Can Irish CRE Really Accommodate 200,000 Ukrainian Refugees?
Like other European Union members, Ireland has opened its doors to refugees seeking sanctuary, but with an acute housing shortage already stoking domestic tensions, how can the island nation accommodate the estimated 200,000 who may flock there?
Speaking at Bisnow’s State of the Market event in Dublin in late March, Trinity College Dublin associate professor of economics Ronan Lyons noted that the Russia-Ukranian War will continue to exacerbate higher costs from rising inflation and smoldering economic disruptions.
"When we look at what the [real estate] prospects were for 2022 and 2023 — if there was no war in Ukraine versus the scenario that we have [now] — I think without the war you would have seen a pressure and cost on supply chains," Lyons said. "People were expecting [the sector] to ease back a little bit [on development].
"I think it will get worse. I think it will be more disruption in supply."
Lyons' said that even if the war in Ukraine is not drawn out, the longer things are left unresolved, the longer refugees will stay and lay deeper roots in Ireland.
His comments come after Ireland’s minister for agriculture, Charlie McConalogue, stated in March that the upper estimates of those arriving may reach 200,000. The United Nations has estimated that 4.3 million people have sought refuge outside Ukraine, and a further 6 million have been displaced within the country due to the Russian invasion.
"It is an unexpected demand shock," Lyons said.
The strain is beginning to show. According to the Irish Times, some families have begun returning refugees, stating that they are unable to cope.
The Irish Examiner reported that Taoiseach Micheál Martin said that some families may be accommodated in tents at Gormanstown Camp in County Meath in the short term.
"I think capacity will be a big issue if the numbers of Ukrainians that we expect will take refuge in Ireland continues to increase," Hunt said. "It’s a huge challenge."
She said the Irish government is already struggling to deliver the 35,000 houses annually that it promised under the Housing for All report and the emerging refugee crisis should spur lawmakers to fast-track their agenda.
With a capacity squeeze and limited options for new-build homes in the near future, one possibility for solving the refugee crisis may be to utilise Ireland's large number of vacant homes.
Ireland has one of the highest vacant home rates in the developed world, with over 9% of homes in the country sitting idle. The government stated last year that it intended to introduce a vacant property tax "as early as possible."
According to data consultancy Geo Directory, there were 90,158 vacant residential buildings as of Q4 2021, a vacancy rate of 4.4%. The latest report also found that there were 22,096 derelict residential addresses as of December 2021. The figure has fallen by approximately 7.3% over five years.
Other studies have put the figures far higher, at closer to 9% of all residential stock, or 183,000 homes both derelict and vacant in the country.
Putting homes to good use will take further funding and time.
The Irish government's response to the Ukraine crisis is being coordinated by the Department of Children, Equality, Disability, Integration and Youth.
When reached by Bisnow, the government declined to answer specific questions about how and where it is looking to house Ukrainian refugees.
However, the Irish government provided a statement to Bisnow and said that to date more than 10,000 of those fleeing the conflict in Ukraine who have arrived in Ireland had been referred to the International Protection Accommodation Service for accommodation.
The government said it is committed to welcoming people fleeing the war in Ukraine and is contracting housing accommodations across the country as the need arises.
"At present, it is not possible to provide a breakdown on numbers as these are constantly changing depending on the number of arrivals from Ukraine arriving into the country on a daily basis,” the statement says.
Many refugees are now in hotels, and although the Irish government is making headway in placing people in long-term housing, tensions between the government and the hotel sector are beginning to surface.
Speaking to the RTE Radio 1's Morning Ireland on the crisis in late March, Elaina Fitzgerald Kane, outgoing president of the Irish Hotels Federation, said that there had been efforts at both national and local levels to alleviate the crisis. However, she warned that hotels were "not a longer-term option”.
After being contacted by Bisnow the IHF said in a statement that the hotel sector was working closely with the Irish government to support Ukrainian refugees, but that much work remains to find permanent solutions to the demand.
"The IHF has been engaging with the Government to communicate its accommodation requirements to hotels and guesthouses, and we understand that there has been a very positive response from across the sector," the statement says. "Participation is a matter for each individual hotel or guesthouse, with all arrangements handled directly between the Government and businesses involved."