Housing policy may be ‘incentivising’ urban vacancy, Trinity College report finds

Ireland’s planning and development systems are “ill-equipped” to bring vacant and derelict sites back into use, and often perpetuate urban vacancy, a new report from Trinity College Dublin has found.

The Urban Vacancy in Ireland report suggests some State interventions may be incentivising instead of solving vacancy, and calls for the establishment of regional “reactivation” units tasked with bringing sites and properties back into use.

The research led by Dr Cian O’Callaghan found vacancy was a “function of the property and development systems currently in place in Ireland” and is “intrinsically related” to the planning system and property markets. “Indeed, vacancy is often an outcome of these systems ostensibly operating as they are intended to function,” it said.

The report identified at least 15 national governmental and public bodies with oversight for vacancy, but said the State’s planning and regulatory functions can be “siloed or ill-equipped” for bringing vacant and derelict sites and properties back into use, in comparison with more straightforward approval and regulation of new building stock.

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“Local government officials suggested that national oversight of legislation, regulation and best practice for vacancy was lacking or insufficiently integrated.”

The research, which included interviews with local authority staff, planners, and property developers, found the current planning, development and finance models enabled large-scale private sector development and were less equipped to facilitate the use of smaller sites, resulting in “patchwork forms of urban vacancy and dereliction”.

The prospect of land rezoning, among other factors, could incentivise vacancy where a landowner is “awaiting the confluence of favourable conditions to materialise” before proceeding with development as “rezoning can have a significant impact on a parcel of land’s financial value”.

Similarly the anticipation that State investment or future planning and development incentives may increase values encourages landowners to “sit” on sites, the report states. “Thus while vacancy is often viewed as the failure of the planning and development system it is more usefully viewed as the outcome of particular features of this system.”

Initiatives such as vacant or derelict site levies designed to prevent this type of land hoarding, “did not necessarily impact on or deter larger institutional property owners, who were more likely to pursue strategic land hoarding”. Another unintended consequence can be the sale of smaller sites to larger institutional investors “better able to swallow the cost of the levy”, who would “further consolidate their influence over urban land markets”.

The report acknowledges recent initiatives such as the Residential Zoned Land Tax and Land Value Sharing Scheme are attempting to “connect land value and zoning processes”.

Financial models which increasingly saw developers reliant on international backers providing equity finance also favoured larger developments. While a number of State funding schemes had been introduced to incentivise the reuse of smaller sites or vacant individual properties they were not yielding the hoped for results, with interviewees reporting they were often difficult to access.

However, the State investment often provided greater levels of investment than private lenders, with an often limited expectation of ownership or return on investment. “Greater State involvement and investment in the material costs of addressing urban vacancy would need to be matched with additional State capacity and accelerated planning and property acquisition powers,” the report said “for taking over vacant properties or benefiting from public investment”.

The report recommends the creation of regional “reactivation” units which could support local authorities with expertise in tackling vacancy; financial supports for identifiable gaps in funding in addition to “widespread co-ordinated purchase and renovation of vacant sites via local authorities”; and support for local communities to become involved in reactivation strategies.