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Housing crisis: Would a system of vacant property receivership work in Ireland?

On Monday 1 July, new amendments to the Planning and Development Act 2000 which aim to curb short-term lettings facilitated by companies like Airbnb, came into force. While these changes are indeed a welcome step forward in tackling the housing crisis, the issue of vacant properties has yet to be solved.

 

Homelessness and vacant properties

The 2016 census indicated that there are as many as 183,000 vacant residential properties in Ireland, down from around 230,000 in 2011. Even though census figures do not take into account temporary vacancies - where a house is between tenancies, for example - these figures are still quite stark in light of the 10,000 Irish citizens who currently find themselves without a home. 

According to figures provided by Focus Ireland, as of May 2019 there are 1,700 families in Ireland availing of emergency accommodation, with some 3,700 children amongst them. While homelessness is a huge issue nationwide, it seems to be most acute in Dublin, with the highest number of rough sleepers at 128. Of the 879 young persons (aged under 25) accessing emergency accommodation, 65% of these are in Dublin. The organisation cites a 72% cut in social housing spending between 2008-2012 as being a key culprit in terms of the origins of the housing crisis. 

While the chronic under-supply of housing stock in urban areas cannot be addressed overnight and will indeed take time to rectify, it is fair to say that the Minister's decision to prioritise re-purposing vacant homes is a good strategy for the short term - especially given that vacant properties outnumber homeless families by a margin of more than ten-to-one.

A new website, vacanthomes.ie has been set up under the government’s Rebuilding Ireland plan to allow individuals to anonymously identify and report vacant homes in their area which may lend themselves to swift re-purposing and re-habitation, provided the owners can be contacted and their consent obtained. The question here is whether a careful approach can be adopted, so as to avoid encroaching on property rights which, as we know, are afforded constitutional protection.

If the issue of vacant property can be adequately dealt with, it would go some way towards alleviating the housing crisis in a shorter space of time than, say, erecting high-rise flats in isolated, previously uninhabited areas. The good thing about vacant properties is that they are usually found in communities where infrastructure is already in place.

 

Vacant property receivership

In his 2004 article, 'Refreshing the Heart of the City: Vacant Building Receivership As a Tool for Neighbourhood Revitalization and Community Empowerment', Notre Dame Professor James J. Kelly Jr. grappled with the issue of vacant residential properties in depth, through the lens of a regeneration programme which aimed to breathe new life into the city of Baltimore following a half-century of decline and population loss.

Kelly notes that while traditional methods of enforcement could indeed coerce owners of vacant houses into renovating them, or transferring them to someone who will, a community-based approach is to be preferred. Indeed, seeing as most of the properties he surveyed were tax delinquent, this method would prove quite efficient. However, he states that utilising the traditional methods of enforcement does not guarantee that the property will be renovated to the extent that it will serve the needs of society.

As such, a tailored approach is needed which would create vacant building receivers who are empowered to sell derelict houses to qualified developers. These developers would then renovate and re-introduce the properties to the market - thus improving the neighbourhood as a whole and adding to the housing stock of the city. In order to ensure market stability, Kelly opines, local governments must seek out and partner with community organisations. He outlines his rationale for this in the following terms:

'In a densely populated city neighbourhood, an owner quickly realises that the return on any improvement that he or she makes to a property will be determined almost entirely by the investment decisions of his or her neighbors in the community... If the building next door is vacant, the resident owner may have to deal with illegal activity... and the cost of the neighbouring property owner's neglect will almost certainly have a greater impact on the properly maintained properties around it.'

 

Conclusion

While this approach may not be feasible in light of the constitutional constraints mentioned above, it would certainly be preferable to a simple vacant property tax in theoretical terms at least. A vacant property tax, unless extremely onerous, may not even deter speculative investors with deep pockets from purchasing large lots of vacant properties without ever intending to renovate them. 

As such, it may be worthwhile considering introducing legislation that would expand the remit of the vacanthomes.ie initiative so as to transform it into a fully-fledged body, capable of liquidating the interest of individuals who hold vacant properties with no intention of renovating and reintroducing them into the national housing stock any time soon.

This would have to be accompanied by a legislative framework for assessing what criteria should be applied in deciding whether an owner's interest in a vacant property can be liquidated. This framework would of course have to tread a careful line so as to avoid being repugnant to the Constitution and as such, any curtailments on property rights would have to be absolutely necessary from a public interest point of view - and of course proportionate.

In any event, with 183,000 vacant homes nationwide and some 1,000 in the capital, any mechanism that is capable of bringing them to market should be considered - especially where the owners have no interest in so doing.

 

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