State to acquire private homes for social housing

The Government's Housing Agency plans to assess about 1,000 private houses for sale over the next two years, to determine their suitability to buy for social housing.

The agency was last month allocated €70 million under the Rebuilding Ireland housing action plan to buy houses, to be used by local authorities and voluntary housing bodies for tenants on social housing waiting lists.

It is to target portfolios of distressed properties held by banks and investment companies, primarily private equity funds, to deliver social housing across the State.

Agency chief executive John O’Connor said he expected the first tenants to be moving into properties within the next two months and that more than 200 homes would have been bought by the agency by the end of the year.

“We hope by the end of September to have people moving into the first 30 to 40 properties and increase that to 200 by the end of the year. We want to buy at least 400 properties a year, but if the properties are there, we will buy more.”

Rolling fund

The €70 million would be a rolling fund he said, which would be replenished as properties were sold on to housing bodies and local councils.

“The €70 million fund would be recycled so we could keep using it as working capital.

“We buy the houses, we sell them on to approved housing bodies or local authorities, the money we get from them replenishes the fund, then we buy more.”

The scheme would primarily be aimed at approved housing bodies who could access “off balance sheet” funding, but local authorities would also be helped to buy homes.

To ensure there was no delay in making the homes available to tenants the local authorities or housing bodies could be acquire houses on a short-term licence agreement from the agency until sales could be completed Mr O’Connor said.

Large portfolios

The agency would be targeting large property portfolios, generally buy-to-let properties held by companies, so as not to disrupt the normal property market he said. “We don’t want to compete with individual purchasers trying to buy homes on the open market . . . We would instead be buying in bulk from receivers.”

The agency will ask local authorities what the demand is for properties in their area, and together they would identify properties likely to be suitable for waiting list tenants.

The agency would then have independent agents value the properties. It has issued tenders seeking property valuers in 12 locations around the State, who will be paid an estimated €350,000 in the next two years to assess homes.

While most local authorities areas have been grouped for evaluation of their properties, Dublin City Council and Fingal County Council have been separated out as standalone valuation areas, each with an estimated property valuation budget of €35,000 over two years, indicating the chronic demand for housing in these areas.

Donegal is a standalone area with a €15,000 budget. Other counties have been grouped: Dún Laoghaire and Rathdown, South Dublin, and Wicklow County councils in one lot; Meath and Louth together; Cavan with Longford, Westmeath and Monaghan; Leitrim with Sligo, Mayo and Roscommon; Galway with Clare; Limerick with Tipperary; Cork with Kerry; Waterford with Kilkenny, Carlow and Wexford; and Offaly with Laois and Kildare.