The lack of accommodation is hindering the ability of four out of every five businesses in Galway to hire staff.
That rises to nine out of every ten businesses in the tech sector, a new survey by Galway Chamber of Commerce found.
But the research also found the issues are impacting the ability of firms in the county to hold on to staff, with 70% reporting retention issues due to housing.
As a consequence, seven in every ten of the 200 member firms who took part in the survey said they had reduced hiring targets over the next year.
The chamber says all options for addressing the issue must be considered, including enabling sites of development potential, improving public transport and targeted measures to free up vacant rooms and buildings across Galway.
"As these survey results lay bare, the housing crisis is having a real impact on business in Galway and the local business environment," said Galway Chamber CEO Kenny Deery.
"The problems people are facing finding accommodation for themselves and their families are making it increasingly difficult for our local businesses to secure and retain staff."
"These aren't isolated stories, this has become the norm and it is impacting businesses of all shapes and sizes – from start-ups to multinationals and from tech and pharma businesses to professional services and retail. Everyone is feeling the accommodation pinch."
Carried out in early April, the poll found 56% of firms claimed accommodation issues are 'regularly’ cited by potential hires when considering a role with their business.
An additional one in eight businesses said the issue is 'always' mentioned.
One in every seven said potential hires or existing staff have cited the inability to find accommodation since January.
Over that same period, more than three quarters said existing staff or potential new hires have complained that rent locally is too expensive.
While more than half have been told by staff or potential hires there are no properties for rent in their price range.
When it comes to buying a home, two in every five said there are no houses or apartments for sale in their price range.
The knock-on effect is that 18% of businesses in the city and country have been told by staff or new hires that they are looking at other professional opportunities due to better accommodation options.
"When you consider that almost half of the Galway business community say the lack of accommodation and the knock on implications for staffing will definitely impact their plans to invest in Galway, clearly this should be a major cause of concern for everyone in the public policy space as well as the entire business community," said Mr Deery.
"If we want to keep investment flowing west then this issue needs to be tackled. We must find solutions – both in the short term and the medium term because otherwise businesses and their staff will suffer."
