Build toRent(BTR) - issues

What is Build-to-Rent?

- Simply put, Build-to-Rent is purpose-built rental housing.

- They are a real estate model where an investor buys a number of houses / apartments within a neighbourhood with the intention of renting them and having them professionally managed.

- Build-to-Rent began as an opportunity for institutional investors to capitalize on the rising housing costs as these models are aimed at those who are temporarily unable to own a home, get a mortgage, etc.

- Build to Rent schemes are promoted as “rental stock shortage solutions” and are described as “assets” in terms of investment.

- As investments, they are described as a defensive asset class because they are resilient, have low volatility and are considered counter-cyclical stocks.

- This simply means their values rise during economic downturns or recessions and underperform during periods of economic expansion which makes them very attractive.

What does Build-to-Rent look like in Ireland?

- In 2018, The Department of Housing released a document called “Design Standards for New Apartments”

- This document introduces the “Build-to-Rent” sector which is subject to:

  1. Centralised management on specific long-term basis
  2. The principle that individual housing units may not be separately sold for a specified period.
  3. Provision of amenities for residents to allow “communal lifestyles

- The document describes the relevance of apartment living in meeting the challenges of housing for the growing population in key cities.

- Within this document the Dept. of Housing set out Specific Planning Policy Requirements which take precedence over conflicting policies and objectives of the development plans

- This means that certain SPPR’s that apply to Build-To-Rent allow these schemes not to follow the advice set out by the Department itself such as:

  1. Best Practice Guidelines, Quality Housing for Sustainable Communities
  2. Sustainable Residential Development in Urban Areas
  3. Design Manual for Urban Roads and Streets

What are the exact issues of the Build-to-Rent aspect at Holy Cross / Clonliffe College?

The design for this project is based on specific variations of BTR included in Specific Planning Policy Requirement 8 on pg. 30 of the Design Standards for New Apartments but to be brief they are as follows:

1. No restrictions on dwelling Mixes

  • This is why we see an excess of 70% of studios & 1-bed units in the scheme proposed for Clonliffe College Grounds

2. Flexibility in apartment storage & private amenity space

  • This constitutes a physical, measurable difference against apartments designed for sale
  • Units are less adequate for long-term living and allows the developer to build more units at a lower cost which is a profit-driven measure

3. Flexible ratio of Dual-aspect units

  • Lesser quality in units in terms of space, ventilation, less light, fire safety concerns)

4. Requirement for majority of apartments to exceed minimum floor areas does not apply

  • Normally having more apartments requires the developer to make the units 10% bigger which results in more competitive, higher quality units, in BTR units, this is not the case.

5. 12 Apartments to stair / lift core ratios does not apply

  • This results in hotel-style corridors decreasing the possibilities of social life in the scheme,
  • Inadequate increase in density
  • Design concerns in relation to natural light, ventilation & fire safety

6. Car parking is considered to be minimal

  • In principle, this could incentivise a more sustainable approach to urban life and while this can be an incentive for our city to become more connected by means public transit, bicycle or pedestrian mobility, the reality at this time is that from the units proposed, a higher number than expected could have private vehicles which, at least for some years, would bring pressure to the vehicular capacity of roads & parking of existing neighbourhoods.

7. Part V Agreements (Social / Affordable Housing) may be made:

  • Transfer of lands
  • Build and transfer up to 10% of proposed units
  • Transfer of housing units on any other land in the functional area of the planning authority
  • Lease housing units either on the site or in any other area within the functional area of the planning authority
  • Combination of the above
  • Combination of options not involving a transfer of ownership land
  • The above agreements are used in the Clonliffe College proposal to explain the segregation of these units into separate towers which may be bought & managed separately.

What are the potential risks of Build-to-Rent to our Built Environment & Social Life?

  1. The Quality outcomes from a planning and community perspective which are key objectives in relation to housing may not be achieved.
  2. We could see built environments treated first and foremost as investment vehicles
  3. Our built environment could change both in their physical form and their social life
  4. These buildings could exist simply to cater to a swelling number of wealthy investors instead of being solutions to community housing & amenity needs or the housing shortage in the wider national context.
  5. As described by Aidan Regan, contributor at the Washington Post “Our cities could become playgrounds for global capital where large Institutional Investors effectively become landlords of the City”
  6. Since there is no coordination between local authorities and no revenue-raising capacity to seriously invest in and improve local infrastructure these increased densities in existing communities could put additional pressure on existing infrastructure, including drainage, schools, hospitals, cultural centres, public space, green space, and transport etc.
  7. Our neighbourhoods could be less likely to become attractive places to raise families because in order to do that you need affordable, family friendly apartments within integrated urban communities. This requires larger apartments in smaller and less densely packed schemes.
  8. The increase of smaller rental units could make larger rental apartments more difficult to find which would be an incentive for larger apartments to increase in price.
  9. Similarly, the proliferation of rental schemes could make private ownership more difficult which could also incentivise private homes to increase in price.
  10. Ultimately, we could end up having two types of communities, those that live in homes with normal standards and those that don’t.