“RADICAL MEASURES” TO develop vacant above-shop units are under consideration by government to help deal with the housing crunch, according to Housing Minister Darragh O’Brien.
“Every town and village city across this country has vacant properties above shops – if we get the policy right, I think we can we can free up a lot of them,” he said.
His latest comments on tackling the country’s housing issues come as new figures show Irish houses are getting even pricier. Transaction prices increased by 13.5% in the year to October. The rate of increase the previous month was 12.5%.
But O’Brien said he would tell The Journal readers ”genuinely not to despair”.
I know people have been despairing, people who’ve been in this space and caught for the last few years with high rents, who are living with their folks, saving every cent they have and still not going to be able to buy a home or rent a home at an affordable rate – that changes next year, it genuinely does.
In a wide-ranging interview, the minister firstly said the government wants to help people looking to buy in towns and cities, by targeting above-shop units, where people can make their home above commercial properties.
He said that above-shop units are under utilised in Ireland compared to other countries.
And through a possible grant scheme, the minister said he wants to help people buy and refurbish the units, as long as they’re going in live in the properties.
Over the last 10 – 15 years, previous governments failed to crack the above-shop living space, he told The Journal.
“I’m looking at some quite radical measures in that space, that if we want people living above our shops and in our cities and our towns in existing properties, we’re going to have to make some fairly relatively radical decisions on that.
“As it currently stands, if someone wants to convert above a shop they need a whole heap of money, and it becomes financially unviable. I would love to see more people living in our inner cities and in our towns,” said O’Brien.
The move would go beyond the Living City Initiative, which is currently in place in Cork, Dublin, Galway, Kilkenny, Limerick and Waterford. That scheme allows a person claim tax relief for refurbishing or converting residential or commercial properties.
Separately, the minister said he is extending the planning exemptions for above-shop living out to 2025, which means a person does not have to apply for planning permission to change the premises from a commercial to a residential unit.
Other issues that are seen as obstacles to above-shop living are also being looked at, he said, such as “the exact standards that are put in place” relating to access and entryways.
Safety measures related to apartment living may mean bespoke modifications are needed for above shop units also, he said.
The minister said they are looking at how other jurisdictions deal with certain safety measures, such as not requiring a separate entrance, adding that as it stands, some of the current measures are restrictive.
Refurbishing vacant properties
Another grant scheme to help people refurbish a vacant house in a town or village is also due to be launched next year. The grant will help bring vacant homes back into use, the minister said.
“We’re working on that at the moment, I intend to launch that next year. It would be in conjunction with our local authorities. [In] most of our regional towns and cities there are houses on the main street that have been empty for well over a year, maybe for years, that do require work for them to be brought back into use,” he said.
O’Brien also plans to streamline the compulsory purchase order (CPO) process which allows local authorities to buy up vacant houses.
The government Housing Agency will be charged with dealing with the CPO of vacant properties, whereby they can either sell them back into the private market or buy them up for social housing use.
“That’s going to be a very significant change,” he said, adding that some local authorities have been doing a quite well, and others not so much, in that regard.
His comments come as Dublin City Council reps told the Oireachtas Housing Committee this week that there is no “low hanging fruit” when it comes to vacant units in Dublin City.
The committee was told that the council acquired 68 properties through compulsory purchase order and acquisitions, of which 41 have been refurbished and returned to housing stock.
“I think we can do better than that,” said the minister.
“I think we need to be fair to local authorities. We need that to be coordinated. The Housing Agency has really good expertise in this space. I’m going to be asking them to do that next year.”
Vacant property tax
The housing minister told The Journal that there will be no delay in rolling out the vacant property tax.
The government’s housing plan says a review of the Local Property Tax returns in November will be carried out, “with a view to introducing a new Vacant Property Tax to ensure empty properties are used”.
Tánaiste Leo Varadkar has said legislation will be brought in next year, with the tax being applied to vacant homes from the end of 2022, and payment collected in 2023.
The minister said he has not seen any preliminary results of the LPT returns, but he plans to speak to Finance Minister Paschal Donohoe shortly on the matter.
“We will proceed with a vacant property tax. It’s needed. But it needs to be based on real data. And that’s why I think the local property tax returns is the right things to do. All of your readers will know, there are vacant properties out there that aren’t being used for various reasons, and we need to get them back into use. Not just in Dublin, but right across the country.”
In relation to newer properties that have been bought up and left vacant, the minister said “that can’t be allowed to continue”.
Reflecting on the year, the minister said much progress has been made, but acknowledged that the shutdown of the construction industry in the first half of the year due to Covid had knock-on impact in terms of delivery.
“There has been an improvement in the last six months of this year, where we’ve caught up with some of the lost time due to the Covid shutdown,” he said, adding he hopes to make up ground next year.
He’s confident with the government plan that they’ll exceed their targets next year, but added that Ireland needs to hit the 33,000 new homes per year mark.
Supply will make a difference, he said, and next year much that’s outlined in the Housing For All plan will become a reality.
State-backed mortgages with lower rates
Next year, more first-time buyers will be able to apply for State-backed mortgages, said the minister.
This week he signed the regulations relating to the income limits for the Rebuilding Ireland Home Loan scheme, which are set to increase. The interest rates on the Government home loans for people seeking to buy their first house have also been cut.
The income ceiling for the local authority home-loan scheme will be increased to €65,000 for single people seeking their first mortgage in counties Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow.
The current income cap is €50,000, but the aim of increasing the ceiling is to allow more people will be eligible.
The minister said this will make it “easier for single people to access it, to buy homes, both us second-hand or self-build, upping the amount they can borrow and reducing the rate”.
The regulations will come into effect for 4 January.
“So a better, long-term, affordable mortgage, very much focused at singles, as well as couples, so people will be able to buy a new or second-hand home. You’re looking at now a fixed rate of 2.7% fixed for 25 years. A very good product that’s a very affordable one,” he said.
O’Brien was also keen to point out that the ‘fresh start’ principle for the State-run affordable housing and loan schemes means that people who are divorced/separated and no longer have a financial interest in the family home, or who have undergone insolvency proceedings, will be eligible to apply for such State schemes.
Airbnb regulations
In an interview with The Journal before Christmas, the minister said discussions were under way between his department and the Department of Tourism on the regulation of short-term letting platforms such as Airbnb (there had long been a spat about who might take the lead when Eoghan Murphy and Shane Ross were at loggerheads over it).
O’Brien said in May that work was “well advanced” on bringing in robust regulation for the short-term lending sector. But nearly six months have passed, and still no regulations. So what’s going on?
While he said there has been “good meetings” with Failte Ireland and the Department of Tourism on the matter, he admitted the pace of progress is an issue for him.
“I’m a little bit frustrated with the pace of this but I’m pushing that on… we’re very close to getting this done,” he said.
“We need to just get on to it,” he said, committing to getting the regulations over the line “within the coming months”.
New legislation needed for Mica scheme
Another big issue on the housing agenda this year was the Mica controversy. Thousands took to the streets to protest as families looked to government for a solution to deal with their crumbling homes.
A new package will see a grant for these homeowners capped at €420,000. However it also includes a sliding scale method that will be applied to each property.
In order to get legislative underpinning for the new scheme, primary legislation will be needed, said O’Brien. The previous defective blocks scheme was set up under a quite a “weak” footing, under the 1979 Act.
“It’s not robust enough, so we are going to need primary legislation. I want to get that legislation published by the end of February. That’s a big ask. It’s a big piece of legislation, but we’ll be working on that through Christmas as well. I want people to be able to get their homes and their lives back together. That’s the whole purpose of the work,” he concluded.
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