Vacant homes tax could help solve housing crisis

Last July, the CSO published preliminary housing statistics from Census 2016. They found over 198,000 empty homes, excluding holiday homes, across the State. These empty homes represent the type of low-hanging fruit that should be the highest priority for policy makers, legislators and State agencies seeking to secure greater housing availability. It is incomprehensible how a situation can exist whereby over 10per cent of our housing stock is vacant while we experience a chronic shortage of available housing units for individuals in need and those in the market.

Now, in a welcome development Fergus O’Dowd TD is bring forward a private member’s bill on the issue that give legislators the chance to address this critical area. What is currentlyproposed is reported to be a doubling of property tax on properties left unused for two years. Fianna Fail have not ruled out supporting the measures proposed by the Fine Gael TD

There is a growing sense of frustration, particularly for those in need of housing, and those working on the frontline in housing and homeless services. In recent weeks, Apollo House (one symbol, but not a solution, for that frustration) saw the spotlight once again return to the issues of vacant buildings and NAMA, and its role in housing provision.

This paper recently reported that NAMA has, to date, delivered just 2,500 units deemed suitable and appropriate for social housing. It is unquestionable that NAMA must provide an improved social housing dividend but, given that the vacancy rate within NAMA’s residential stock is 1 per cent, that social housing provision must now come from new build projects.

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Local authorities, who rightly faced strong criticism for not managing their own stock better, have brought thousands of homes back into use. Their remaining units are now being lined up to re-enter the housing system. Local authorities demonstrated that, once provided with the resources, commitment and direction, vacant housing units could be returned to use quickly and effectively.

As the Government moves to prepare the latest sub strategy of Rebuilding Ireland on the issue of vacant homes, there are a number of key actions that must be addressed.

Vacant Property Tax

If we are to push the required number of vacant units back into the housing system, the Government must move beyond incentives and bring in a tax on units that are unoccupied. Whilst supportive of Deputy O’Dowd’s proposal to double property tax we would like to see a specific empty homes tax on appropriate units vacant for 1 year or more and based on the value of the property would encourage owners to put the building to use or raise revenue that could be ploughed back into renovating empty homes.

A vacant property tax exists in many jurisdictions and has recently been introduced in Vancouver which, like Dublin and other parts of Ireland, is experiencing a major housing crisis and spiralling accommodation prices.

Real Time Database

One of the biggest challenges the State faces in tackling vacancy rates is that there is no real time data to ascertain how many empty units there are or the reason why so many private homes remain vacant. In fact, Census 2016 was the first time in five years (since Census 2011) that any effort was made by the State to compile and publish a comprehensive figure.

The situation in the private sector contrasts markedly with that in the public sector. Local authorities have an up-to-date register of their housing stock and the condition of individual units. A similar database of private homes is essential if the housing system is to be better managed.

Empty Homes Officers

In the UK, the use of empty homes officers has enabled local authorities to identify empty units and pro-actively engage with property owners to bring empty homes back into the housing system. In Bolton, North West England, empty homes officers are helping to return an average of 100 empty homes per month to the housing system. A significant number in a city with a population just shy of 140,000.

The Department of Housing in Ireland must ensure that funds are made available to resource local authorities to employ empty homes officers to drive vacant units back into the housing system.

Matchmaker Scheme

There will be individuals in possession of vacant homes who have no wish to oversee renovation works or to continue to own what has become an unwanted burden. In these instances, the Government should create a matchmaker scheme whereby approved housing bodies or local authorities purchase vacant homes from owners in order to return them to use for social housing or affordable rental schemes.

Peter McVerry Trust, like other organisations, has successfully raised millions of euros for major renovation projects which have brought disused units back into the housing system. A formal and State backed scheme could allow the work of approved housing bodies to be scaled up, returning more units to the broader housing system.

Compulsory Purchase Orders

The second measure that would encourage the scaling up of housing supply is the use of compulsory purchase orders. This measure must be used to acquire units which represent value, are of strategic importance and are located in areas with high housing need.

To date, there has been a reluctance to compulsorily purchase units of accommodation. An automatic CPO process should be put in place for any unit empty for five years or more as a means to prevent the current situation of staggering vacancy levels in our housing system.

National Coordination Unit

Finally, there is a need to set up a National Coordination Unit to manage responses to the issues of vacant homes, derelict sites and under used spaces. It would offer an important overarching view on the performance of local authorities and create a platform through which to share best practice. This unit would also provide technical expertise to acquire, renovate and put back into use empty homes full of potential.

Francis Doherty is Head of Communications at Peter McVerry Trust.