Vacant property acquisitions scheme delivers just 900 units

Just over 900 properties had been acquired by the Government’s Housing Agency Acquisitions (HAA) fund as of May this year, against a 2021 target of 1,600, according to Department of Housing.

The €70 million fund was established in 2017 with the aim of acquiring vacant property portfolios from banks and financial institutions that could then be used for social housing.

The target for the HAA fund was to acquire 1,600 units over a four-year period to 2020. However, this target was subsequently extended out to 2021.

However, according to data provided by Minister for Housing Darragh O’Brien in response to a parliamentary question from Sinn Féin’s Eoin Ó Broin, 904 properties had been acquired under the HAA fund as of May of this year.

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Mr O’Brien said a further 52 properties were delivered under the HAA fund programme but bought directly by local authorities using capital funding through the Social Housing Capital Investment Programme.

The Minister also noted that the Housing Agency also completed the acquisition of 606 properties while acting on behalf of local authorities.

Mr O’Brien said his department had conducted a review of the HAA in 2022, which identified a number of challenges faced by the fund, “the most significant of which is the reduced availability of suitable units from banks and equity funds.”

“This is primarily due to the sale of non-performing loans to non-banking entities and changes in now non-performing loans are being dealt with,” he said.

“The review also explored opportunities that centred on potentially repurposing the fund to support other initiatives within Housing for All,” he said.

Mr O’Brien said the recently introduced Cost Rental Tenant in situ Scheme introduced earlier this year as interim measure to protect tenants at risk of being evicted was being supported by HAA funds. This temporary scheme is administered by the Housing Agency and supported by €10.25 million from the HAA Fund, he said.

Nonetheless the failure of the fund to achieve its target was criticised by Deputy Ó Broin.

“While this scheme had great potential, like so many other Government schemes, bad design and excessive delay meant it chronically under performed,” he said.

“There were simply too many barriers to getting possible sales through the process quickly enough for purchasers,” Mr Ó Broin said.

“The lesson to be learned from this failure is rather than create an ever-increasing number of poorly designed and hastily implemented schemes, focus on getting local authorities and approved housing bodies (AHBs) to build and buy the homes directly. Less bureaucracy and red tape would result in more homes being delivered,” he said.

Revenue, meanwhile, has identified some 25,000 homes that could be subject to the Government’s new Vacant Homes Tax (VHT).

The new annual tariff seeks to bolster housing supply by encouraging homeowners to return vacant properties to the market.

In the budget, Minister for Finance Michael McGrath lifted the rate at which the self-assessed tax applied from three times the Local Property Tax (LPT) to five times amid criticism the original rate was too low.