Why were there about 5,000 vacant rental homes in Dublin city at the last census?

There were about 5,060 vacant rental homes in Dublin city, according to the most recent census data. That doesn’t include homes that are derelict, being refurbished or for sale.

Census workers in April 2022 found another 3,730 vacant homes in the city, but couldn’t pin down what was going on with them – so some of those could be vacant rentals too.

Months later on 1 August, property website Daft.ie – which only counts rentals listed on its own platform – reported the lowest-ever number of homes available in Dublin. Just 292.

“I’d imagine there are a few things going on,” says Cian O’Callaghan, associate professor in urban geography at Trinity College Dublin.

“Some are in between tenancies, some are Airbnb, and possibly there are some high-end vacancies,” said O’Callaghan, who recently co-authored a report on urban vacancy in Ireland. Also, some are empty social homes.

In urban areas, there will always be some vacant homes on lands earmarked for big redevelopments, he said, and in other cases, investors might park money in vacant housing.

There is no way of telling which of these causes is most prevalent, O’Callaghan says, or how many of the homes were occupied again within weeks.

A functioning housing market should have around 3 to 5 percent vacancy, says O’Callaghan. That way, people can move house, he said.

But Ireland’s vacancy rate, while it has fallen slightly since the last census, is still much higher, roughly double that. Almost 8 percent of homes across the country were unoccupied, not counting derelict properties or holiday homes, the census found.

Throughout Ireland, there were more than 33,650 vacant homes identified as rentals with no one living in them. And a further 26,370 vacant homes for which the census staff couldn’t work out why they were empty.

Counting the reasons

Of roughly 2,125,000 homes in Ireland, there were 163,430 vacant homes and also 66,960 vacant holiday homes, the census found. That put overall vacancy at 8 percent without holiday homes, and 11 percent with them.

The 2022 census is the first to try to parse that number further, to capture why exactly homes were vacant on the night of the count.

“The inclusion of this ‘reason for vacancy’ category is really useful,” says O’Callaghan.

The Central Statistics Office process for investigating vacancy is fairly robust, he says. Staff use an app to log notes and they return three times to check up on vacant homes, he says.

Homes were classed as vacant if, based on looking around and talking to neighbours, the census workers assessed that they were unoccupied. The reason for the vacancy was assessed based on local knowledge.

Vacant short-term lets are included in the category of vacant rental homes, according to the CSO website.

The CSO took out derelict properties from the vacant homes figures. Homes where the householder was temporarily away were not counted as vacant either.

O’Callaghan says many long-term vacant homes are old properties needing a lot of work before someone can move in again. “It’s not a simple thing to turn them around.”

Renovations could in such cases end up more expensive than building a new home, he says.

But none of those barriers apply to vacant rental homes, he says. “What I would imagine is, that the vacant rental set of properties, it’s probably a different part of the housing stock.”

He thinks most would be modern and habitable, he says, and that the CSO would only categorise them as vacant rentals if they had been rented out fairly recently.

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Different solutions

Each type of vacancy requires a different policy response, says O’Callaghan. “There are all sorts of owners and all sorts of reasons. Individually they are quite logical.”

It can be more tax efficient for families to wait until an older relative dies to sell the house, he says.

If they sell when they are alive they would have to pay capital gains tax. After they have died, it is an inheritance and they pay less in tax.

There are also “complicated emotional attachments”. When a relative is sick, the family may not want to sell their home, he says.

Vacant social homes – of which there were around 4,470 owned by councils at the end of 2021, according to a report by the National Oversight and Audit Commission (NOAC) – demand another response.

A spokesperson for the Department of Housing said that it had spent €290 million from 2014 to 2022 on bringing council “voids” as these vacant homes are called, back into use.

One possibility is that short-term lets are behind a big slice of these vacant rental homes, at least in some parts of the country.

In Dublin, 28 percent of the overall vacant homes were assessed as vacant rentals.

In Galway city, a popular holiday destination with a severe affordable housing shortage, the census found that 35 percent of all vacant homes in the city were rentals, the highest in the country.

For Galway in particular, it screams Airbnb or the like, says estate agent Ben Thompson. “The government should be using the data and targeted incentives to get these back into use.”

Setting up a register for short-term lets could force as many as 12,000 properties back into the long-term rental market, the government said in December last year.

In July 2019, the government brought in laws requiring homesharers in rent pressure zones – including Dublin and Galway – to register with the local council.

Anyone renting a full home for more than 90 days a year is required to apply for “change of use” planning permission, according to a Department of Housing circular issued in June 2019.

There have been long-standing issues with compliance though, and with the effectiveness of councils in enforcing the law.

Between July 2019 and February this year, Dublin City Council opened investigations into suspected short-term letting of 1,540 properties, according to a response to a councillor query.

Of those, 1,430 cases have been resolved successfully and the council has issued just short of 60 enforcement notices, the response said.

In May, Galway city councillors agreed to write to the Advertising Standards Authority to complain that some short-term letting platforms were carrying adverts that breach planning laws.

At the meeting, Green Party Councillor Niall Murphy said the council doesn’t have the staff to police illegal short-term lets, according to the Connacht Tribune.

A spokesperson for the Department of Housing says councils can hire more staff and get funding for equipment for this, if they need it.

“Affected planning authorities have generally been granted approval for the funding of the additional staffing and IT resources that they requested,” says the spokesperson.

Galway City Council didn’t respond before publication to questions sent last Thursday about how many enforcement notices it has issued.

The government is planning to introduce a new set of rules for short-term lets, which it announced in December 2022.

“The proposed legislation will empower Failte Ireland to require online platforms to take down advertisements relating to short-term letting properties which do not have the necessary planning permission in place and to impose fines where such advertisements are not removed from the platforms,” says the Department of Housing spokesperson.

Those plans are currently on ice, however, because the Department of Tourism had to okay them with the European Commission, which has raised concerns that they are too restrictive and that sufficient evidence hadn’t been presented.

A spokesperson for the Department of Housing says that if the European Commission approves the rules, the Department of Tourism will roll out the new regime early next year.

The government is also rolling out a vacant homes tax. That is self-assessed, and applies to homes that are lived in for less than 30 days a year. The levy is three times the rate of the local property tax.

The vacant homes tax may affect some properties but it probably won't impact the conversion of housing to short-term lets, says O’Callaghan.

“It's an attractive prospect for property owners because you can earn more money,” he says. “The solution to that is regulating short-term lets.”

The government could consider changing how it taxes the income from short-term lets to encourage property owners to return to renting them as homes, he says.