The Minister for Further and Higher Education James Lawless announced the government’s new strategy for student accommodation today (Tues) where he said 42,000 new beds for students will be built by 2035.
He later revealed that around 10,000 of those new beds will come from the “digs” style, Rent-a-Room scheme where people can rent out a room in their home with the income tax-free up to €14,000 per year.
In 2023, 16,580 taxpayers claimed the Rent-a-Room income exemption, but it’s not recorded whether the room is being rented to a student.
Minister Lawless said his department’s analysis suggests there are more digs rooms that can be “unlocked”.
He said the relief was “quite generous” and that it had been “very popular”, and added that he encouraged people to take up Voluntary Licensing Agreements to give some legal relationship between the student and the digs provider.
The Government‘s new strategy says there is currently a deficit of 15,000 beds in the student accommodation system, and a “projected requirement” of 42,000 student beds by 2035.
It said meeting these demands is “far in excess of the States funding capacity.”
Instead, the government will be relying on private sector funding and development and increased focus on Rent-a-Room accommodation.
Minister Lawless said the strategy is “unlocking state land” situated in higher education institutions that is currently “untapped” and 53 sites have been identified already.
President of Aontas na Mac Léinn in Éirinn (AMLÉ) Bryan O’Mahony said that if rent-a-room is being relied on for 10,000 new student beds, “we need actual protections for those living in digs.”
He said the AMLÉ – formerly the Union of Students in Ireland – welcomed any student accommodation being built, but said the strategy was “failing” by building private accommodation on state land, alongside a reliance on the rent-a-room scheme.
Minister Lawless said the new-build student accommodation will be done through a public private partnership-type (PPP) model.
“Where we make those public lands available to private sector investment under terms that include the land always remains in the possession of the State,” Minister Lawless said.
He said that colleges will have “nomination agreements” which will allow the institutions to specify how many beds they will take up on each development.
When asked if any controls will put in place to protect students from potential high rent charged by developers who will own the student accommodation built on public land, he pointed to recent rent reforms introduced by the government.
The reforms state that student accommodation rent can only be set to market rates every three years – for other tenancies landlords can do it any time a tenant leaves voluntarily.
The minister said it was “appropriate” to “use every lever at our disposal” given that there is “known private sector interest” and a situation where 15,000 beds with planning permission are not being delivered due to viability issues.
“The private sector has asked for some degree of certainty, or some degree of confidence that the viability challenges that they face can be overcome.
“We’re trying to promote supply, we’re trying to promote viability.”
Minister Lawless said the approach was an “innovative measure” to unlock “significant” State lands.
The Minister said there were no annual or geographical targets for the number of beds across the lifetime of the strategy.
He said it could be “unhelpful” to set yearly targets.
The scheme would be rolled out on a phased basis starting with Dublin, Cork and Galway, followed by Limerick, Waterford and Athlone and then other regions.
“We do have a number of inventions available to me as we role the model out if we need to engineer viability in particular locations.”