“Up to a few years ago we literally had a surplus of suitable buildings in the city, but now rents have doubled, if not tripled.”
Few places in Ireland showcase the country’s economic rebound quite like Dublin Docklands. Once a decaying industrial area, the neighborhood is now the city's hippest and most expensive, a stomping ground for young tech workers who socialize in its trendy cafes and bars and swell out of the sleek offices of Google, Facebook, and Airbnb, corporations most cities trip over themselves to attract.
A financial basket case just six years ago, Ireland has become the darling of the European Union, boasting its fastest growing economy and double digit annual increases in property values. But the same parade of international capital that has helped drive Dublin’s success is prompting a familiar narrative to unfold: Artists are being pushed out.
Dublin artists who once saturated the Temple Bar area were jolted by a wave of gentrification in the early 1990s. They were pressured again during the Celtic Tiger, a period of rapid economic growth that stretched from about 1995 to 2002, when it evolved into a full-fledged property bubble. This time, displacement is happening at a far more astonishing pace. At least 50 percent of all artist studios in Dublin have either closed or been displaced in the last four years, according to the city’s arts office.
The crunch in studio space comes after a particularly robust period in Dublin’s art scene. In the wake of a massive real estate crash that felled Irish banks and sank property values, artists transformed vacant buildings into studios, converted abandoned supermarkets into pop-up galleries, and recast empty warehouses as venues for poetry readings and film festivals.
“It was really vibrant and it was something that we’ve always had a tradition of here: Mad artists doing it for themselves,” said Noel Kelly, chief executive of the non-profit Visual Artists Ireland. “It was something the Celtic Tiger killed, and all of a sudden it was back.”
It didn’t last. Most of the leases signed during the recession were for short terms or included clauses for periodic “rent reviews,” allowing landlords to reset rents at market levels. Artists found themselves rapidly squeezed out in favor of more lucrative tenants or by buyers looking to redevelop properties for other uses. Though the loss is partly attributable to studio governance structures that couldn’t adapt fast enough to changing conditions, Kelly says, today’s market has left many artists still renting space from commercial landlords hanging on by their fingertips.
“Up to a few years ago we literally had a surplus of suitable buildings in the city, but now rents have doubled, if not tripled,” he said.
To understand how it all happened so fast, it helps to consider the larger story of the Irish property market, which has been a study in extremes in recent years. The country’s debt-fuelled property bubble was so swollen that when it burst, rents in all sectors fell by more than 50 percent, the largest decline anywhere in Europe. The Irish government was forced to take an €85 billion ($95 billion) bailout package from international creditors, property developers went bust, and the financing that fuelled building activity during the boom—almost all of it from Irish banks—disappeared overnight.
But in the wake of this extraordinary crash, the conditions were already building for a turnaround so sharp it would bring a different set of problems to the table. As construction in the capital came to a halt, the flow of foreign firms drawn to Ireland’s low corporate tax rates and educated workforce carried on and the oversupply of space from the boom quickly diminished. Meanwhile, more international investors took a shine to the Irish market, where buildings could be bought for less than it would cost to build new ones.
By 2014, Dublin’s property market was hot again. A survey by the Urban Land Institute and Pricewaterhouse Coopers named the Irish capital the top European city for new investment. Rents began to rise at a breakneck speed, increasing an average 28 percent in each of the past two years.
The city now faces shortages in both the commercial and residential markets. The chronic lack of housing recently pushed rents in the capital above their boom time peak and has left the city grappling with a growing homelessness crisis.
Other cities with hot real estate markets—like London and San Francisco—are experiencing property shortages and steep rent increases, but they don’t quite compare to Dublin. That’s partly because no other city saw construction stop for such a long period or witnessed such a massive decline in property values during the global recession.
“The rate of decline and then growth in Ireland is unprecedented on an international level,” says Colm Lauder, vice president at MSCI Real Estate-IPD in London. “There have been strong spurts of growth in other markets sure, but nowhere has matched Dublin.”
Analysts expect rents to level out in 2017 when a number of new projects—including the $190 million Vertium building and the $225 million Capital Dock development—are completed, but it’s unlikely they will return to the recessionary levels that opened so many opportunities to artists. In lieu of a friendly market, artists are now pushing Dublin City Council to consider a variety of solutions they say would protect studio space during both booms and busts. Dublin currently leases a series of buildings out to artist organizations and lists the provision of studios as an objective in its official plan. The artists’ proposals for the city’s new development plan include the adoption of culture and heritage as zoning objectives and a 5 percent allocation of all new building developments in the docklands to social, cultural, creative, and artistic pursuits.
Efforts around zoning have had some success in Copenhagen and Barcelona, cities that have established long-term plans for cultural development, says Graeme Evans, a professor of urban culture and design at Middlesex University. But, he adds, time is of the essence. Once artists leave a city, there’s no guarantee they’ll come back.
“A lot of work suggests proximity to artists and a diversity of creative work is crucial to drawing in firms,” he says. “So we need to make space for them even if they don’t fit in a market-driven model.”