Over the last few months, there have been a growing number of proposals for tall buildings in Dublin. The most recent was on the former Hickeys site, at Parkgate Street between Heuston Station and the entrance to Phoenix Park. The proposal by Chartered Land includes a 29-storey tower as part of a four-block development, containing in total 481 homes.

The property developer Johnny Ronan, meanwhile, continues to battle planning authorities over his proposal to increase the site of the Salesforce Tower in Dublin.

The spate of projects has some worrying about another bubble. One reason that we are seeing these kinds of proposals is that there is the perception, at least, that the current composition of An Bord Pleanala, the ultimate arbiter for these projects, is significantly more favourably disposed to height than previous incarnations of the Bord. The more important factor, however, is that Dublin faces a chronic shortage of built space.

This is particularly true of apartments, where the city appears to be something like 75,000 apartments short of where it needs to be to match supply and demand. But it is also true of other kinds of space, even if they are less popular with some commentators. With a missed decade from 2007, Dublin is also faced with long-standing shortages of hotel bedrooms, student accommodation and co-living. With the city home to the European or international HQs of a growing number of online services firms, Dublin has also very strong demand for office space – although perhaps not at the rents that prevailed for the last couple of years.

Dublin is perhaps the bulk of the challenge but similar pressures exist in Cork and Galway. Ultimately, all these pressures on the real estate sectors of Ireland’s three largest cities reflect Ireland’s changed economic fortunes. Taking the big picture, Ireland had no ‘business model’ between the mid-19th century, when it stopped being the bread basket for Britain, until the late 20th century, when it entered the Single European Market.

Entry into the Single European Market – and adoption of the euro – combined with some of Ireland’s other attributes, including an English-speaking population, long-standing connections to North America and a low corporate tax, to give it a new business model. It became a hub for international business, especially from the US, to access the world’s largest consumer market.

A computer-generated image of the 29-storey block on Parkgate Street as seen from Heuston Station.

But when a country goes from a long period of decline and stagnation to a prolonged period of growth, it needs the infrastructure to accompany and allow that growth. In the crude terms of economics, Ireland went from exporting labour to importing it. But all labour needs capital, so Ireland has entered a long phase of being a capital importer, as it looks to catch up on all that missed population growth between the mid-19th and late 20th centuries.

Over the last couple of decades, however, Ireland has failed to add the required infrastructure, including real estate. Up to the mid-1990s, a home in Dublin was – on average – not substantially more expensive than a home elsewhere in the country. As of 2020, a home in Dublin sells or rents for roughly twice that of a home elsewhere in the country.

This speaks to decades of under-building in Dublin, as well as a splurge of over-construction in rural Ireland in the latter part of the Celtic Tiger period. But there is nothing inevitable about a large city being more expensive for housing than other parts of a country. On a like for like basis – for example, taking a five-bedroom property on a large site and moving it from Leitrim to Dublin 4 – obviously, the price will go up. But large homes on large sites are part of the compensation for living away from the amenities a city offers. What really matters is whether a household can buy a home that works for them for, say, €200,000 – or rent one for €1,000 a month – anywhere in the country.

This is the context, then, for all these recent proposals to build tall in Dublin. But does it make sense for Dublin to go up? The short answer is that – in a city with such strong underlying growth pressures – is that there are three main options for how to respond.

Can you stop the city from growing?

The first is to simply try and stop the city from growing. This is perhaps the politicians’ preferred option. Given Ireland’s multi-seat constituency set-up, and given its moderate bias in favour of rural areas, there has always been a tendency for Ireland’s political system to try and take the growth and redistribute it around the country, ideally to marginal constituencies.

Unfortunately, however possible this may have been in an age where the IDA’s typical project was a manufacturing facility where most workers were on the assembly line, in an age where Ireland exports tradable services, this is simply not an option.

And this is a key point. It has become something of a truism that “Dublin is too big” for Ireland. This is despite the fact that Dublin city is no larger a fraction of Ireland’s population today than in the 1960s. And comparing Ireland to other countries, Dublin is not at all an outlier in terms of its overall share of the population.

The smaller the country, the bigger a fraction living in its largest city and Ireland is no exception. Not only that, Ireland is a country that specializes in services, which cluster in urban centres even more than manufacturing tends to.

Since the launch of Ireland 2040, official government policy has – to give credit where it is due – at long last recognised the truth that cities drive growth not only for themselves but for the country as a whole.

Still, there appears to be a pervasive doubt about the wisdom of building tall in Ireland. So if stopping growth in our cities is not an option, what is left?

Fat or tall? Density or sprawl?

Dublin – and to a lesser extent Cork and Galway – therefore face the choice of growing up or growing out. Or, in blunter language, if you were a city, would you rather grow fat or tall?

Think about this as a choice between vertical and horizontal commuting, or at least a slight shift towards at least some of the typical commute being to and from the ground, rather than in and out of the centre.

This may seem an odd way of thinking about this but up/down commutes have a huge factor in their favour compared to in/out commutes: gravity.

In a sprawled low-rise city, similar to Dublin currently, there is no ability to use the force of gravity to help minimise the energy cost of commuting. Over coming decades, environmental sustainability will require us to decarbonize our economies completely. Key to doing that will be decarbonizing our transportation. If we persist living in sprawled communities, this will be more difficult.

This is doubly so as mass transit options, such as over-ground light-rail and underground metro services, can only be viable where population densities within walking distance are great enough. The imperative to decarbonize our economic activity puts an onus on policymakers to favour density over sprawl.

An infeasible policy option for Dublin

I know that some of those who contribute to the public discourse on housing policy agree with this pro-density argument but disagree when it comes to building tall. They argue that consistently medium-density development – of something like six storeys – should be enough to reap the benefits of density without having to build tall. In support of this line of reasoning, they point to cities in Spain and France, such as Bilbao, which are dense but not high rise.

While this is appealing at first glance, it is an entirely infeasible policy option for Dublin or indeed any Irish city. For Dublin to have density without having tall buildings, it would need – similar to cities like Bilbao – to have 4-6 storeys everywhere in its urban core, rather than just its newly built stock.

This will prove incredibly unpopular with voters between the canals, who face having their one and two storey homes demolished in order to engineer a Hausmann-style reimagining of Dublin. The opportunity cost of not building tall is shown in the proposal for the Hickey’s site near Heuston. If Chartered Land wanted to build the same number of homes but were not allowed to build so tall, they would not be in a position to include a public plaza as part of their plans.

Building up?

Winnipeg, a Canadian city of roughly 750,000 people, has over 150 high-rise buildings.

This leaves Ireland, then, with the option of building up. There is absolutely nothing to fear from this. It is an entirely normal phenomenon for growing cities. Winnipeg, a Canadian city of roughly 750,000 people, has – according to the Skyscraper Database – over 150 high-rise buildings of 12 storeys or more. Ottawa, with almost a million residents, has over 400. But perhaps they’re just different in North America.

Perhaps, but Luanda, the capital of Angola, has almost 90 tall buildings, while La Paz in Bolivia has almost 100. There are, in fact, almost 300 cities around the world that have seen 50 tall buildings built and lived to tell the tale.

Maybe it’s a European thing, though. Perhaps our continent’s unique architectural heritage – albeit financed by ethically questionable colonial revenues over centuries – means that tall buildings are incompatible with the European way of life. Unfortunately, again, the facts tell a very different story.

European cities are, on the whole, very comfortable with tall buildings. Almost sixty European cities – many smaller than Dublin – have more than fifty tall buildings.

Rotterdam has more than 400 tall buildings.

Rotterdam and Amsterdam, in the Netherlands, are similar to Dublin in size and have a similar architectural heritage but have almost 400 tall buildings each. Nor is this a question of wealth. Riga in Latvia and Poznan in Poland – cities with much lower average incomes than similarly-sized Dublin – have between 150 and 200 high-rise buildings each. In fact, Ireland is somewhat unique, in being an EU member state with a population of more than a million with very few tall buildings.

Those who argue against height would need to explain why it is so inappropriate for Ireland given all our peers have long ago adopted this policy. The figure above shows the number of tall buildings across a range of European cities with a population similar to Dublin’s.

A solution to the housing crisis?

The last piece of the puzzle is the extent to which – if we do allow Dublin and other Irish cities to build up – this will alleviate the rental housing crisis. The answer to this is a little more complicated than the unambiguous recommendation above. Most tall buildings are not exclusively residential. In fact, many tall buildings are entirely office space or a mix of office and hotel space. And of those tall buildings that are residential, many are deliberately targeted at the top end of the income distribution.

But this is feature, rather than a bug. The whole idea is to free up more ‘regular’ space for those with more regular means by getting those with high incomes to pay the premium associated with occupying premium space. And the more of this is built, the more regular it becomes. Suppose Dublin, with 100,000 rental homes built 20,000 more over the coming years aimed at those with high incomes. What will happen the rents of the existing stock? We know from study after study that they will have rents lower than would have been the case if the new stock had not been built.

I know that some commentators fret about the upswing in land values, if we signal as a society that we are happy to consider tall buildings. This seems to completely miss why land values increase. Land values are a signal representing what the perceived economic opportunity of a location is. If that increases, that is a good thing, not a bad thing. Land rents in Dublin’s former docklands are much higher today than 30 years ago because it is a hub for employment, rather than an area in decay.

There is, of course, no reason to leave this upswing in values with the landowners. Most high-income countries have in place a land tax of some description, so that when society creates value for a site, it recoups at least part of it back for the taxpayer. This society added-value can be either the long hard way by turning the country around over a generation, or overnight by allowing someone to building tall where previously they couldn’t. Ireland does not have a land value tax but that can be fixed overnight and certainly should not be used as an excuse to allow Ireland to ease its growing pains.

In a long phase of growth, Ireland’s cities are burdened by a persistent shortage of space of all kinds, especially residential space. Given this, and given the country’s need to go carbon-neutral over coming decades, Ireland can and should go tall.