offered. I have rented places for a number of years as have family members and friends. Its much more preferable to have professional landlords and institutions doing this rather than small time landlords who in some cases (not all) don’t have a clue what they are doing and there is no protection for your deposit. For renters who pay their rent and behave themselves and pay their rent it would be much preferable.

I agree that there is not a difference between long-term renting and people buying. I'm not as confident as you that history will be overturned quickly and we will become a nation of long-term renters though.

My worry is that if I am right about that, and a whole new town is built with a high percentage of residential units all being rented only but very few stay more than a handful of years, how will that impact the creation of a viable community?
I might be wrong, it would be better for the country as a whole if I am, but is it right to undertake a large-scale social experiment when the planning system could make it a small-scale experiment?

According to an SCSI document I just found https://www.scsi.ie/documents/get_lob?id=216&field=file the average tenancy in Netherlands is 11-13 years, in Ireland 18 months. That is quite a gap that needs narrowing

RayCun

ohlordy wrote: »

if 1324 apartments are to be built, would a better mix be provided by allowing half of those be sold and thus guaranteeing at least some residents would be long-term (as owner-occupiers)?

How are you going to require the people who buy these apartments to be owner-occupiers?

ohlordy

Mrs OBumble wrote: »

Why, exactly, is that a problem?

I think that if people don't see the place that they live in as a place they will be living in for a considerable period of time, that they will not involve themselves in the growth of a community in that place. Maybe I'm wrong, and no doubt I'm generalising to some extent

I think a sense of community is important for an area, and it doesn't appear on it's own as if by magic, it develops thru the efforts of the residents

Colonel Claptrap

Mrs OBumble wrote: »

Why, exactly, is that a problem?

I wouldn't call it a problem as such. But people like to see their neighbours invested in an area.

Why bother set up a community garden or allotment if people arn't around each year to plant and harvest?

Why bother encouraging your child to play with the kid next door, if he'll likely be gone next year.

I trust my neighbours to mind my house while I'm away on holiday. When I lived in an apartment, my neighbour changed 3 times and we barely spoke in the lift.

A man on my street picks up litter in the area every weekend. He has done it for 20 years and hates to see the area going downhill. Would you care as much if you only rented for a year?

ohlordy

RayCun wrote: »

How are you going to require the people who buy these apartments to be owner-occupiers?

I'm not suggesting that is desirable or can be done, I'm saying that if 600 apartments are offered for sale on the open market that without a doubt a portion of them will be bought by people who will want to live in them

jam_mac_jam

ohlordy wrote: »

I agree that there is not a difference between long-term renting and people buying. I'm not as confident as you that history will be overturned quickly and we will become a nation of long-term renters though.

My worry is that if I am right about that, and a whole new town is built with a high percentage of residential units all being rented only but very few stay more than a handful of years, how will that impact the creation of a viable community?
I might be wrong, it would be better for the country as a whole if I am, but is it right to undertake a large-scale social experiment when the planning system could make it a small-scale experiment?

According to an SCSI document I just found https://www.scsi.ie/documents/get_lob?id=216&field=file the average tenancy in Netherlands is 11-13 years, in Ireland 18 months. That is quite a gap that needs narrowing

Maybe this will promote long term lets. or possibly improve the situation. I am not really sure what you are worried about.
Institutional investors are going to have good vetting systems for tenants and are likely to engage properly with tenants. I am not really sure what the big deal is if somebody rents for a two years or four if they are not causing any problems.
I am also not sure what the point is about the Netherlands, Irish people don't on average rent for a long time which means that none will want to.

RayCun

ohlordy wrote: »

I'm not suggesting that is desirable or can be done, I'm saying that if 600 apartments are offered for sale on the open market that without a doubt a portion of them will be bought by people who will want to live in them

Yeah, but I'd guess a larger proportion will be bought to let. So maybe 20% of the residents end up being owner-occupiers (and some of those will move within 5-10 years anyway).

i think it would be more useful to look at how to increase the length of tenancies.

The Student

ohlordy wrote: »

I think that if people don't see the place that they live in as a place they will be living in for a considerable period of time, that they will not involve themselves in the growth of a community in that place. Maybe I'm wrong, and no doubt I'm generalising to some extent

I think a sense of community is important for an area, and it doesn't appear on it's own as if by magic, it develops thru the efforts of the residents

There is no reason why people won't live in one of these properties for the long term assuming they pay rent. The same argument can be used with people purchasing there own property once they pay their mortgage.

People come and go both in rented property and owned property.

ohlordy

jam_mac_jam wrote: »

Maybe this will promote long term lets. or possibly improve the situation.

Maybe, Possibly. Within those words lies my issue.
The country, and Dublin in particular, needs more residential construction badly.
Because the construction sector is being guided by capital chasing investment and profit, build-to-rents are currently popular investment choices. They are and will be an important part of the housing mix.
My issue is that in order for a town of build-to-lets to become a community longer-term tenancies will need to be the norm, and thus far they are not.
If the growth of build-to-lets was due to governmental policy that was using them to incentivise long-term leases and the positive benefits that would bring then I would have a different view.
But it is not being driven by gov policy, and the other policy actions that could be undertaken as part of an incentivisation are not happening. Hence my scepticism and my desire to avoid whole towns of build-to-lets

Qrt

The Student wrote: »

The Govt don't want to house people via the State ownership of properties because they have the costs of maintenance, risk of non payment of rent and evicting people from property is nigh on impossible.

There is no reason why a community can't be established if they are long term rentals, look at the majority of council estates where families have lived for 20 or 30 yrs.

What the above will ensure is that properties will meet the requirements of the tenants and remove the concept of staying in the same property when it becomes to big for you and your family have grown up and left.

Tenants will be charged a rent based on the property and not the current differential rents.

Staying in a property for life will only happen if (a) you purchase the property or (b) you pay the rent based on the property and not on a differential basis.

Staying in properties for life is an awful wasteful concept. Once there’s a varied housing stock, there shouldn’t be a problem with differential rents. I haven’t studied it in-depth but we should really try to emulate the models of Vienna etc, but that’s a bit off topic.

The long-term rental thing is important. Just because you’ve lived in a property for twenty years, it’s not going to be a long-term rental unless you have a definite and defined long term lease. If you’re just renting year by year and just happen to be there twenty years, it creates a very different attitude.

ohlordy

The Student wrote: »

There is no reason why people won't live in one of these properties for the long term assuming they pay rent.

There is no reason people don't stay in current rentals for the long-term as long as they pay their rent. There is no law requiring tenancies be short, but there is no tradition of either signing longer ones or continually rolling leases over

The Student

ohlordy wrote: »

There is no reason people don't stay in current rentals for the long-term as long as they pay their rent. There is no law requiring tenancies be short, but there is no tradition of either signing longer ones or continually rolling leases over

Tenants automatically have a right to stay in rental properties for 6 yrs once they have been in them for 6 months.

There are only two reasons why people have to leave properties, (1) if its being sold (2) if its needed for a relative of the owner.

If a property is refurbished the most recent tenant is given first refusal to rent it.

If anything renters in RPZ have better protection than property owners who are at the mercy of increasing interest rates. If your mortgage interest rate goes up and you can't pay it then you lose your home. At least with RPZ the max the rent can go up is 4% so at least the tenants have some certainty.

ohlordy

The Student wrote: »

Tenants automatically have a right to stay in rental properties for 6 yrs once they have been in them for 6 months.

There are only two reasons why people have to leave properties, (1) if its being sold (2) if its needed for a relative of the owner.

If a property is refurbished the most recent tenant is given first refusal to rent it.

If anything renters in RPZ have better protection than property owners who are at the mercy of increasing interest rates. If your mortgage interest rate goes up and you can't pay it then you lose your home. At least with RPZ the max the rent can go up is 4% so at least the tenants have some certainty.

The right to remain in a tenancy is not under discussion.
This is not about being able to stay for a long time, it is about the fact that people do not currently stay, the average duration being 18 months

The Student

ohlordy wrote: »

The right to remain in a tenancy is not under discussion.
This is not about being able to stay for a long time, it is about the fact that people do not currently stay, the average duration being 18 months

I suspect the reason people don't stay for long is because we have a relatively new rental market, it is a cultural shift for people to think of rental as a long term housing solution.

Continental Europe have longer average tenancies because renting is a cultural norm, the rental sector is more mature as it has been in operation a lot longer than it has in Ireland.

We still have the idea that everybody should have a three bed semi. We don't even want to accept living and raising families in apartments let alone that people may have to rent for life. We seem to see the apartments as a transition to a three bed semi and a "home for life".

mdebets

ohlordy wrote: »

The question I am asking has zero to do with anti-social issues within social housing estates. It is about the potential to develop a settled community within a new town if a high proportion of units in the town are rental only and, without a tradition of long term renting, will likely mean many residents will only be temporary.

But you also have no tradition of long term apartment living either, so everyone who buys an aprtment today as owner occupier, will most likely renting out this apartment in a few years time, because he has moved on.

mdebets

The Student wrote: »

I suspect the reason people don't stay for long is because we have a relatively new rental market, it is a cultural shift for people to think of rental as a long term housing solution.

Continental Europe have longer average tenancies because renting is a cultural norm, the rental sector is more mature as it has been in operation a lot longer than it has in Ireland.

But if you want to emulate the renting sector from Continental Europe, you need more than just a cultural shift.
You need apartments with proper sound insulation and more storage room.
A tenant needs to be allowed to redecorate the apartment (painting walls in the colour you like, putting nails into walls, etc).
And you need to make the legislation more tenant-friendly. You need to get rid of the part 4 break clause after 6 years. Part 4 should be of indefinite length, with the existing break.clauses. You need to give tenants the right to reduce the rent, if the landlord does nöt perform his duties (like fast repairs). The right of a LL to evict a tenant for renovations should also be more tightly controlled, so that it can't be used to evict a tenant, the landlord just want to get rid of.

The Student

mdebets wrote: »

But if you want to emulate the renting sector from Continental Europe, you need more than just a cultural shift.
You need apartments with proper sound insulation and more storage room.
A tenant needs to be allowed to redecorate the apartment (painting walls in the colour you like, putting nails into walls, etc).
And you need to make the legislation more tenant-friendly. You need to get rid of the part 4 break clause after 6 years. Part 4 should be of indefinite length, with the existing break.clauses. You need to give tenants the right to reduce the rent, if the landlord does nöt perform his duties (like fast repairs). The right of a LL to evict a tenant for renovations should also be more tightly controlled, so that it can't be used to evict a tenant, the landlord just want to get rid of.

You will get these as the number of build to rent increase. You can't force a small landlord to follow this model.