New homes from empty houses
In his first guest blog for CIH, Circle Voluntary Housing Association head of property services Russell Grainge talks about how approved housing bodies are bringing empty properties back to serve people in housing need.
With the reported increase in the number of homeless families in Ireland during 2019, quite rightly there has been ever more focus on finding homes for those in housing need. It’s easy to say build more homes, but with many barriers to finding available land, gaining planning permission and getting finance in place, not to mention the resource required to manage the delivery of new developments, the new-build route for resolving the housing crisis is always going to be a long-term plan.
One alternative route to providing suitable housing is through the acquisition of existing empty properties and refurbishing them to the requirements of the Housing (Standards for Rented Houses) Regulations 2019. This standard is a baseline; often further works are also required in order to provide a home that is of a suitable quality to meet the needs of families.
This option has been one of the preferred routes to meet demand for several approved housing bodies during 2019. Working in partnership with the Housing Agency along with local authorities, housing has been acquired across the country, refurbished and let to those who are in the greatest need for housing.
Utilising the supply of already existing empty properties to help try and bridge the housing shortfall in the immediate term makes a great amount of sense. However, ensuring this type of property makes for a good quality home for the end user comes with both short and long-term challenges that should not be ignored.
Much of the housing being acquired is of older type, that from an asset management point view has limited life left in main components such as kitchens, bathrooms, heating systems and electrics. Even when these components appear in good condition, they will have already used much of their functional life.
This means that unless such components are replaced at the time of purchase, something which can add a considerable amount to the purchase cost and may result in a waste of a perfectly functional component part, the near-to-medium-term maintenance costs are likely to be high when compared to a new-build property.
And with the continued drive towards a reduction in carbon emissions from all building types and an obligation to ensure tenants aren’t placed into fuel poverty, consideration also needs to be given to every home’s energy performance and the longer-term challenges of making the property more energy efficient.
To ensure the quality of the home is maintained over the longer term, it is essential that the associated costs for both planned and reactive maintenance are considered at the time of purchase as part of the asset management plan. With lower-than-market rents available through existing funding schemes, such maintenance costs can turn the property from being an asset into a liability over the longer term if estimated maintenance costs can’t be funded through the agreed rental income.
Although it won’t resolve the current housing shortage altogether, the acquisition and refurbishment of empty properties to help meet the immediate demand for housing is a positive step. It is important however, given the urgent need for housing, that stakeholders don’t lose sight of the longer-term cost implications of both maintaining the quality of those homes and ensuring they continue to be fit for purpose for those tenants who make these houses their homes now and into the future.