Neither Tracy Smullen nor Nicky Foley ever imagined they would become part-time landlords. After all, Smullen runs a chain of creches in Dublin and Kildare, while Foley runs a restaurant in Dingle.
Yet, because of the housing crisis that is exactly what they have become. Smullen and Foley have found that, to secure staff, they have also had to offer them a place to live.
It is the latest symptom of Ireland’s dysfunctional housing market: small and medium businesses are now forced to join in the increasingly crowded race to access the scarce supply of new houses or rental accommodation. While supply has increased in recent years, so too has the number of buyers.
The housing market is now seeing private companies compete with first-time buyers, families looking to rent, students seeking temporary accommodation, county councils trying to fill social housing lists, approved housing bodies buying social and affordable houses, and giant institutional investors bulk-buying houses in new estates.
All of which has significant implications not just for the increase in competition in the housing market, experts say, but also for the relationship between companies and their workers.
What began as a short term, stopgap solution turned into a long-term arrangement. Tracy Smullen’s business now leases five properties in Rathfarnham and two in Naas, all of which are permanently occupied by creche staff
Tracy Smullen runs a chain of creches with business partner Claire Doyle. For years, they hired a proportion of her staff from Spain, which has comparable childcare qualifications to Ireland’s. During and since the Covid pandemic, she found it more and more difficult to hire Spanish staff.
“Staff were saying: ‘Yes, we’ll come over, but only if you can get us accommodation,’” Smullen said.
So she looked at renting an apartment next to the creche on a short-term lease while workers looked for accommodation of their own. What began as a short term, stopgap solution turned into a long-term arrangement. Smullen’s business now leases five properties in Rathfarnham and two in Naas, all of which are permanently occupied by staff.
Without the accommodation, she said, they could face significant restrictions on how the business operates. Childcare is an essential service to many families and it’s heavily regulated, so it’s simply not possible to get short-term staff to cover absences or recruitment droughts. Quite often creches have to close rooms or turn away parents because of staff shortages.
For Co Kerry-based chef Nicky Foley, who owns Solas Tapas with his partner Ann Connell, having the apartment is vital to survive within the razor-sharp margins of the restaurant trade, a business that relies on retaining experienced staff.
“It’s vital for us in Dingle because there is such a lack of accommodation. A lot of what’s here is rented out to tourists,” he said.
The advantage is that it will allow him to keep existing staff and possibly hire new people, allowing him to open the restaurant for lunch during the week and for brunch on the weekends.
But this comes with risks, not least of which is that he will have to carry the cost of the apartment in winter when the restaurant is closed.
The gamble is that the ability to secure good kitchen and diningroom staff will result in extra income from longer opening hours.
“I don’t know how else we’re going to survive the market,” he said. “We will only know at the end of the year whether it has worked.”
Bigger companies than Smullen’s and Foley’s have been wading into the property market lately – most notably Ryanair, which bought 40 houses in an estate in Swords, north Co Dublin. The purchase was criticised by politicians and commentators who saw it in the same category as so-called vulture funds bulk-buying new houses in Balgriffin, north Dublin, earlier this year, or in Mullen Park in Maynooth in 2021.
‘I would apologise to nobody for it; our first job is to look after our passengers, and our second job is to look after our staff’
— Michael O'Leary, Ryanair chief executive, defending the company's practice of buying housing for staff
Michael O’Leary, Ryanair’s chief executive, defended the purchase in a typically combative radio interview when asked whether Ryanair had not simply done the same as the funds and “swooped in” to deprive first-time buyers of their chance of buying a home.
“I would apologise to nobody for it; our first job is to look after our passengers, and our second job is to look after our staff,” he told RTÉ presenter Claire Byrne on Wednesday.
He claimed the impact on the housing supply would effectively be neutral, since “there will be 40 other apartments and houses available elsewhere in Dublin this summer because Ryanair staff won’t be renting those properties”.
Ryanair is not the only company buying or building houses for staff. On Thursday Shannon-based Atlantic Aviation Group (AAG), an aircraft maintenance company, announced it had bought a vacant property in Sixmilebridge, Co Clare, to redevelop as residences for its workers. Several hotels have done the same: the Lake Hotel in Killarney and the Hogs Head Golf Club in Waterville have applied for planning for staff accommodation.
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Companies providing housing for workers is not a new phenomenon, according to Sarah Kieran, an associate professor in the work and employment studies at the University of Limerick.
As far back as the 19th century, companies such as Cadburys were building homes for their workers in Bourneville near Birmingham. In Ireland, the Guinness family’s legacy of providing homes for workers is still evident around Dublin, while Bord na Móna built hundreds of houses for families of its workers through the 1940s and 1950s.
What makes this moment different, according to Kieran, is that the decision by companies to buy or lease homes for workers comes during an acute housing crisis. In effect, they are not doing it out of choice but out of necessity, she said – and the move carries risk for workers.
“For workers, this becomes like the ultimate set of golden handcuffs in terms of tying people into companies, and in the most extreme examples it can potentially create an environment where exploitation can happen, even if you don’t set out to do it,” said Kieran.
Even where there isn’t exploitation – and in most cases there will not be – a company controlling an employee’s pay cheque and the roof over their head creates a profoundly asymmetric power relationship, she said, and one that really ought to be rebalanced in some way.
“Companies should have employee-focused policies around this kind of arrangement,” she said, and it should be made clear what will happen if the employee quits, or is let go, and what happens to their tenancy after that.
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“There should also be clear policies around the terms and conditions of this housing, highlighting the grey areas around employees’ voices, because they might feel they are compromising the roof over their heads if they agitate in the workplace or look for rights in other ways,” she said.
The practice of workers living in accommodation provided in some way by their employer is likely to increase, according to Lisa O’Reilly, a landlord living in Waterford. Her practice is almost exclusively built around buying and developing properties which are leased by companies for their workers.
O’Reilly said she began operating as a landlord in 2021 with a single property when she was approached by food and pharma companies keen to find housing for their workers.
In some cases the workers pay the rent directly, while in others, the company will pay and then deduct the rent from their workers’ wages.
Whichever structure they use, O’Reilly said that “companies are screaming out for housing”. She now has 15 properties with plans to seek permission to build a much larger co-living space in Tipperary.
[Reluctant landlord Tracy Smullen is] keenly aware that by taking up these apartments, she is potentially depriving other people who could have lived there. It’s not something that sits comfortably with her
For reluctant landlords such as Tracy Smullen, this is not a sector she ever imagined she would find herself in.
“You’re essentially a property manager, so we have to do inspections, repairs, provide all sorts of support,” she said. “With the amount of time and effort and hassle that goes along with it, we had to hire someone extra to cover the role. We didn’t want it, but we had to do it.”
She’s also keenly aware that by taking up these apartments, she is potentially depriving other people who could have lived there. It’s not something that sits comfortably with her.
Smullen knows that she is open to the perception that she has squeezed other possible tenants out of the market.
“I am sensitive to the fact that there are families who never got access to the houses that we got access to,” she said. “I’m sure families were bypassed.
“We have staff who aren’t only coming for a year, trying to get a mortgage... I have friends who are renters and I see the pressure they’re under. So I totally understand that frustration.”
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