There has been some recent talk in the Dail and the media about the extent to which Ireland’s vacant housing stock could solve the social housing waiting list and save the state half-a-billion euros worth of rent supplement payments per annum. To what extent is this wishful thinking?
In principle it looks like vacant housing stock should be the answer to the social housing waiting list. There are 98,318 households on the waiting list and 230,056 housing units vacant in the country (excluding holiday homes) according to Census 2011. However, both figures are composed of a variety of types of household and housing units that deny a simple matching up.
The 98,318 households on the waiting list are composed of the following categories: 65,643 persons unable to reasonably meet the cost of the accommodation they are occupying; 9,548 persons in need of accommodation for medical or compassionate grounds; 8,534 persons sharing accommodation involuntarily; 4,594 persons living in overcrowded accommodation; 2,348 homeless persons; 2,226 older persons; 1,824 Travellers; 1,708 persons living in accommodation that is unfit or materially unsuitable; 1,315 persons with a disability; and 538 young people living in institutional care or without family accommodation.
The 230,056 vacant housing units consist of 18,638 unsold, vacant units on unfinished estates owned by developers or banks, a few thousand unsold, vacant one-off houses, and c.200,000 units in private ownership that consist of units presently for sale or available for rent, empty bereavement properties, vacant investment properties, units where owner is in long-term nursing care or retirement home, or empty due to short-term or long-term migration. In addition, there are another 8,794 nearly complete units and 9,078 under-construction units on unfinished estates.
On the one hand then, we have 65,643 people in suitable accommodation which they can’t afford, along with 13,129 people (medical condition, disabled persons, older persons) that need specialist or sheltered accommodation. On the other, we have a stock of vacant units that are universally in private hands (either owned by an individual or a company), are not designed for social or sheltered housing, and are often in places unsuitable for social housing tenants (they lack public transport, social facilities and access to employment). A small proportion of this vacant stock are in unfinished estates and these are owned by developers and banks, only a small proportion of whom are in NAMA (a large number of unfinished estates were funded by foreign-owned banks). The means for the state to presently access this unfinished estate stock is the Social Housing Leasing Initiative.
Put simply, vacant stock is privately-owned (even in cases where the loan is with a state bank or NAMA) meaning there are only two options with respect to moving people on the social housing waiting list – move them into other private accommodation reliant on rent supplement or into private accommodation reliant on the social housing leasing initiative. Neither is going to save the state much money as the state does not own the property and does not have any excess stock of its own. Moreover, the latter will leave empty private rental stock in its wake whose buy-to-let mortgages will start to default, placing more pressure on the state-guaranteed banking sector. In other words, vacant stock is not the answer to the social housing waiting list; it’s just moving people around privately owned stock.
Ultimately, the only solution to the social housing waiting list is for the state to build or buy social housing units, or to accept that the 65,643 private rental sector units that are presently unaffordable for tenants is de facto social housing stock held in private hands. The only solution to vacancy is household growth, so that supply and demand equalise.
Rob Kitchin (@robkitchin)