In the last couple of days I’ve been asked to comment on two issues around property data, both relating to vacancy (though we could easily have a similar discussion with regards to housing completions, homelessness, etc). The first relates to housing vacancy and a report by Fingal County Council that contends that the vacancy levels in the local authority have been ‘grossly overstated’. The second about commercial vacancy and present rates. In both cases it’s difficult to provide strong answers because systematic data collection with respect to both is problematic and the state does not provide official data on either, except on housing vacancy every five years through the census which is a sub-optimal timeframe to be working from.
With respect to housing vacancy. I can’t find the report or press release from Fingal CC, but a story in the Irish Times reports that they believe vacancy levels are well below those reported in the census. It’s difficult to assess fully whether that’s the case without seeing the full methodology or data. What is reported in the IT is:
“The council initially conducted a desktop exercise on the 3,000 supposedly vacant properties. When commercial properties, as well as those in construction or in the planning process, were eliminated the figure fell to 361 properties. ” They then visited 74 of the 361 homes to check on occupancy, though it’s not stated how those 74 were sampled.
Of those 74 visited, they discovered that only 13 were actually vacant. In other words, rather than having a vacancy rate of 5% (as reported in the 2016 census – 4,944 vacant units + 289 holiday homes), they have a rate of about 1% – far below what might be an expected base vacancy level of 6% (there are always some units vacant due to selling, gaps between renting, working temporarily elsewhere, people in healthcare, etc.). I have no doubt in the 18 months since the census in April 2016 properties that were vacant will have been occupied, however it seems unlikely that vacancy is so far below base vacancy, which is what the IT piece seems to be suggesting.
In terms of method it is unlikely that the CSO shared the individual addresses of vacant properties as identified in the census with Fingal. But if they were working from census data then it does not include commercial properties, nor properties under-construction, or in the planning process, or derelict. So removing those properties from census counts would make no sense – they were never counted by the CSO. Indeed, in a rebuttal story in the Irish Times, the CSO stand over their data and method – which is to send enumerators to every property in the country, to visit upwards of ten times if they fail to get an answer, and to talk to neighbours to try and ascertain the use status. I’m assuming that Fingal got their data instead from Geodirectory who source the information on occupancy from postal workers delivering or not mail. How accurate those data are I’m not sure and presumably the company would stand over their fidelity.
Regardless of the method, there is clearly a large discrepancy between what Fingal CC are finding on the ground in their small sample and what the census enumerators found 18 months ago, and presumably what An Post workers are finding. That discrepancy suggests we need a much more systematic and timely way of generating data on housing vacancy. The government have set up a crowdsourcing means to generate vacancy information – vacanthomes.ie – where members of the public can log homes that they think are vacant, which can then be checked by local authority staff. There are well known problems with crowdsourcing such information, including coverage, representativeness and keeping the data up-to-date, and these data certainly could not be used as official statistics. Much more realistic would be a quarterly vacancy survey (much like the quarterly household survey) – probably carried out by the CSO who have no vested interest in local housing/planning data.
In terms of commercial vacancy, the state produces no statistics on the rates of vacancy for offices, retail units or industrial sites. It is a massive hole in our knowledge of the property sector. The only data that are produced are those by Geodirectory (which are limited in detail) or the property sector itself (hardly an unvested party, and the data are a product and can disappear from websites or go behind paywalls, and lack spatial granularity – usually just Dublin/rest of country or regions). In relation to commercial properties there is also a need to understand their characteristics, such as type, spec, condition, location, etc. as well as the size of space vacant, not just how many units. For example, imagine that there are ten units on a high street. Nine of them are 1000 sqm in size and one is 5000 sqm. If the larger unit is vacant then the vacancy rate per unit is 10 percent. However, the vacancy rate by floor area is 35 percent. In other words, one cannot simply look at the absolute number of vacant units, rather we also need to consider the type and size of the units that are vacant. Trying to prepare local and county development plans with a fuzzy knowledge of existing development is a sub-optimal way of conducting planning and can lead to oversupply and property crashes (as per the last 20 years). Like housing, we therefore need good, reliable, timely data to understand the commercial property sector and we need the state to produce them.
In my view, there needs to be a branch-and-root review of property data in Ireland. This needs to start with asking the question: what data do we need to generate to best understand planning, housing, commercial property, infrastructure need, etc? Then to discover where the gaps are and to review the veracity and fidelity and fit-for-purpose of existing data generation and to fix as necessary. This includes assessing whether the data are being generated by the most appropriate generator. We then need to put in place the processes to produce those data.
With good quality data that people trust we might avoid different agencies producing wildly varying estimates of some element of housing or commercial property, such as vacancy rates, and we would greatly aid our planning and economic development. However, if we carry on as we are, we’re going to continue to fly half-blind and only have a partial or flawed understanding of present conditions and we are going to replicate mistakes of the past.
November 29, 2012
Statistical solutions to the unfinished estates problem
Posted by irelandafternama under #Commentaries | Tags: creativity, Data, DECLG, Ireland, statistics, unfinished estates |[7] Comments
Yesterday Minister Jan O’Sullivan published the 2012 National Housing Development Survey. The headline story from this is that the number of estates categorised as unfinished has fallen from 2,876 in 2011 to 1,770 in 2012, and that decisions will be taken in the new year on which estates are commercially unviable and need to have parts of them demolished (especially in the midlands and border region).
Along with the report, the Department of Environment also published the data they used in the report in three separate files comparing counties, profiling individual counties, and profiling individual estates.
So, have the number of unfinished estates fallen by 1,106 and is the problem of unfinished estates receding?
Technically, yes. But this is where I link to the title of this post. The drop is principally because the DECLG have changed the definition of an unfinished estate. The definition used in 2010 and 2011 refers to estates that have issues of vacancy and oversupply as well as outstanding development works. In 2012 the definition refers only to estates where there is outstanding development work. At one level, this change makes sense. The 1,770 estates that need development work are the most problematic. At the same time, the issue of vacancy and oversupply has not gone away, affect the overall market, and have consequence re. anti-social behaviour, sense of place and community, etc. Indeed, on the old definition the number of estates surveyed rose in 2012 to 2,973.
This is not the only bit of being creative with the numbers. Oddly, the figures both work for and against the government.
For the government
Overall occupancy: the overall level of occupancy in unfinished is reported as 91,692 – this is occupancy across the 2,973 estates surveyed not the 1,770 we’re told now constitute unfinished estates. It is useful to have the data for the 2,973 estates but it also needs to be reported specifically for the 1,770.
Complete and vacant units: the overall level of vacancy is reported as 16,881, down from 18,638 in 2011 – again this is refers to the 2,973 estates surveyed.
Vacancy per county: the report provides a table and map of vacancy per 1,000 households for each county. This actually refers to vacancy in unfinished estates, not overall residential vacancy in a county. Making sense of vacancy in unfinished estates needs to be contextualised with respect to overall vacancy and oversupply, not simply the number of households. The housing market is not simply unfinished estates and the data as presented is misleading.
Against the government
Services: In the comparing counties data file the reported figures for services are all shockingly bad. Across the 2,973 estates (again there is no specific data for the 1,770) 57% of units have incomplete roads, 40.1% have incomplete paths, 42.5% have no lighting, 41.1% have no potable (drinking) water, 39.3% have no storm water drainage, 41.3% have no water waste (sewage), with 91,693 families living on these estates. Actually these figures are grossly overstated because of how they are calculated and the numbers are much less. They have been calculated against all housing units that had original planning permission, not those that were started. There are two problems here. First, planning permission has expired for 24,864 units, second why calculate for units that don’t exist? The fact that 60,055 phantom houses don’t have potable water, and these are included in the rate of units that don’t have potable water, doesn’t make any sense. The rates are actually much smaller, though nonetheless are a significant problem on many estates.
What are my headline stories from the report?
I have two main observations from the report. The first is that 1,100 of the estates are in a ‘seriously problematic condition‘. Families in these estates are living on building sites. Second is that only 250 estates (8.5% of 1,770) are active – that is, the developer is on site and is undertaking works. In 2010 it was 429, in 2011 it was 244. That means that 1,520 of the estates that require development work are not in receipt of it and given that developers have gone bust they are not likely to receive it in the short to mid-term. The number of underconstruction units in 2011 was 17,872 and in 2012 it was 17,032. All but 38 of the reduction is ‘nearly complete’ units being fitted out. Anything half-built is staying half-built. In the vast majority of cases then, unfinished estates are being left to wither on the vine, the great majority of which are in a ‘seriously problematic condition’.
To be fair to Minister O’Sullivan she fully recognizes these issues. On the other hand, the actions of the government are painfully slow, some would say pathetic. As we’ve argued before, the policy of Site Resolution Plans (SRPs) is a minimal cost, minimal effort approach to unfinished estates that give the impression of policy-at-work, but is really a sticking plaster that tries to stop a problem getting worse before the ‘surgeon’ in the form of the market re-appears to fix things. In the present and foreseeable property market that ‘surgeon’ is not going to appear any time soon. In the meantime, families are left living on developments that are substandard with huge negative equity that locks them in.
Five years after the property crash started to plummet its time unfinished estates problem was tackled properly, rather than simply messing about with the numbers. That’s not to say the numbers are not important – we need to know what is going on (preferably with non-creative and meaningless data) – but what we really need is action for the families living on these estates.
Rob Kitchin
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