Owners of Vacant Homes Turn Down Deals to Use Them

When Dublin City Council Housing Manager Tony Flynn gave an update recently about a newish scheme to transform vacant properties into homes for social-housing tenants, it wasn’t upbeat.

The repair-and-leasing scheme is “quite slow” and all of the approved housing bodies and the council are working really hard and for little return, he told councillors on the council’s housing committee on Thursday.

“We’re probably in the low numbers, between ourselves,” he said. They’ve got maybe 25 or 30 possible properties.

The repair-and-leasing scheme was introduced earlier this year, with a target of renovating  800 vacant units nationwide and securing them for people on the social housing list.

Nine percent of the housing stock in Dublin city was vacant at the 2016 census, according to the CSO; that meant there were 20,844 vacant homes (plus 937 vacant holiday homes). In some parts of the city, the vacancy rate topped 20 percent.

The repair-and-leasing scheme offers owners of properties that are in need of repair an interest-free loan of €40,000 on the condition that they rent the unit to social-housing tenants for a minimum of ten years.

But charities behind the roll-out of the scheme say it’s unlikely to achieve its targets.

“This isn’t only a question of people not having money to do up these properties,” says Francis Doherty, communications officer at the Peter McVerry Trust, which is in charge of the scheme in the council’s Central Area, roughly the north inner city.

Many owners they have spoken to so far are people with property portfolios, he says.

Other housing non-profits have been given responsibility for rolling out the scheme in other parts of the city – and say it isn’t going well there, either.

There aren’t many properties in the south-east of the city that are blocked from being rented due to a lack of €40,000, says Mike Allen, the director of advocacy at Focus Ireland.

“Due to the high level of rents in the south-east of Dublin, we think there are likely to be very few properties for which this scheme is the solution,” says Allen.

In Raheny, Coolock, and Clontarf, too, there don’t seem to be many properties in disrepair, as property is valuable there, says Brid McGrath, the communications officer for approved housing body Respond, which is overseeing the scheme in that corner.

Missing Owners

Doherty says that one of the major stumbling blocks for their organisation so far has been simply trying to find out who owns the vacant properties.

It is time-consuming and the trust has hired two “vacant homes officers” to focus on that. So far, they’ve identified around 370 empty properties in Dublin City Centre.

“In approximately 50 or 60 cases out of 370 properties we examined, they were complete dead ends,” says Doherty. They couldn’t find the owners.

In cases such as these, he argues that the council should be able to go ahead and issue a compulsory purchase order.

Many of the properties are derelict but just not on the council’s derelict sites register, says Doherty.

No Need

It seems strange to want to leave a property vacant rather than renting it for a monthly income. But Doherty says that most of the owners that the Peter McVerry Trust have contacted simply don’t need the money.

The buildings are lying empty for a variety of reasons. One owner said they are waiting for rents to continue to climb and that they’ll be able to rent it out without making improvements, said Doherty.

Others say they plan to sell or move in themselves at some stage, and don’t find the proposition attractive enough to change their plans, he says.

At Thursday’s meeting, Fine Gael Councillor Ray McAdam asked whether they could just issue a compulsory purchase order when owners had refused to engage, and said they were just going to sit on it.

“We wouldn’t have the legislation to do that, not unless it’s on derelict sites,” said Flynn, the council housing manager.

Doherty says that despite the challenges, the Peter McVerry Trust are determined to make the scheme work.

Some flexibility around the amount available and the repayment terms would help them to do that, he says.

Others argue that there needs to be more stick, as well as the carrot. “The loss of potential income does not appear to be sufficient,” says Allen of Focus Ireland.

“The possibility of additional taxation would make a difference to the dynamic of this market,” he says.

Focus Ireland is advocating for an empty-property tax with exemptions if reasonable grounds exist for the property to be vacant – for example, if the owner is in hospital, or the property is up for sale.

Not only would it motivate owners to rent out the property, it would also “create the situation where owners of empty properties would have to come forward rather than all the searching and looking falling to us”, says Allen.

Doherty agrees. “We need a tax. People are sitting on assets and they don’t need the rent.”

More Measures

At the moment, it’s unclear what the status is of another scheme – the buy-and-renew scheme – which funds local authorities to purchase vacant homes and do them up, rather than leasing them.

Doherty says that some property owners would prefer the buy-and-renew option, and that it should be made available now. “One very frustrating element is that the buy-and-renew hasn’t been rolled out yet,” he says.

The central government needs to issue a circular to local authorities on how the scheme will work, he said. “Without the circular […] local authorities cannot issue a notice to us that we can apply for funding under the scheme.”

At the council meeting last Thursday, Flynn said the council was making submissions under the buy-and-renew scheme for properties to acquire with compulsory purchase orders. “We feel the context of the scheme that is suitable for the city is the buy-and-renew scheme,” he said.

A spokesperson for the Department of Housing says that the buy-and-renew scheme is available to local authorities and approved housing bodies right now.

“An initial €25 million has been made available in 2017 and may be increased to as much as €50 million in 2018, which should result in at least 400 to 500 renewed houses – or a greater number if costs per unit prove reasonable,” said the spokesperson.

Respond, the approved housing body, plans on focusing on the buy-and-renew scheme too.

“It is better for the retention of these units as social housing properties that we […] acquire them for long term availability as social housing stock,” says communications officer McGrath.

The Target

The Department of Housing has set a target that between now and 2021, the repair-and-lease scheme should bring into play 3,500 homes at a cost of €140 million, said the spokesperson.

“The department will be closely monitoring the activity […] to ensure that the scheme works well, that the funding available is utilised effectively and ultimately, that new social houses are delivered,” he says.

He didn’t rule out the possibility of a vacant-homes tax. “Minister Murphy will be working on a vacant homes charge over the summer,” he said.

Says Doherty: “Ultimately if this is going to be cracked, we need the repair-and-leasing to be tweaked, we need the buy-and-repair circular to be issued straight away.”

His team is delighted to be working on the scheme. “But ultimately the local authorities need to appoint an empty-homes officer as they are the ones who have the powers and access to information that no one else has,” he says.