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TRANSPORT AND HOUSING IMPEDE GROWTH PROSPECTS
ROUNDTABLE DISCUSSION:
TRANSPORT AND HOUSING IMPEDE GROWTH PROSPECTS
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In the Fingal Business Sentiment Survey 2022 staff retention and recruitment was identified as the single biggest challenge facing business in the next 12 months by 40% of the respondents – a response four times higher than for any other single issue. On a closely related question, the respondents identified housing availability as the second biggest issue for Fingal’s competitiveness in the next 12 months. We asked two senior figures in food production about the impact of housing on recruitment and how they think the issue might be addressed.
Michael Hoey, Managing Director of Country Crest says: “It’s a major problem for us. Because of the cost of rent and houses in this area we have ended up subsidizing rents and renting houses, trying to make it more affordable for the people to come here to work. It’s not something we ever wanted to be involved in but we were left with no choice. In the last few weeks things have been a little easier, because our labour tends to be seasonal. During the winter months people come in off building sites and work for us. But as soon as the weather picks up in April many will be away again and we literally cannot compete with the rates that are being paid on building sites. So for anybody in food production that’s a major problem.
“The other big problem for us is that the supermarkets and the government are trying to keep a lid on food inflation at a time when all our input costs are rising sharply. Ingredients, gas and electricity, road transport, ferries, container transport – everything is rising on a daily basis. So it’s a difficult time for us and the horrible Ukrainian war is going to have a huge effect as well.”
William Keeling, Property Director of Keelings Group, says: “It’s always been important to Keelings to recruit, develop and look after the best people, so staff recruitment, development and retention is a key priority for us. However, one of our biggest challenges in recent years has been recruitment in operational roles. This is primarily due to two issues – the lack of public transport access to our site and the limited availability of suitable, affordable accommodation in the area.
“Due to the high costs of rent in the area, our employees are having to live further and further away from Dublin/Fingal in order to find suitable accommodation that’s affordable. A large percentage of the people that apply to work with us then find they cannot take up an employment role due to the lack of public transport to our location. Year on year it is proving more difficult to recruit people into these operational roles due to these issues, which is huge impediment in our ability to operate our business successfully and achieve growth.”
“To stimulate construction the Government could consider reducing taxation for the construction industry for a period of time where it is providing targeted residential accommodation,” William Keeling suggests.
“There should be a national and local review of infrastructure and services to support these targeted residential accommodation requirements to ensure the required services will be in place for key developments that improve the availability of accommodation required. The implementation of an infrastructural plan is a fundamental requirement. In Fingal, additional zoning of land should be explored as there are substantial areas of residential zoned land that will not deliver housing in the next Development Plan or even the one after that.”
Michael Hoey agrees that something has to be done. “The biggest problem is that young people can’t get on the mortgage ladder,” he says. “There’s a huge barrier in that the savings they have to have as a deposit is way too high. And you now have young couples trying to rent houses at close to double, in some instances, what they would be paying for a mortgage. So they’re spending years trapped in the rental market when they would be much better off if they could obtain a mortgage. The legislation is wrong on this and the Central Bank rules need to be eased in some way. Taxation should also be structured in a way that helps young people to get onto the housing ladder.”
“I think local authorities are buying up lots of houses at the minute but they’re actually competing with first time buyers and driving ownership further out of their reach,” says Michael Hoey. “It really is a vicious circle. We’ve had two couples recently buy new houses beside us. They paid what I’d regard as crazy money for them – and that was because in both cases they were competing against Fingal County Council. I know the Council is trying to do its best but there’s such a severe shortage of houses.
“One of those couples was paying €1,680 a month rent for a house. And when they eventually got their mortgage through on their new house its costing them €1,120 a month. So they’re going to save over €500 euros a month and will own their home at the end of it; renting just does not make sense.
“Local authorities used to build their own new housing and that is what they should be doing now. They have plenty of land that’s already zoned and ready to be developed but they just don’t seem to have the appetite to do it.
William Keeling suggests that local authorities should be given extra resources to deal with residential planning applications, provision of services for residential development and compliances and postplanning issues. “Long term, the local authorities should also be better resourced to build and maintain their own housing requirements rather than be overly reliant on the private sector. This should, in theory at least, drive down the cost of construction and also provide for a more sustainable provision of social housing. However, in the short-term setting this up is a significant and costly issue and is somewhat beyond the control of the local authorities, which would be competing with the private sector for staff and contractors.”
