Reframing the role of vacancy in post-crash Dublin

This is a longer version of a talk given at the Developing Dublin event as part of Trinity and the Changing City Lecture Series

Introduction

It is a necessary and a timely moment to take stock and reflect on the transformation of Dublin’s built environment.This is not something we do very often. Indeed, with the exception of the period following the 2008 crash, Dublin has been redeveloping faster than we can critically reflect on these changes.

One of the themes we are asked to reflect on here is the juxtaposition of new development with persistent areas of vacant and unused buildings and land. As I will discuss, vacancy became visible and politicised in the period after the crash. A range of different actors have proposed interventions and solutions, which reflect different development priorities. However, over the last number of years, levels of development have once again accelerated – large areas of undeveloped land have been intensively redeveloped. But in doing so, a lot of the possibilities for rethinking what makes Dublin a liveable city have been diminished. And we are once again in danger of reducing the city centre to a commercial space.

I want to briefly discuss here is how looking at debates about vacancy and what has happened to vacant sites in Dublin over the past ten years can tell us about how development priorities have been shifted over this period.

I want to outline three main points here:

1. Firstly, to discuss some of the reasons why urban vacancy became visible and a priority for different sets of groups after the crash, but visions for solving this problem presented very different urban futures.
2. Secondly, to argue that we need to move away from simplified views that see a dichotomy between urban space that is in use (or being redeveloped) and space that it “unused”. Rather we need to consider the ways in which vacancy is part of urban property markets and move towards understanding the reasons why buildings and land remains vacant and how it transitions to what is seen as “appropriate” use.
3. Finally, to suggest that the set of actors involved in planning and development and their priorities have dramatically shifted since the crash. And that urban policy may no longer be able to deliver on its objectives in the same way, and therefore requires some rethinking.

The challenge and opportunity of vacant spaces

Vacancy was a major part of the narrative about Ireland’s crisis. The ‘ghost estate’ was perhaps the most iconic image representing the crash of the Celtic Tiger property bubble. But the discussion soon extended to the vast tracts of vacant land in Dublin city centre. This included the very visible ruin of the Anglo Building in Dublin’s north docks. Anglo’s role in the banking and property crash is well known and many identified the symbolic potential of this prominent ruin as a site to memorialise the collective failures that led to the Celtic Tiger’s crash. With hindsight, it is easy to forget how much of a shock the crash of the Celtic Tiger was in 2008. This was not only economic but also deeply social and psychological collapse of meaning. As a symbol of the property crash, unfinished and vacant developments became a site from which the public could reflect on the policy failures of the development system, while also presenting an opportunity to rethink how we might do things better in the future. Proposals for the Anglo building included those by architect Paschal Mahony to create a vertical park out of the shell of the building – intended to reclaim a symbol of speculation and greed as a public civic space. This didn’t happen. The Anglo ruins were ultimately built upon and became the new home of the Irish Central Bank.

The Anglo Ruins

This example is indicative of the trajectory of vacant spaces and development priorities over the past decade – the possibilities to use sites of vacancy to produce new public spaces, cultural and social activities, and plan for housing affordability gave way to the reassertion and deepening of highly commercial development objectives.

The Dublin City Council Development Plan suggests that vacancy is both a “challenge and an opportunity” for the city. This reflects, on the one hand, the problems of vacancy identified by planners, while on the other hand, it responds to a set of bottom up responses that emerged following the crash. These were diverse in nature – including the use of vacant land for urban agriculture and community gardens, empty buildings given over to cultural uses for cheap rents, and more explicit temporary use projects such as pop-up parks. But what they had in common was a desire to use the resource of vacant spaces for activities ordinarily not possible within a highly commercial city. Moreover, these projects often sought to lead by example and show how alternative forms of urban living were possible.

Policy makers responded in turn to these bottom-up activities by promoting the vibrancy of temporary use activities and creating soft policy measures to encourage such projects. It was proposed that re-using vacant spaces would add to the cultural and social life of the city in the absence of wider development. At the same time, DCC pioneered the vacant land levy as a way to combat land hoarding and kick-start redevelopment. From this perspective, alternative projects to re-use vacant spaces were seen as a mechanism to reignite the entrepreneurial approach to urban development. The assumptions of this policy approach are that, through a combination of good planning and urban design, the local authority can work with the private sector to redevelop the city in ways that promote economic growth at the same time as creating vibrant places.

However, at the same time as this was happening the financial policies responding to the crisis – in particular the setting up of NAMA – brought in a whole new set of development actors to Dublin. As bottom up responses were piecemeal creating alternative visions of the future of Dublin, and DCC were aiming to incorporate these initiatives into their policy approach, these new actors were laying the ground to dramatically transform the city at an unprecedented speed. These financial actors also had a vision for vacant space, albeit very different from the others.

When the loans from the major Irish banks were transferred to NAMA, the agency ended up controlling significant amounts of empty buildings and vacant development land. In the docklands SDZ, for example, NAMA controlled around 85% of development land. This vacant land was synonymous with “distressed debt” and was transferred from NAMA at a heavily discounted price to international private equity funds, Real Estate Investment Trusts and other financial actors. Vacancy for these actors represented an opportunity to resolve the property crash by connecting local real estate to international finance. As has become apparent from the character of new developments in the last number of years, these financial models are dependent on maximising rental yields. Consequently, more marginal cultural uses, often those adding vibrancy to areas in the interim period, have been squeezed out.

NAMA, through its receivers, for example have been instrumental in removing such cultural spaces as the skatepark Mabos in Grand Canal Dock and The Complex Theater in Smithfield – both projects promoted by DCC for the cultural vibrancy they added to their respective areas.

In this way, as the property market returned the possibilities of vacant spaces have diminished as increasingly commercial demands are put on space. But what this also shows, is vacant space presented very different challenges and opportunities for the different sets of groups. The contestation over the future of these sites was indicative of what kind of city Dublin would become.

 

Vacancy is part of urban property markets

Discussions about the “problem of vacancy” often tend to frame the issue in simplified ways. “Vacant” buildings and land is juxtaposed to land that is “in use”, giving the impression that these buildings and land are simply abandoned by their owners. As vacancy has become more visible, responding to the problem has become central to policy at the local and national level. But these policy interventions have suggested that we do not understand vacancy and the reasons for it very well.

The discussion from a policy perspective is often around overcoming barriers to bringing vacant spaces back into use. However, urban geographers – particularly those researching gentrification – have long shown how vacancy is an integral part of functioning urban and markets. Vacant buildings and land are used as part of investment strategies that can have shorter or longer time horizons. In this regard, it is not simply about what is “in use” or “not in use” – rather the underlying development pressures on urban land markets may heavily determine what are “appropriate” types of use.

Activist campaign highlighting vacant buildings

Landowners may be keeping land vacant to speculate on future price rises or to put together the conditions for a larger, more ambitious, development. Similarly, there are numerous reasons why houses might be vacant. Alternatively, in secondary cities vacancy may persist because of a lack of investment opportunities. However, buildings and land are rarely simply “not in use”. It is not sufficient to seek to put vacant spaces into use through urban regeneration. This leaves us with blind-spots in two respects:

Firstly, it fails to acknowledge the kinds of social uses that under-developed land and buildings might already be fulfilling, and it fails to ask questions about what kinds of social uses these spaces will provide following regeneration.

Secondly, it fails to account for the ways in which vacant land and buildings are already in use in an economic sense – that vacancy can be an investment strategy. It therefore fails to grapple with the real causes of vacancy and its relationship to the types of urban transformation taking place.

Addressing these questions may offer a more nuanced way of considering what our development priorities should be. The need for such an approach is clearly illustrated by the trajectory of post-crisis developments in the city.

The new urban growth machine

Dublin’s economic recovery has been highly unequal. The city is facing a range of problems. Two of these are in relation to housing and cultural spaces in the city.

Rents in Dublin have risen by 65% since a low point in 2010. Combined with a lack of new supply and an intensification of the commodification of housing, this has resulted in a homelessness emergency driven by evictions from the private rental sector. Figures from Nov 2018 had 1296 homeless families (with 2816 children) in emergency accommodation in Dublin. Neither does this include the many more people living in insecure housing conditions due to the volatility of the housing market and the lack of public sector intervention.

Meanwhile, there is growing concern among the cultural sector about a serious dearth of arts infrastructure in the city. Spaces of cultural production, which could support and nurture new graduates as well as established artists, flourished following the property crash. But these spaces have been progressively squeezed out. And it is becoming increasingly difficult to see where these spaces can be fit into new types of redevelopment. Without more formal and sustained interventions, the city will become a desert incapable of supporting cultural and artistic life.

Both of these problems can be seen as the outcomes of opportunities lost in the response to the crisis. The crisis presented a fundamental challenge, but it also offered an opportunity to reflect on and rethink our approach to development.

Given the role of property and housing in particular in the Celtic Tiger bubble, there was an opportunity to learn from those mistakes and rethink our approach to development. Despite clear failures of a market-driven approach to housing delivery, we have continued down this path. Moreover, NAMA as the biggest landowner in Europe at one point, was an opportunity for the state to create a strategic land bank, which could be used to deliver housing and other key infrastructures.

Likewise, the bottom-up potential demonstrated by the cultural spaces that flourished after the crash both showed the extent to these activities had been excluded during the property boom and the vibrancy that they could add to places and communities. But despite the recognition of this by policy makers, there were very few measures put in place to enable these activities to be sustained beyond an interim period.

These problems can be understood with regard to two interrelated factors.

Firstly, the set of development actors in Dublin has shifted substantially following the crisis. NAMA became a major new player in property markets, reducing the role of the local authority. And through the sale of their portfolio, the agency has overseen a huge transfer of development land to a new set of international financial actors. This has both concentrated land ownership and changed the way developments are financed and how they are expected to perform.

The model of these international financial actors is to ensure a growing rental stream to satisfy shareholders and investors. This puts increasing commercial pressure on the use of urban space. And it makes it more difficult to include uses like affordable housing or cultural space – neither of which generate the desired profits.

Secondly, what these problems show is the failure of existing policy approaches to adapt to these changing conditions. The basic assumptions of the entrepreneurial model that has guided urban development since the 1980s is that by combining good planning and design with private sector partnerships, we can create vibrant new urban landscapes. But there is increasing gaps between policy objectives and the types of development that is occurring.

Dublin City Council’s development plan, for example, puts great emphasis on cultural activities. But an area like Smithfield (which had been identified as a cultural hub) has lost much of its cultural vitality in the most recent phase of redevelopment. Artist groups, worried about the scale and speed of redevelopment, have been lobbying for state agencies to intervene to ring-fence land and buildings for arts infrastructure.

The SDZ for the docklands was presented as an opportunity for “joined up planning” and aimed to be “a model of sustainable inner city regeneration incorporating socially inclusive urban neighbourhoods”. This included an emphasis on making it a neighbourhood for families to live. However, as was reported in the Irish Times last week just 26 social homes have been provided “out of 1,178 apartments granted permission to date”. And the oversight body expressed serious concerns that there would be a drastic shortfall on the statutory minimum of 10% required.

New developments in Grand Canal Dock

Conclusion

In the Dublin of 2019, development is once again happening at a rapid speed. We rarely reflect on the scale of transformation and what can be lost in the process. But we need to do better at this. The lessons that we can learn from the debates about vacancy following the crash and the trajectory of the city’s vacant spaces can help us see the causes of current problems and intervene to mitigate those that are coming down the line.

The gap between policy objectives and development realities shows the need for more serious and targeted forms of intervention. There is a clear argument for public land being ring-fenced for public uses in the context of current development pressures – for housing, for culture and other common goods. Left to the market these common goods will disappear and we will be left with a lucrative but unlivable city.

But there are opportunities to at least stem the tide of such changes. We can really learn from the mistakes of the Celtic Tiger period and reassert the role of the public city.

Cian O’Callaghan

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We still need better property data

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.

Rob Kitchin

 

The relationship between population change and housing vacancy in Ireland

The prelim results for Census 2016 make it clear that housing vacancy continues to be a serious issue in Ireland.  Given that new housing units grew by only 18,981 to 2,022,895 and population grew by 169,724 to 4,757,976m between 2011 and 2016, one might have expected vacancy to have fallen substantially.  However, housing unit vacancy fell by only 29,889 to 259,562.  Of these 61,204 are holiday homes (HHs), a slight growth of 1,809 from 2011.  On a base level vacancy of 6%, oversupply is 76,984.

Vacancy and oversupply varies geographically as Map 1 demonstrates.  Excluding holiday homes all but three local authorities – South Dublin (4%), Dún Laoghaire-Rathdown (5.7%) and Fingal (5.3%) – having vacancy rates (exc. HHs) above base vacancy.  In several cases housing vacancy (exc. HHs) is running above 10% and four local authorities have rates above 15%.  The issue is particularly acute in the north west.

Map 1: Housing vacancy (exc. HHs) in Ireland

One might expect that the vacancy rate has been declining everywhere, but this is far from the case.  In fact, vacancy has been rising in many EDs.  In Figure 1, each dot is an ED, with each dot above the line representing an increase in vacancy (exc. HHs).  In some cases the increase is quite dramatic.

So, the question is what has led some EDs to increase in vacancy?  Some of it is obsolescence – in any housing market 3-5 properties drop out of use in a year.  Some of it might be properties under-construction and on unfinished estates being completed (and thus counted) but are not yet occupied.  And some of it will be related to population change and migration.

Here, we want to look at the latter since a large number of EDs lost population between 2011-2016, especially those in rural areas (with towns in rural counties growing).

Map 2 shows population and vacancy (exc. HHs) categorised into four classes.

1. (light blue): population decreased and vacancy decreased (687)
2. (blue): population decreased and vacancy increased (705)
3. (red): population increased and vacancy decreased (1497)
4. (light red): population increased and vacancy increased (517)

The relationship we would expect would be classes 2 and 3 – where population decreased, vacancy increased, and where population increased, vacancy decreased.  And that happens in 2022 EDs (out of 3406).  However, in 1204 cases (c. a third), something odd happens: as population increases, vacancy increases (517 cases), or as population decreases, vacancy decreases (687 cases).  In the case of the latter this might be explained by obsolescence and household fragmentation.  We would be interested to hear of other possible explanations.

Without further analysis it’s not possible to determine the causes of this inverse relationship.  However, what the data does show us is that how housing vacancy is unfolding is not universal and there are different social and spatial processes at work.

Rob Kitchin and Martin Charlton

 

Displacement in Dublin – some thoughts on Airbnb, vacancy and the preliminary census

Much of the coverage concerning the preliminary Census release from yesterday has focused on vacancy. This has meant distinguishing between those housing units classed as holidays homes in each area and units that are ordinarily vacant. One of the more puzzling statistics to emerge from this distinction is the 190% increase in the number of holiday homes in Dublin city since 2011. In that year, there were 322 vacant holiday houses in the city but those rose dramatically to 937 in April’s census.

What might account for this near trebling in five years? In particular why, in the middle of a housing shortage, is there almost twice as many housing units classed as holiday homes in a dense urban area when compared with five years previously? Speculation with some others on twitter concentrated on the possibility of these being AirBnB properties. I decided to put some focus on this explanation to see if there’s any truth to it.

In recent months there has been a number of online features concerned with how AirBnB (a company which matches bodies with beds across the world) might be affecting rents. If people are renting their city property through AirBnB for much of the year, how might this affect people seeking to live and work in the city full time? For example, in a number of North American cities there are concerns that full-time AirBnB rentals are displacing residents (e.g. see here or here) who are in lower paid jobs and subject to ever-increasing rents. Some city authorities are coming under pressure to restrict the use of full-time rentals through the company. A property owner can make far more renting out short term lets to passers-by than s/he can from locals who are seeking merely to continue living in a city they work and have a life in.

There is a vital politics to this displacement where AirBnB rentals are pricing people of lesser means out of particular areas of a city bustling with tourists. It is an extreme example of gentrification by displacement, almost making the popular term redundant in its bluntness. The uneven geographies of AirBnB rentals hits home for many in this city too.

In Dublin in June, the city council raised the prospect that full-time AirBnB rentals in Temple Bar, a particular zone of intense tourist activity, would be subject to planning permission. The Council argued that a particular property in the neighbourhood was effectively a material change of use from residential to commercial. It insisted of course that this ruling was “site specific” and did not cover the entire Temple Bar area. The prospect of an imposition of a change of use for the area as a whole is remote though: this seemed like a shot across the bow.

Luckily for us, InsideAirBnB allows us all access to data for rentals across a large number of cities to determine if the company is facilitating displacement. I took the January 2016 data from this site and, aside from knowing the first names of each of the renters, the database contains a number of interesting data.

There are 3,772 properties in the AirBnB database in the four local authority areas. Of this number, 3,116 (83%) are in the Dublin City Council area. 1,222 or 39% of this subtotal are for rent, according to the dataset available under Creative Commons, for 300 days or more per year. The heatmap below (Map 1) shows that near-year long rentals are broadly clustered within the Temple Bar, Cow’s Lane and north Docklands areas. Those rented 365 days per year (249 properties) are distributed slightly differently. They are by no means overlooking the splendour of Dublin Bay.

Map 1: a heatmap of the 1,222 properties available for 300 days or more on AirBnB. Data: InsideAirBnB and OSM contributors.

They are scattered across the city with some clusters in Drumcondra, Rathmines and Portobello. Map 2 below shows the distribution of these year-long AirBnB properties across the Dublin City area, Map 3 shows the distribution of entire house/apt available for rent for 300 plus days a year (as opposed to a room in an already occupied dwelling).  It is not beyond the realm of possibility therefore that the >300 days per annum rentals in this database includes a figure of 937 holiday houses recorded in the census. In fact, there are 934 properties rented out for 335 days or more per annum in the database. If you spent the month of December in your own city centre apartment, and rented it out for the remaining 335 days of the year, you might well be among the 937 recorded in the Census.

Map 2: Year-long AirBnB rental properties (n=249) in the Dublin city area. Data: InsideAirBnB and OSM contributors.

Map 3: 300 plus days per year of entire housing unit /apartment for rent on Airbnb. Data: InsideAirBnB and OSM contributors

But this is a numbers game. We’ll have a better sense of the distribution of the city’s holidays homes when the more extensive data release begins in April 2017.

Eoin O’Mahoney

 

 

Why does Dublin City have 21,781 vacant units?

For the past couple of years the housing discourse for Dublin city has been one of housing shortages and a homeless crisis. The preliminary census figures published yesterday reveal that while the vacancy rates (exc holiday homes) for South Dublin (4%), Dún Laoghaire-Rathdown (5.7%) and Fingal (5.3%) are below a base vacancy level of 6% (in a ‘normal’ market we would expect c.6% of stock to be vacant due to selling/rental gaps, deaths, etc), suggesting that they have housing undersupply, Dublin City Council has a vacancy rate of 8.6% (exc. holiday homes).

In total DCC has 21,781 vacant units (20,844 exc holiday homes).  On a base vacancy of 6% (14,544 units) that suggests an oversupply of 6,300.

In other words, there is something pretty odd going on given the homeless rate has been increasing, large numbers are on the housing waiting list, and there’s a widespread belief that the city desperately needs to build housing.

So, what constitutes these 6,300 excess vacant units?

It’s somewhat difficult to know without visiting them and doing an on-the-ground survey, but let’s start with looking at the geography of vacancy in DCC.  Map 1 shows the % vacancy in the city minus holiday homes, and Map 2 shows change in the number of vacant units since 2011.

Map 1: DCC vacancy rates (exc holiday homes)

 

Map 2: DCC vacancy change 2011-16

In Map 1, all the areas not shaded pale yellow has a vacancy rate (exc. holiday homes) above 6% base vacancy.  Much of the city centre and to the south have rates above 10%, and two EDs have rates above 20% (Mansion House B, Pembroke West B).  In Map 2, the blue areas have seen vacancy rates decline between 2011 and 2016, whereas red areas have seen an increase.  Interestingly, a number of areas have seen quite large increases in vacancy, especially within the canals near to the city centre, Ballsbridge and Rathmines.

Here’s some speculation as to what constitutes the excess vacancy:

• some unreported airbnb/similar stock;
• some second homes (used during week, but primary residence recorded as somewhere else);
• some investment stock left empty;
• some bedsits not yet converted after change in regulations that made them illegal;
• some inner city obsolescence.

I’d be interested to hear about other possibilities.

Whatever the reason for the vacancy, it appears that this stock is not presently available to the market and therefore there continues to be a shortage of housing in the capital.

Rob Kitchin

 

The closure of the Brú Aimsir homeless service and the triumph of the vacant city

The closure of two emergency homeless services

Today came with the news that two emergency accommodation services for homeless households in Dublin are set to close within the next two weeks. As reported by Kitty Holland, these closures could result in over 140 people returning to rough sleeping on the city’s streets. John’s Lane West is a 42 bed emergency accommodation facility operated by Focus Ireland and the Peter McVerry Trust (PMVT) and Brú Aimsir is a 100 bed emergency accommodation facility operated by Crosscare. Both services are commissioned, funded and coordinated by Dublin City Council (DCC) as the lead local authority on homelessness in Dublin.

Brú Aimsir was opened as part of the Cold Weather Initiative for 2015/16 and has been in operation since November 2015. While the Cold Weather Initiative has been going for a number of years, political pressure was ramped up last year following the death Jonathan Corrie in December 2014.

John’s Lane West has been in operation as part of the Cold Weather Initiative of 2014/15 to provide additional emergency accommodation, though it was originally intended to be a temporary measure.

The 42-bed John’s Lane West facility now needs to close due to planning permission obtained by Focus Ireland to build 32 social housing units on the site running out in December 2016. A planned exit strategy for the users of this facility is being led by the Dublin Region Homeless Executive (DHRE), PMVT and Focus Ireland.

The decision to close Brú Aimsir, however, rests with the Chief Executive and Board members of the Digital Hub, who own the premises in which the emergency accommodation is located. The service was due to close in April. But with the homeless crisis showing no signs of abating, DCC were hoping that they could negotiate the retention of the use of the building over a longer period. In spite of appeals made by the DHRE to retain the use of the building, the Digital Hub has chosen not to renew the lease. Moreover, it appears that they have done so without any new use planned.

Brú Aimsir will disappear and be replaced by a vacant space.

The housing and homelessness crisis

The alarming rise in homelessness over recent years has been well documented. It is particularly acute in Dublin. Data from the DHRE confirmed that 5,480 adults accessed homeless accommodation in 2015. Of these, nearly four out of ten adults were new to homelessness. During the reference week of 21 to 27 March 2016, a total of 2,750 adults were accommodated in homeless services in Dublin (1,510 men and 1,240 women).

As the DRHE and other activist groups have detailed, this has entailed new types of family homelessness. Many of these new homeless are the result of economic evictions from an increasingly expensive private rental market. Given the dearth of market provision and options for alternatives, growing numbers are being accommodated by DCC in commercial hotels in lieu of access to formally commissioned emergency accommodation facilities from non-profit organisations.

For that reference week in March, 598 families (comprising 810 adults and 1,242 children) were residing in commercial hotels in Dublin.  A total of 839 families (comprising 1,132 adults and 1,723 dependent children) were accommodated in in privately owned emergency accommodation.

In total, 4,473 persons (2,750 adults and 1,723 child dependents) were residing in all forms of homeless services in Dublin in March 2016. And of these, over 45 percent were residing in commercial hotels.

This is a hugely expensive form of emergency accommodation provision. From a total expenditure outturn by DCC of over €70M on homeless services in Dublin in 2015 over €16M was spent on commercial hotels alone. This cost can be expected to double to over €30M in 2016. Apart from this cost being unsustainable, commercial hotel use is considered an unsuitable and inappropriate form of provision. It is occurring, according to DCC, in order to prevent any homeless family from having to sleep rough.

 

Brú Aimsir

In late March I paid a visit to Brú Aimsir along with a colleague from Maynooth University.  We wanted to learn about the policy measures being put in place to deal with the escalating crisis of homelessness in the city.  But we were also interested in this particular initiative in as an innovative reuse of one of the city’s many vacant spaces.

In April 2015, Dublin City Council estimated a total of 61 hectares of vacant or derelict space within its boundaries. In the period since the crash a range of policy and bottom-up actions have been rolled out that seek to implement innovative strategies to activate and reuse vacant spaces for new purposes. Prominent examples like Granby Park have been mobilised to promote Dublin as a vibrant and creative city.

Brú Aimsir has been a more low-key intervention than some other examples of the reuse of derelict space – advertising the city’s homelessness crisis doesn’t really fit well with an entrepreneurial agenda.  Yet, in its operation it offers an excellent example of an innovative and socially beneficial use of urban vacant space. Dublin City Council have spent over €1 million on rehabilitating a vacant warehouse into a bright, safe, and comfortable space for 100 of the city’s most vulnerable inhabitants.

We visited Brú Aimsir at about 7pm on a Tuesday, just as the service was about to open. The evening was warm and the atmosphere was relaxed as residents, patiently waiting to enter, chatted in small groups outside.

The emergency accommodation facility is used by single adult individuals rather than families, and caters for those at risk of rough sleeping.  In contrast to new family homelessness, this cohort might be viewed as representative of more ‘traditional’ homeless populations.

Those waiting to enter that evening were diverse in age, nationality and gender. Anonymous men and women with backpacks who might be seen traversing the city throughout the day.  They could be students, office workers, or service staff coming to and from work. They too are the hidden homeless, the casualties of an increasingly vicious housing system hiding in plain sight.  And it is to places like Brú Aimsir that they come in the evening for some respite.

The on-street entrance belies the large space behind.  It comprises a locker area (where residents can deposit personal belongings and valuables) a large, bright open communal space (which is colourfully decorated and pleasantly furnished with seating areas and a counter serving hot food), toilets, showers, and male and female sleeping areas.

The emergency accommodation facility has 60 male beds and 40 female beds. These are split into different sections, with female residents upstairs and male residents in two corridors off the communal space, and comprise of 3-bed or 2-bed rooms.

The staff members on duty told us that residents are encouraged to view it as their own space. They are responsible for keeping the own rooms, common areas, toilets and showers clean and tidy. As food is served throughout the evening, residents have more autonomy as to how they structure their time.  As we sat in the communal area, they came and went at an easy pace, with some going to their rooms to rest for a while, coming back later to eat or talk to other residents and staff.

The service has a policy of booking residents in for a minimum of 7 nights, which also provides an opportunity for more substantive forms of intervention.  In this regard too Brú Aimsir has proved extremely successful, in that higher numbers of residents have moved on to more stable accommodation than in other forms of emergency accommodation.  One of the duty managers, who has worked in homeless services for many years, and by his own account in almost every hostel in the city, told us that this is by far his most positive experience working in homeless services.

The few hours we spent there were quit, calm, and devoid of any sign of tension.  Created out of nothing but a void in the urban fabric, both the space and the model appear to be a success story in a dismal situation.

 

The triumph of the vacant city

Why then is Brú Aimsir being closed down? There seems to be no sensible answer to this.  The Digital Hub does not appear to have a new use planned for the site.  And given the substantial money already invested in converting the space, combined with the success of the venture and the fact that the crisis of homelessness has gotten worse rather than better, would it not be the sensible and ethical policy to keep the service running for as long as it is feasible?

It is true that 100 rough sleepers is a drop in the ocean in the context of the current crisis.  But we must also think of the closure of Brú Aimsir in relation to the loss of all it encompasses in terms of treatment and long-term solutions. It is the loss of this potential, albeit insufficient in itself, to seek more fundamental solutions or forms of redress.

Such decisions are indicative of a wider system, of an overall policy response to homelessness that is at best insufficient and at worst downright callous.

The closure of Brú Aimsir is the triumph of the vacant city.  It is the triumph of a vision of the city that privileges an economic elite over the needs of the people, that keeps urban space out of social use and waits blithely for economic investment while multiple crises stack up.

It is in the accretion of decisions like this that the crisis is compounded.  Every little decision not to act, to do too little, and to privilege some vague economic imperative over the humanitarian crisis is not only kicking the can down the road but also intensifying and exacerbating problems of urban inequality that may even now be already out of control.

The decision of the Board of the Digital Hub suggests how those in power, despite public rhetoric and promises, turn their backs on Dublin’s crisis for no other reason than no longer wanting it to be their problem.

In exchange for turning 100 people out on to the street, and closing a space carefully rehabilitated to meet their very pressing needs, Dublin will get back one more vacant warehouse.  Is this enough in return for all that will be lost?

Cian O’Callaghan

 

Vacancy at individual property and town level

Prompted by a colleague, I’ve been browsing the CSO Census report, The Roof over our Heads.  It is full of information from the Census 2011 on households and housing in Ireland.  I’ll probably blog about some of the other material at some point, but I thought it might be useful to point to some of their data on housing vacancy, a familiar topic on this blog.

In the report, the CSO produce an interesting map of all vacant residential address points in the country classified as vacant houses, vacant apartments and holiday homes.  There is little chance of identifying individual properties from this map as it is a scale of 1: 1 million, but by plotting the individual units as opposed to shading in areas we can get a sense of the scale of the issue (which in numeric terms is: 168,427 vacant houses; 61,629 vacant apartments; 59,395 holiday homes; out of total stock of 1,994,845 residential units).

Map of vacant properties in Ireland

There is clearly a patterns to holiday homes, concentrating on the coast, as well as the upper and lower Shannon.  Vacant apartments are mainly confined to large urban areas.  And whilst, there is much media talk at present concerning a shortage of family homes in Dublin, the data reveal there is no shortage of apartments.  In fact, there are 16,321 empty apartments in Dublin City, let alone the other Dublin local authorities.  As for vacant houses, they are everywhere.  The few blank spots are mountains or remote areas.

The CSO report also provide some data on towns with the highest levels of vacancy, both including and excluding holiday homes.  The table below lists the seven towns with the highest levels of vacancy excluding holiday homes.  In the case of Tulsk and Ballaghaderreen, two places I have some familiarity with, there is a strong correlation with the presence of unfinished estates.  However, as we have discussed elsewhere, unfinished estates are just one element of vacancy given that there are only 16,881 vacant properties on such estates, meaning there is a high degree of background vacancy in many locations beyond unfinished estates (see our AIRO VacantIreland interactive mapping tool that let’s you examine vacancy at Small Area level and individual unfinished estates).

Rob Kitchin

 

Still living in a haunted landscape

Yesterday the Irish Times published a short piece of commentary written by me to accompany a map of housing vacancy and unfinished estates, as part of the AIRO Pictures of Ireland series.  I’d originally submitted a slightly longer piece, which got cut by fifty percent due to space considerations.  Here is the full text to accompany the map.

As early as 2006, David McWilliams had coined the term ‘ghost estates’ for the dozens of unfinished developments visible on any trip across Ireland.  As the crisis deepened, unfinished estates became a symbolic and tangible marker of the excesses and follies of the property bubble.  In every village and town in the country were half-built houses and apartments, where the developer had ceased work or where units were unoccupied.

In short, too many housing units had been built for demand, the problem compounded by development finance evaporating.

The families who had bought and moved into what became unfinished estates were left trapped on them, facing a number of related problems.  These included living on or next to building sites and their associated health and safety issues, a lack of services and infrastructure, negative equity, anti-social behaviour, and a diminished sense of place and community.

Move forward to 2013 and very little has changed.  Unfinished estates still litter the Irish landscape, the people living on them face many of the same problems they did in 2006, and there is still a large oversupply of residential property in many areas of the country.

To date, the Department of Environment, Community and Local Government (DECLG) has undertaken three National Housing Surveys to monitor unfinished developments.  In the first survey, conducted in 2010, the number of unfinished estates were reported as 2,846, rising to 2,876 in 2011.  They were present in large numbers in every county in the country, but were particularly prevalent in the Upper Shannon area of Cavan, Longford, Leitrim, Roscommon and Sligo, the result of the tax-incentivised development.

In 2012, the DECLG reported that the number of unfinished estates had fallen to 1,770.  Unfortunately, the fall in numbers is principally because the definition of what constitutes an unfinished estate was changed.  The definition used in 2010 and 2011 refers to estates that have issues of vacancy and oversupply as well as outstanding development work.  In 2012 the definition refers only to the latter.

The map shows the distribution of the 1,770 estates with outstanding development work (black dots; see below).  The shading is the level of residential vacancy as reported in the 2011 Census, where dark red is over 25 percent vacancy.

In total, the Census revealed that there were 289,451 vacant properties (14.5% of total stock) in April 2011.  Of these 59,395 were classed as holiday homes.  In any ordinary housing market, approximately six percent of properties would be expected to be vacant (120,000 in the Irish case), meaning that oversupply is about 110,000.  There are also 17,032 units still under-construction according to the DECLG 2012 survey, excluding one-off sites.

To try and tackle the issues facing unfinished estates, the government set up two schemes.  The first, the social housing leasing initiative has sought to make some properties available for social housing.  The second, site resolution plans, are designed to tackle health and safety issues arising from incomplete or poor construction, with a fund of €5m administered by DECLG.  The former has had little take up and the latter has had little effect beyond fencing off dangerous areas and filling in potholes.

Most worryingly, the DECLG acknowledges that 1,100 of the estates are in a ‘seriously problematic condition’, yet only 250 estates (8.5% of 1,770) are active; that is, the developer is on site and undertaking construction.  That means that 1,520 of the estates that require development work have been abandoned to their fate.

Given that their developers have gone bust they are not likely to move towards completion in the short to mid-term.  In other words, several years after the crisis started, families are still living on developments that are substandard, with huge negative equity that locks them in.

In November, the Housing and Planning Minister, Jan O’Sullivan, announced that decisions would be taken in early 2013 to establish which estates are commercially unviable and need to have parts of them demolished.  Regardless of whether this happens or not, the unfinished estates issue does not seem set to be resolved for a number of years to come.

Unfinished estates and residential vacancy in Ireland

Rob Kitchin

 

If this is the standard of banking analysis no wonder we’re in such trouble

The Sunday Independent today gives a summary of a recent Deutsche Bank report on the level of housing oversupply in Ireland and how long it will potentially take to work off, suggesting that we need to bulldoze 200,000 houses.  Last week the Sindo reported on a CIF statement that we are about to enter a housing shortage, this week Deutsche Bank think we have 43 years worth of oversupply.  What a difference a week makes!

Interestingly, Deutsche Bank’s report uses present data relating to housing vacancy (from the Census) and population growth (from CSO).  It is data that is frequently detailed on IAN (which we used to refute the CIF pronouncement last Sunday).  Unfortunately, how DB interprets the data is totally misleading for a number of reasons as I’ll set out below.  First it’s worth seeing what they said, taken from the Sindo (I’ve tried finding the original report online but with no joy).

“Deutsche Bank figures suggest that there are 289,451 empty houses in Ireland, including almost 60,000 vacant holiday homes. This represents a vacancy rate of 15 per cent.  … Demand for housing is the key factor as to how long it will take for this oversupply to be reduced, and aside from demand for second homes the key driver should be population growth”  Based on 2011 figures which showed population growth of just 13,000, and the average number of residents per house, the bank estimates that it could take until 2055 for the glut of houses to be worked through. 

The report says that if current population trends are sustained, housing oversupply will take 43 years to clear (this excludes holiday homes from unoccupied houses in the calculations). If holiday dwellings are included in calculations, the oversupply will take 57 years to clear.

However, the 2011 population growth figures were well below the levels seen over the previous decade. But such is the scale of vacant property that even at pre-crisis, boom-year population growth levels it would take almost 10 years to clear the backlog. And this is before taking into account developments which may subsequently be completed, and houses which are still being built — 10,480 in total in 2011.

“Barring a sudden and sizeable recovery in Irish net migration, or a politically controversial policy of demolishing large volumes of excess housing stock, housing oversupply will remain a feature for many years, possibly decades, to come,” says Deutsche.

“This has ramifications for any bank with development loan exposure, and also for the mortgage market, where prices have continued to fall and oversupply makes any reverse of this trend unlikely in the near term.

“Over 200,000 houses would need to be demolished in order for the housing supply to fall to three years of current population growth.”

The first major problem with the analysis is that it conflates housing vacancy with oversupply.  We would always expect there to be some vacancy in any housing market, usually 4-6% of stock.  It is pointless counting holiday homes as vacant stock, they are owned and used and are not oversupply.  Oversupply is the difference between base vacancy and overall vacancy (minus holiday homes).  In Ireland, oversupply off a 6% base vacancy rate is c.110,000 units.  Still a lot, but less than half the total 230,000 vacant units.  Working out how long any stock is liable to last has to be based on the oversupply not vacancy.

Second, it takes no account of obsolescence.  In any one year would expect some housing to drop out of the housing stock because it has become uninhabitable or needs to be replaced.  The housing literature would suggest 3-5 in 1000 houses becomes obsolete a year.  An example in Ireland is the present obsolescence of some social housing that is being replaced through regeneration projects.  We would expect the obsolescence rate in Ireland to be on the low side due to the newness of much of the stock, but it is still an issue that needs to be factored into any oversupply calculation.

Third, present population change data is useful for predicting what might happen in the next one to five years.  For longer term predictions a more thorough analysis needs to be undertaken that looks at the population profile and considers patterns of migration.  As we posted on Thursday, in the short term there will be a reduced demand for housing due to a small cohort of 15-25 working its way up the population pyramid.  In the medium term (10-20 years), however, demand will steadily rise due to a large cohort of 0-10 year olds.  To put in perspective, in 1994 there were 48,255 births, in 2010 it was 76,762.  In other words, it is not enough to just look at population growth when considering housing demand, but also the cohort of household formation age.  Both the CIF and DB fall into this trap when estimating short and long term demand.  One also needs to consider average household size, which has been consistently falling in Ireland over recent decades.  Even if the population remains the same, if household size falls then more housing units are needed to accommodate people.  It is likely that household size in Ireland will continue to fall creating latent housing demand.

Taking the first three points together it is simply not the case that we have 43 years worth of supply, nor do we need to demolish 200,000 houses.

The fourth main problem with the analysis is it takes no account of the geography of housing and population.  It is pointless at this stage to talk about Ireland as a single unit of analysis with respect to oversupply.  As argued on this blog in the past week (here and here), the market in Ireland has become highly differentiated with respect to location, type of property, type of buyer and price.  In some parts of the country, principally inner Dublin, the level of oversupply for houses (though not apartments) is low, in other parts of the country oversupply is large. The profile of the population also varies across the country, as does the pattern of migration.  At present, migration is mainly from rural areas to urban areas, and from inner city to outer suburb.  As such, the level of oversupply and how long it will take to work off differs enormously across the country.  It is certainly the case that the four principal cities and their hinterlands will work their oversupply off first and will be first to start building new houses and this will be within the next decade.  It will take longer in rural areas.

Neither the CIF or DB reports are particularly helpful as neither is realistic, based on a limited set of data and flawed assumptions.  Given the political influence of both, I find it extremely worrying that the standard of their analysis is so weak.  Indeed, given how poor it is, if this is the usual standard, it’s no wonder Ireland and Europe are in the trouble they’re in.  What is needed at this stage is some proper demographic and housing modelling for the country under different scenarios that will give us some reasonable projections as to take-up of stock and future demand.

Rob Kitchin

 

Do we really need to construct new commercial properties?

In his opinion piece on Tues, 3rd April in the Irish Times, Kieran McGowan of Property Industry Ireland makes the case that to attract FDI there needs to be investment in the commerical property sector: “Without the accommodation, we won’t get the FDI.”  His argument is that: “There is a view that there is an overhang of completed buildings across all parts of the property sector.  This is wrong, particularly in relation to buildings for firms entering the market in key urban centres throughout Ireland.”  He does not provide one piece of data to support this view, only assertion.  The reason for this is that the data available tells a different story.

Savills ‘Dublin Office Market in Minutes’, Q3 2011, report notes that 23% of Dublin office space is vacant.  In the prime locations of Dublin 2 and Dublin 4 the vacancy rate is 16.1% and 23.5%.  Moreover 18% of vacant offices are defined as Grade A.  To put this in context, the amount of empty office space in the city is equivalent to over 200 Liberty Halls (also see the Andrew MacLaran’s post on IAN on the Dublin office market).

The Society of Charted Surveyors Ireland recently reported that the office market had little to no activity with rents/yields falling.  The same was true of the industrial and retail sectors, both with large volumes of excess stock.  In fact, they report that the only part of the property market that is functioning near to normal is agricultural land. 

This is the industry’s own data and is reflective of patterns nationwide.

Whilst I agree that the strategic use of construction will help Ireland recover from the present crisis – particularly in relation to public infrastructure that will serve the general population and industry – we need to be careful not to misrepresent the true nature of the dire position of the Irish property market and the levels of oversupply within it across all sectors.  There is plenty of office stock to deal with most of the needs of FDI, with some minor strategic investment in upgrades or new build (we only need to build new stock for specialist facilities or where the investment is so large that there is no suitable existing empty office space – in both cases this will be for a handful of companies).

As with the housing market, there is a need to harmonize the supply and demand of commercial property in order to reduce oversupply and put a floor in the market.  Unnecessarily building new stock will work to keep the market either falling or flat.

Moreover, rather than overly relying on FDI to get us out of our present slump we urgently need to grow Ireland’s indigenous sector – the sector we should have been investing in when we were ploughing billions of euro into property speculation. They are our ideal tenants of the future.

Rob Kitchin