Real Estate Update: Co-living Homes – The Future for Urban Housing?
29 May 2019
The Sustainable Urban Housing Guidelines for Planning Authorities which issued last year addressed the potential for co-living developments in Ireland. Shared accommodation schemes already exist on a small scale in Dublin and have been used in other countries, including the UK, to optimise space in urban areas.
These shared accommodation developments, akin to student residences for adults, involve short-term accommodation. Residents are allocated private rooms with access to recreational facilities dedicated solely for use by residents. Professional managing agents deal with the day-to-day administration of the buildings and communal facilities in a similar manner to student accommodation.
What’s in it for developers?
The model is attractive to developers because co-living developments generally will not be subject to Part V obligations regarding social and affordable housing. This means that a developer will not be required to transfer a percentage of units within a development to the local authority. The Guidelines provide that the shared accommodation would not be suitable for social and affordable housing as they will not provide individual self-contained residential units. The Guidelines suggest that shared accommodation could be constructed within protected structures, ensuring their ‘long term rehabilitation’ while also dealing with a shortage in housing.
There have been concerns that these co-living homes would result in over-crowded urban accommodation. The Guidelines specify that the minimum bedroom size for a single en-suite room should be 12 m² while a double en-suite room should extend to at least 18 m². Although the Guidelines state that the shared accommodation units are to have a maximum occupancy of 8 people, they suggest that alternative formats, which could potentially result in increased occupancy, will be considered provided that adequate communal amenities and facilities are provided in the development. The Guidelines provide that the obligation is on the party proposing the shared accommodation scheme, being the developer, to provide evidence that the proposed development satisfies the accommodation requirements in a particular area.
Although the Guidelines suggest that the co-living model is more suitable for city centre locations, developments of this nature could be the future of short-term housing outside of the city centre. A recent planning application submitted to Dun-Laoghaire-Rathdown County Council for a strategic housing development proposed over 200 bed spaces in one development with communal facilities including kitchens, lounge areas, a kiosk and a gym.
Co-living developments are not intended to be a permanent solution for the housing shortage issue nor will they replace or deal with the need for more long-term accommodation. Provided that occupancy is kept at a reasonable level and the developments are operated and managed properly, these innovative formats could deal with the severe shortage of accommodation in urban areas, particularly for foreign workers or those moving to urban locations for the first time and in need of short to medium-term accommodation.
Developers contemplating future co-living projects should seek expert legal advice. For more information on the emergence of co-living developments in Ireland, contact a member of our Real Estate team.