Radical change of policies is required

A sustainable and fair housing policy is needed to address society’s needs, writes Dr Rory Hearne

The residential vacancy rates from the 2011 census highlight the necessity of a radical change in housing and regional economic development policy.

They make it clear our housing system is fundamentally dysfunctional. We now have the scandalous and untenable situation whereby 90,000 households are defined as ‘in housing need’, and up to 5,000 homeless, and yet over twice that amount (230,056) of housing and apartments units lie vacant.

This is because far too much of the housing built over the last two decades was done as a speculative investment rather than providing an affordable home.

Vacancy rates also vary considerably. Rates are lower in the cities, particularly Dublin at 8.2%, South Dublin, 5.4%, Cork City, 11.1%, and Galway, 11.2%. The counties with some of the highest vacancy rates include Longford (21.6%), Leitrim (30.5%) and Cavan (21.6%), which result from oversupply due to residential tax reliefs. In terms of the actual numbers of units, the largest numbers are in Leinster, which has 106,658 vacant units, and Dublin has one fifth of all vacant properties (43,707) including 16,321 apartments.

The reason for the large number of vacant units is the oversupply produced during the Celtic Tiger housing boom. A private investor and developer-led property development frenzy was encouraged through government policy, domestic and international speculative finance lending, and the property industry.

For example, in 2007, Bank of Ireland was lending as much money to speculative investors (as ‘buy-to-let’ and second properties) as it was to first-time buyers. Banks also lent recklessly to families who were told that property prices were only ever going to rise.

All this led to a massive housing bubble. The regional variation in vacancy rates was also influenced by the failure to implement proper regional policies.

Employment policy focused on the construction industry and foreign multinationals that tend to locate in and around Dublin. The recession has shown up the spatial inequality of this policy as unemployment rates in areas like the south east and west remain significantly higher than the east.

According to the ESRI, even though there will be an increase in household demand of 180,000 housing units by 2021, because of the oversupply, only 90,000 new units will need to be built. Significantly, 86% of all new build is needed in the Greater Dublin region.

Many western counties are projected to still have an oversupply in 2021.

There is an assumption by policy makers and property economists that vacancy rates will fall in the coming years as owners help ‘supply’ by either selling or renting their properties as prices rise from increasing demand and the market returns to the ‘normal’ vacancy rate of 6%. However, a significant portion of vacant properties are investments primarily focused on capital appreciation, ie to make a large profit when they are resold.

This is evident from the fact that when demand and prices were at their highest ever in 2006, there was still over 200,000 properties vacant. Furthermore, vacancy rates of 3% exist in other European cities.

Furthermore the CSO’s vacancy figures do not include derelict properties that are classified as dilapidated and boarded up for a significant time. Any casual observation of our towns and cities reveals this as a major issue. Added to this, there are even higher vacancy rates in commercial and office buildings.

Part of the problem is that most of the analysis in the media of housing and property issues is being provided by economists and analysts with a direct interest in the property industry.

They articulate the perspectives and analysis of those who have wealth to accumulate and profit from investment in housing. They advocate policies that aim to achieve rising prices.

There is an absence of an alternative analysis that questions for whom such price rises benefit and uses different assumptions and indicators for housing, such as fair, sustainable and balanced policies focused on what needs to be done to address housing need, separate from those seeking owner occupation.

Such a ‘rights-based’ framework analyses vacancies in a very different light by contrasting them with levels of housing need.

For example, there are 2,000 households on the housing waiting lists in Clare, yet there are 7,172 vacant properties.

In Cork City, there are 6,000 in need of housing and 6,108 vacant units; in Kildare, 5,500 in need and 6,123 vacant, in Laois; 902 in need, and 3,938 vacant; in Waterford, 1,800 in need and 3,232 vacant.

A national level analysis shows we could solve the housing waiting lists twice over using vacant properties (even excluding holiday homes). There are clearly issues of ownership, and if a vacant unit is rented, it wouldn’t automatically provide lower rents. Also the location of units must be appropriate. However, it shows the Government has options when it comes to providing increased supply for meeting housing need.

It is very likely many of the 40,000 buy-to-let properties in mortgage arrears are vacant. The Government could buy these and provide them as social housing or low cost rent. It could instruct and empower local authorities to implement vacant and derelict property taxes (not just sites as proposed) or fines that would bring units in to use.

It could compulsory purchase the vacant units using funding from the strategic infrastructure fund and provide local employment and social housing. Overall, the high vacancy rates show we have to move away from a housing system based on promoting finance-led owner occupation and speculative investment and implement policies that provide genuinely affordable, high quality, long term secure housing as a home.

It also highlights the need for proper planning and regional development that can develop indigenous employment rather than an unsustainable reliance on low-tax multinationals.

-Dr Rory Hearne is a political and economic geography lecturer.

There are over 168,000 empty houses in the country, finds Stephen Rogers

NATIONAL

-168,427 — vacant houses

-61,629 — vacant flats

-59,395 — vacant holiday homes

-1,994,845 — housing stock

-14.5% — overall vacancy

LEINSTER

-58,401- vacant houses

-36,702 — vacant flats

-11,555 — holiday homes

-1,030,902 — housing stock

-10.3% — vacancy rate

CARLOW

-2,287 — vacant houses

-632 — vacant flats

-283 — vacant holiday homes

-23,165 — housing stock

-13.8% — overall vacancy

DUBLIN

-17,597 — vacant houses

-25,333 — vacant flats

-777 — vacant holiday homes

-527,665 — housing stock

-8.3% — overall vacancy

DUBLIN CITY

-7,995 — vacant houses

-16,321 — vacant flats

-322 — vacant holiday homes

-241,678 — housing stock

-10.2% — overall vacancy

DÚN LAOGHAIRE-RATHDOWN

-2,746 — vacant houses

-3,750 — vacant flats

-120 — vacant holiday homes

-85,896 — housing stock

-7.7% — overall vacancy

FINGAL

-4,070 — vacant houses

-2,823 — vacant flats

-311 — holiday homes

-102,793 — housing stock

-7% — overall vacancy

SOUTH DUBLIN

-2,786 — vacant houses

-2,439 — vacant flats

-24 — vacant holiday homes

-97,298 — housing stock

-5.4% — overall vacancy

KILDARE

-4,432 — vacant houses

-1,691 — vacant flats

-188 — vacant holiday homes

-78,794 — housing stock

-8% — overall vacancy

KILKENNY

-3,569 — vacant houses

-654 — vacant flats

-401 — vacant holiday homes

-39,005 — housing stock

-11.9% — overall vacancy

LAOIS

-3,277 — vacant houses

-661 — vacant flats

-149 — vacant holiday homes

-32,664 — housing stock

-12.5% — overall vacancy

LONGFORD

-3,202 — vacant houses

-556 — vacant flats

-317 — vacant holiday homes

-18,823 — housing stock

-21.6% — overall vacancy

LOUTH

-4,207 — vacant houses

-1,406 — vacant flats

-619 — vacant holiday homes

-51,186 — housing stock

-12.2% — overall vacancy

MEATH

-4,311 — vacant houses

-1,565 — vacant flats

-297 — vacant holiday homes

-69,697 — housing stock

-8.9% — overall vacancy

OFFALY

-2,858 — vacant houses

-544 — vacant flats

-218 — vacant holiday homes

-30,750 — housing stock

-11.8% — overall vacancy

WESTMEATH

-3,480 — vacant houses

-1,141 — vacant flats

-300 — vacant holiday homes

-36,659 — housing stock

-13.4% — overall vacancy

WEXFORD

-5,840 — vacant houses

-1,574 — vacant flats

-6,915 — vacant holiday homes

-68,143 — housing stock

-21% — overall vacancy

WICKLOW

-3,341 — vacant houses

-945 — vacant flats

-1,091 — vacant holiday homes

-54,351 — housing stock

-9.9% — overall vacancy

MUNSTER

-54,958 — vacant houses

-14,120 — vacant flats

-23,807 — holiday homes

-561,532 — housing stock

-16.5% — overall vacancy

CLARE

n5,936 — vacant houses

n1,236 — vacant flats

n4,610 — vacant holiday homes

n55,616 — housing stock

n21.2% — overall vacancy

CORK

-20,123 — vacant houses

-5,864 — vacant flats

-7,342 — vacant holiday homes

-227,675 — housing stock

-14.6% — overall vacancy rate

CORK CITY

-3,342 — vacant houses

-2,766 — vacant flats

-60 — vacant holiday homes

-55,633 — housing stock

-11.1% — overall vacancy

CORK COUNTY

-16,781 — vacant houses

-3,098 — vacant flats

-7,282 — vacant holiday homes

-172,042 — housing stock

-15.8% — overall vacancy

KERRY

-9,860 — vacant houses

-1,657 — vacant flats

-8,202 — vacant holiday homes

-74,747 — housing stock

-26.4% — overall vacancy

LIMERICK

-7,133 — vacant houses

-2,528 — vacant flats

-453 — vacant holiday homes

-82,156 — holiday homes

-12.3% — overall vacancy

LIMERICK CITY

n1,499 — vacant houses

n1,764 — vacant flats

n10 — vacant holiday homes

n26,681 — housing stock

n12.3% — overall vacancy

LIMERICK COUNTY

-5,634 — vacant houses

-764 — vacant flats

-443 — vacant holiday homes.

-55,475 — housing stock

-12.3% — overall vacancy

NORTH TIPPERARY

-3,339 — vacant houses

-509 — vacant flats

-679 — vacant holiday homes

-30,790 — housing stock

-14.7% — overall vacancy

SOUTH TIPPERARY

-3,809 — vacant houses

-571 — vacant flats

-437 — vacant holiday homes

-38,184 — housing stock

-12.6% — overall vacancy

WATERFORD

-4,758 — vacant houses

-1,755 — vacant flats

-2,084 — vacant holiday homes

-52,364 — housing stock

-16.4% — overall vacancy

WATERFORD CITY

-1,787 — vacant houses

-1,454 — vacant flats

-59 — vacant holiday homes

-22,341 — housing stock

-14.8% — overall vacancy

WATERFORD COUNTY

-2,971 — vacant houses

-301 — vacant flats

-2,025 — holiday homes

-30,023 — housing stock

-17.6% — overall vacancy

CONNACHT

-35,964 — vacant houses

-7,041 — vacant flats

-12,232 — holiday homes

-259,726 — housing stock

-21.3% — overall vacancy

GALWAY

-12,204 — vacant houses

-3,160 — vacant flats

-3,457 — vacant holiday homes

-111,177 — housing stock

-16.9% — overall vacancy

GALWAY CITY

-1,887 — vacant houses

-1,685 — vacant flats

-183 — vacant holiday homes

-33,655 — housing stock

-11.2% — overall vacancy

GALWAY COUNTY

-10,317 — vacant houses

-1,475 — vacant flats

-3,274 — vacant holiday homes

-77,522 — housing stock

-19.4% — overall vacancy

LEITRIM

-3,463 — vacant houses

-573 — vacant flats

-1,490 — vacant holiday homes

-18,128 — housing stock

-30.5% — overall vacancy

MAYO

-10,194 — vacant houses

-1,582 — vacant flats

-4,454 — vacant holiday homes

-65,792 — housing stock

-24.7% — overall vacancy

ROSCOMMON

-5,630 — vacant houses

-640 — vacant flats

-1,062 — vacant holiday homes

-31,585 — housing stock

-23.2% — overall vacancy

SLIGO

-4,473 — vacant houses

-1,086 — vacant flats

-1,769 — vacant holiday homes

-33,044 — housing stock

-22.2% — overall vacancy

ULSTER (part of)

-19,104 — vacant houses

-3,766 — vacant flats

-11,801 — holiday homes

-142,685 — housing stock

-24.3% — overall vacancy

CAVAN

-5,325 — vacant houses

-952 — vacant flats

-1,000 — holiday homes

-33,711 — housing stock

-21.6% — overall vacancy

DONEGAL

-11,048 — vacant houses

-2,312 — vacant flats

-10,636 — holiday homes

-83,918 — housing stock

-28.6% — overall vacancy

MONAGHAN

-2,731 — vacant houses

-502 — vacant flats

-165 — holiday homes

-25,056 — housing stock

-13.6% — overall vacancy rate

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