‘Carrot and stick’ scheme could release 17,000 vacant homes to market

A combination of incentives and penalties could bring a “large chunk” of the roughly 167,000 vacant properties in Ireland back into use, alleviating Ireland’s “chronic shortage of affordable homes”.

The Hardware Association of Ireland, the national representative body for builders’ merchants, DIY retailers and construction materials suppliers, last week outlined a new set of proposals, which it said could bring an additional 6,000 housing units to market each year for the next three years.

Preliminary figures from the census, carried out by the Central Statistics Office (CSO) in April, reported a total of 166,752 vacant homes nationwide, or 7.8 per cent of the housing stock.

However, this number contains many dwellings that may be unoccupied for a relatively short period time and a home deemed vacant does not necessarily mean a home is available for reuse or to house other people, the Department of Finance said last month.

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But citing the CSO data, the Hardware Association said that of the almost 167,000 vacant units, 86,000 have only been unoccupied since 2016, a relatively short time period vacancy”, which may indicate that they are in relatively decent condition.

Of that 86,000, some 49,000 units are located in cities and towns with a population of more than 5,000 and in areas where, in most cases, the price of a second-hand home is more than €235,000.

Excluding the roughly 4,000 homes included in the Fair Deal scheme and assuming a further 25 per cent of the homes are likely to be tied up legally, the association said estimated that roughly 33,778 could be renovated at a reasonable price.

Vacancy tax

If uptake in an incentive scheme was 50 per cent, it means that 16,889 homes could be released to market over the next three years, adding 5,000-6,000 to the national housing stock each year.

To do this, the Government could adopt a “carrot and stick” approach to the issue of empty homes, said Martin Markey, chief executive of the association.

Among other things, a vacant property tax of 6 per cent should be “enacted and fully operational as a priority”, the association’s research paper concluded, with exemptions for exceptional cases.

This could generate up to €600 million, it said, and fund an extension of the help-to-buy scheme to vacant homes that would see first-time buyers of empty properties receive a grant of up to €50,000.

Under the current repair and leasing scheme — aimed at owners of vacant properties who cannot afford to bring those properties up to rental standards — the Government could provide zero-interest loans of up to €60,000 towards construction costs.

“This allowance can be offset against other income in the year when other improvements have been made,” the association said.

‘’Tackling the issue of vacant homes is urgently needed, not just to help solve the housing crisis but also to rejuvenate cities and towns all over Ireland,” Mr Markey said.

“Renovating empty homes has the added benefit of affordability and they have much lower carbon emissions than building a new home. There are fewer planning complications and it can be done a lot quicker than new builds also. We have a huge stock of empty homes just waiting to be renovated, so it is a huge opportunity that we want to unlock.’’