Ireland’s State-backed Cost Rental housing scheme is providing tenants with rents almost 30% below those charged on the private market, according to a new report from the Economic and Social Research Institute (ESRI), highlighting both its affordability benefits and its limited geographic reach.
The analysis, funded by the Department of Housing, found that households in Cost Rental homes pay on average 29.9% less than comparable private renters. The scheme is designed to set rents based on the actual economic cost of delivering housing rather than market-driven pricing, making it a key pillar in Ireland’s efforts to address rental affordability pressures.
However, the ESRI noted that the scheme remains heavily concentrated in the Dublin region, with limited availability in other cities and regional towns where housing pressure is also acute. Researchers said expanding the programme beyond the capital will be essential if it is to make a broader national impact.
Professor Conor O’Toole, one of the report’s authors, said the results demonstrate a clear financial advantage for participating households. He said the evidence shows “a clear affordability benefit for households in Cost Rental properties relative to what they would face in the private market.”
The report recommends regular reviews of eligibility rules, including income thresholds and affordability criteria, to widen access and support expansion into more areas. Researchers also pointed to structural cost reductions that make the model viable, including the removal of developer profit margins, access to lower-cost long-term financing, and the use of public or discounted land.
Dr Rachel Slaymaker of the ESRI said these mechanisms collectively reduce rental costs for tenants and improve household financial stability. She said the scheme “can really reduce the amount of income that these households are spending on their rent,” describing the impact as significant for tenant welfare.
She added that demand for Cost Rental homes is consistently high, with most schemes oversubscribed, reflecting broader shortages in the housing market. While delivery has increased since the scheme’s introduction in 2021, she said supply remains far below demand.
“So all of these are coming together to reduce the cost that tenants are paying,” she said, noting that scaling up supply will be critical as the tenure type matures.
Although still in its early stages, the ESRI said Cost Rental is already showing strong potential as a long-term affordability tool. However, it warned that without sustained expansion into urban centres and regional towns, its overall impact on Ireland’s housing crisis will remain limited.
