Thousands of student beds to be built by universities with access to government funding and low-interest loans must be provided at “below market interest rates”, Higher Education Minister Simon Harris has said.
The minister on Thursday confirmed details of a €434 million partnership between the European Investment Bank (EIB) and the Housing Finance Agency to provide up to 2,700 student beds. Many higher education institutions complain that the cost of building housing is no longer economical given rampant inflation in the construction sector.
Mr Harris said the new agreement would enable construction projects and provide students with “affordable” rents. “We will reach an agreement [with universities] that the share of public money we invest is returned in the form of property and accommodation offered at below-market prices. This is certainly not because of a “would you mind” or goodwill gesture. It is an agreement with the university.”
Mr Harris said the new funding mechanism would support institutions with the costs of building housing and help close the gap between viability and affordability for students.
In addition, he said taxpayer money would be made available to universities to fill the funding gap in building new student accommodation. “Every student bed we build has a dual purpose. It helps students and their families, but also frees up private rental accommodation in our cities and towns. This investment by the EIB and the Housing Finance Agency will have significant benefits for access to education and, importantly, for the entire housing market.”
The investment announced on Thursday comes separate from the government announcement that a total of just over €60 million was allocated to enable the development of over 1,000 beds across four universities. Deployment will begin in 2024. These beds will be located at DCU, University of Galway, University of Limerick and Maynooth University. A separate announcement is expected to reveal planned developments at UCD and Trinity College Dublin soon.
Barry O’Leary, chief executive of the Housing Finance Agency, said the initiative announced on Thursday was backed by a 40-year credit facility from the EIB, which would ensure “long-term, competitive financing is available for new student housing projects over time.” . the next five years.”
“EIB support will reduce financing costs for universities and enable lower monthly rents for students living in new accommodation,” he said.
Mr O’Leary said discussions were already underway with Irish universities and technology universities about providing funding from this new fund to support the construction of additional student housing.
Separately, it is understood Trinity College Dublin has decided to freeze rents for students in college-owned accommodation next academic year. The university provides hundreds of student beds at its Dublin city center campus and at Trinity Hall in Darty, Dublin, where rents range from €166 to €276 per week.
A source said the decision to freeze rents was made amid student affordability concerns, despite college accommodation running a significant financial deficit due to maintenance and renovation costs.
Last month, a group of students blocked the entrance to the Book of Kells exhibition at Trinity College Dublin in protest at a 2 percent rise in on-campus accommodation prices. Around 30 students blocked access to the tourist attraction with posters reading “Students are not cash cows” and “Freeze rent”.
The college’s students’ union claimed that Trinity College “makes €10 million a year” from its student accommodation.
Trinity said in a statement at the time that the 2 percent increase was part of a three-year plan that expires this year and is subject to review. A spokeswoman said at the time that, given persistently high inflation, “moderate rent increases” were needed to cover rising costs. “Inflation has been high for some time; in the 12 months to August 2023, the housing, water, electricity, gas and other fuels category increased by 17.3 percent.”