Dereliction overhead: very practical solutions

October-November 2024 31

Anywhere, Ireland: free up overhed ccommodtion, s  single

unit, for cost-effective solutions to the housing crisis

Dereliction overhead: very practical

solutions

— banging together the heads of

the Departments of Finance and Housing

Tackling urban dereliction through tax incentives,

de-regulation and regulation: a big part of the solution

is shared single-unit overhead accommodation

By Michael Smith

The Opportunity

How did a country with tens of thousands of

empty buildings end up with a housing

shortage?, asked the piece in the New York

Times on September 6. But like so many others

it has no answers beyond the tired “15 years

[after the economic crash], many of the

developments have been completed; on

others, construction has restarted. But some

still sit quietly amid overgrown roads and

gardens”. Sure enough, the 2022 census

recorded well over 100,000 vacant or derelict

properties. Meanwhile, when Simon Harris

took over as Taoiseach he promised to ﬁx the

housing crisis “once and for all” and build

250,000 homes in ﬁve years.

100,000 refurbished homes, turned around in

much less than ﬁve years would clearly be

helpful.This article suggests how to make an

aggressive start.

Existing buildings are the most available,

cheap and quick source of housing. They do

not require infrastructure such as new

connections to utilities, broadband and

drainage, and in urban settings are close to

shops, services and public transport. The most

sustainable building is the existing building.

The Problem: regulatory

diiculties with urban

refurbishment

A big problem is ﬁre, safety and access

regulations.

For overhead accommodation, it is clear that

regulatory problems trump ﬁnancial incentives

and must be attended to as a threshold

concern.

A 2023 Trinity report, ‘Urban Vacancy in

Ireland’, cited one of its researcher’s

conversation with a local government oﬃcial

in 2021, in what sounds like a standard sectoral

conversation: “I met the architect [involved in

a particular development] and I was saying,

‘Well, under the bringing back homes thing, if

you keep it as a single unit you won’t have to

worry about ﬁre [standard upgrades], you

won’t have to worry about insulation for sound.

You can just side-step a load of expenses and

complications and also [any] impact to historic

buildings if you just keep it as one [unit]’…So

now they have gone in for planning and they

are splitting it up into two units. It means

taking out the stairs, like it is a lot of work, you

know, in terms of meeting ﬁre regs and

minimum spacing and all this stuﬀ. So I always

like to say, ‘Oh don’t be silly, ﬁre [regulation]

isn’t as bad as you think it is’, But in those

tighter spaces it can be, because it might mean

you have to move the stairs or do some pretty

big work”.

The report concludes from this that “conﬂicts

between building standards and perceptions

of development ‘viability’ can often emerge”.

So it notes that: “Whereas refurbishments

POLITICS

Minister.indd 31 03/10/2024 14:32

32 October-November 2024

is broken ﬁx it don’t replace it. You live with

little slopes in some ﬂoors, you don’t have to

faithfully replace every piece of dilapidated

cornicing. That should be the model. An

example of my approach is No 5 Ormond Quay

Upper, Dublin 7, restored from dereliction 30

years ago and currently a houseshare with

seven bedrooms, three shared large

bathrooms with Victorian baths, shared living

room and kitchen, and basement for storage.

I live in the house next door, No 6 Ormond

Quay Upper, which I also restored from

dereliction and which is also over a business.

[I should declare that no property in my

ownership would beneﬁt from any of the

provisions proposed.]

Benefits of this model

This model facilitates living over the shop,

indeed it should, if targeted a little, facilitate a

return of stakeholder shopkeepers to urban

commerce, living with their families (and

sometimes their friends) overhead. It can be a

return to the way things were, to prosperous

urban centres with mixed communities living

in generously proportioned accommodations,

the way it is done all over historic Europe. It is

not a discredited model, it is a sustainable

model that fell out of use.

It is important to note that shared living is

not for everyone at every stage in their life. It

does, however, seem reasonable to think

students, single people in their twenties and

thirties (think Friends!), and single families,

could live in shared accommodation. Together

it is a signiﬁcant demographic.

Another signiﬁcant advantage of owner-

occupiers living over their own shop or

business is that it obviates the need to

re-create separate access to overhead

accommodation which in an extraordinary

number of cases in Ireland has long been

removed.

Critically, the principle of shared

accommodation allows for a multiplicity of

living arrangements that obviates the need for

onerous subdivision and circulation. This

model can also include separate top-ﬂoor

apartment living, with a more shared

arrangement in the rooms of middling below

– each tenant being respectful of each other’s

living arrangements in a way that works with,

not against, the typical two-room layout of

historic Irish buildings.

Shoehorning single-ﬂoor apartments into

old ﬂoor plans that cannot comfortably or

cost-eﬀectively accommodate them has for

too long been the holy grail objective of the

Irish planning sector and associated

guidance documents. It is arguably because

of this standards-led insistence that so few

upper floors have been successfully

rehabilitated in our urban centres.

Recent research undertaken by Conor

of vacant properties that retain the property’s

original layout are more straightforward from

a regulatory, planning and conservation point

of view, property owners may decide to take on

additional work to subdivide into additional

units and, therefore, achieve a higher rate of

ﬁnancial return. Trade-oﬀs between regulatory

compliance and development viability were a

persistent theme in our interviews”.

Many participants also told the researchers

that the current building standards regulations

in Ireland are stricter than elsewhere, or that

the planning system lacked flexibility in

dealing with the diversity of building stock.

And a ﬁre oﬃcer was cited as having told a

planner that “our regulations are much stricter

than any other European country”, leading the

planner to conclude that “the Danish and the

Dutch are obviously using regulations that are

more adaptable”.

The report summarises: “Whether this

perception that greater ﬂexibility exists abroad

would hold up to detailed empirical

investigation is unclear. However, across our

interviews, stakeholders in various sectors

expressed the view that working with older

building stock requires a pragmatic, ﬂexible

approach, while also ensuring building safety.

It was generally felt that ﬁre, safety and access

standards lacked flexibility in the Irish

context”.

This article works on the assumption there is

a lethal combination of genuine regulatory

rigidity and perceived diﬃculties.

We can have living over the shop or business

or we can have slavish compliance with

standards that achieve little and which were

not deemed necessary over hundreds of years.

Of course incremental improvements to ﬁre

safety, including subsidised sprinkler systems,

centralised fire alarms, ubiquitous fire

extinguishers, intumescent paint for ceilings

and intumescent protection for old doors,

should be encouraged; but the starting point

needs to be the public beneﬁt that is reaped

from facilitating reuse of older buildings as

single units, to be shared by families or friends.

Celebrity architect Hugh Wallace told the

Examiner: “Today we do things very diﬀerently

to the way things were when these regulations

were introduced. Fire prevention, detection

and isolation systems have all become far

more sophisticated and accessible. Why can’t

these improved technologies be taken into

account when planning for the repurposing of

older buildings into much-needed homes?”.

More generally he added: “Why can’t we accept

that not every building can reasonably made

accessible for all? The alternative is that we do

nothing and simply let these buildings fall into

disrepair and dereliction to the point where

some of them will ultimately have to be

demolished”.

Institutional hostility to urban

refurbishment

The knock-on eﬀect of this regulatory rigidity

is that Irish institutions, surveyors, grant-

awarding bodies, local authorities, banks and

insurance companies, as well as architects

and planners, are reluctant to facilitate

restorations of historic buildings. They’re

terriﬁed a bath will overﬂow and ﬂood the

ﬂoor below through the wooden ﬂoor that

they wish was concrete, they’re terriﬁed of

ﬁre, and they’re nervous of noise travelling

through wooden ﬂoors.

Worse, the necessity of compliance with

these standards, real and perceived conduces

to a narrative that overhead refurbishments are

not ﬁnancially viable.

Regulation and costs together explain the

poor take-up of urban renewal grants and

incentives for refurbishment over fully forty

well-meaning years of worsening overhead

urban dereliction.

An example of the problem

This mess is exempliﬁed in a recent case in

Dublin: that of the house on Usher’s Island in

Dublin where James Joyce set the best short

story ever written, ‘the Dead’. There have been

proposals for years to develop the house, ever y

inch of whose civilised space was evoked in the

story, and which was famously restored

(including by the reinstatement of the long-

demolished topmost storey), as a house

twenty-ﬁve years ago. Latterly, it has been

reported that the owners want to divide it into

apartments. A Mr Hughes of Hughes Planning

& Development Consultants told the Irish

Times that “after the recession, the building’s

use as a cultural centre proved ﬁnancially

unsustainable and it has fallen into disrepair”.

He stated that the “use of the building as

residential is more suitable than a tourist

hostel for which the previous permission was

granted. And he contends that it is not feasible

to return the building to one single house.

However, the provision of 10 apartments was

considered appropriate”.

The question that went unanswered was why

“it was not feasible to return the building to one

single house”.

Models: single units restored on

principle of minimum intervention

Here the author has some personal

experience. I have only ever had one ﬁnancial

idea, and it is a good one. That is to buy big

dilapidated period houses, keep their layouts

as built, thereby saving money and saving the

character of the building. You do not insert

concrete ﬂoors and ﬁre compartments or

remove historic staircases. You refurbish

them using an approach of minimal

intervention. If it’s not broken don’t ﬁx it; if it

Minister.indd 32 03/10/2024 14:32

October-November 2024 33

rather than just the building certiﬁable by

CTVLIL; details for this could be scheduled

to the Act

“Qualifying expenditure”, in relation to an

approved building, means expenditure

incurred by the person who owns or occupies

at least one ﬂoor of the approved building on

one or more of the following —

The refurbishment of the approved

building as a single residential unit or as

two units being a commercial or retail

premises and overhead residential

premises respectively, retaining all their

signiﬁcant historic architectural features.

Refurbishment, as in the Temple Bar Act,

means “any work of construction,

reconstruction, repair or renewal,

including the provision or improvement

of water, sewerage or heating facilities,

carried out in the course of repair or

restoration, or maintenance in the nature

of repair or restoration, of a building,

which is consistent with the original

character or [and] fabric of the building”.

ii.

The installation, maintenance or

replacement of a security, smoke or ﬁre

alarm system or sprinkler system in the

approved building, and

iii. One half of the cost of public liability or

ﬁre insurance for the approved building”.

This is how this might work: case study,

Abbey St, Dublin

Until recently there was a building for sale

at 29 Abbey St in Inner City Dublin.

Usual Approach

Plans touted by the agent selling the

building suggested adding two ﬂoors at

considerable expense to create a ﬁve-

storey building of 1400 square feet

— three storeys of residential, each of

280 square feet, residential and two

storeys, each of 280 square feet, of

retail.

It is estimated this, effectively

inserting new build on a busy street,

would cost €700,000 additional to the

€300,000 purchase price.

With the grant of €70,000, the cost of

the scheme would be €930,000. It might

produce an annual rent of €30,000 for

the residential and €35,000 for the

shop.

This is not proﬁtable. It would be

diﬃcult to make it proﬁtable even with

generous tax incentives. It is probably

not a sustainable re-use of the historic

building.

The incentive scheme proposed above in

bold type would not cover those works as

they would not keep the existing shell of the

building.

Lucey, Associate Professor at the UCD School

of Art History and Cultural Policy, has shone

a new light on how singletons and small

family units occupied the Georgian buildings

of eighteenth-century Dublin. It has revealed

how Georgian houses were commonly let out

to middle-class families, bachelors and

widows on a ﬂoor-by-ﬂoor or even ﬂoor-plus-

room basis, and not always as large-scale

aristocratic mansions.

What government needs to do:

1) Deregulate

To that end government needs to get over the

need for the same compliance with ﬁre,

insulation, access and noise standards in

hundreds-of-years-old houses (that have

self-evidently survived that long without

them) that you’d want to get from a modern

building, to get over the need for fire

corridors, fire ceilings, fire doors, and

concrete ﬂoors and to get over the need for

tenancy law that makes sense for self-

contained accommodation but not for

houseshares where residents have

important relations with each other as well

as with the owner.

2) Give grants and tax incentives

Government incentives, led by the

Department of Housing and Heritage and

the Department of Finance, should include

grants to local authorities to pioneer

eﬀective restoration schemes.

Croí Cónaithe grants should be

maintained.

Tax incentives

In addition the Department of Finance should

use the model of the Temple Bar tax

incentives from the 1990s which incentivised

residential developments that at least

avoided demolition.

But the incentives should require that

overhead accommodation is in a single unit,

retains historic and architectural features

and includes ﬁre-mitigation measures such

as those referred to above.

•

The incentives should be generous — to

counter the regulatory and anecdotal

legacies.

•

But since the proposal is based eﬀectively

on frugal, minimal intervention it should

be both cheaper per square foot for the

owner, and indeed for the Department of

Finance to incentivise, than any other form

of accommodation.

•

The relief should target small business

owners who want to live over their

business. It should also be available to

them if they rent out the properties since

there is no public policy reason to preclude

renting the commercial premises to a third

party, or the overhead as a houseshare;

but not if the properties are sold.

•

It should therefore be available against

income from all sources, not just as with

Section 23 against income from all rental

properties.

• It should be tailored to the fact that most

of the refurbishment should be carried out

over one (or two) tax years and that typical

target owner-occupiers won’t have

enormous tax liabilities.

•

The relief should be time limited to

minimise tax loss to the exchequer.

•

There should be relief of expenditure of

30% of qualifying expenditure annually

over each of ﬁve years.

•

The benefit would go to the person

developing the properties. That person

should get the beneﬁt even if they choose

to rent the properties out.

•

In an eﬀort to avoid speculation and

windfall proﬁts, the beneﬁt should not go

to purchase price and there should be no

relief from stamp duty.

•

Rates relief would apply only to the

developer owner adding to the incentive

for owner-occupiers living over their shop

or business. Encouraging recreation of

businesses at ground ﬂoor may also

facilitate some who are — partly in an

eﬀort to avoid commercial rates — working

from home. In eﬀect the commercial

premises can serve as oﬃce with a public

front. Animating the street with commerce

is a public good.

Draft wording for Department of Finance for

tax incentives:

“Where a claimant carries out qualifying

expenditure on refurbishment of an

approved building, the Tax Acts shall apply

as if the amount of the qualif ying expenditure

referred to were a loss sustained in a trade

carried on by the claimant separate from any

trade actually carried on by the claimant.

Relief shall be limited to 30% of qualifying

expenditure claimable in each of ﬁve years

following its incurrence.

Approved building means a vacant or

derelict building in a city, town or village.

My suggestion, pursuant to several

reports over the years by An Taisce on how

to target tax incentives to ensure quality in

development is that the building should

certiﬁed by a body which I call ‘City, Town

and Village Living Ireland Limited (CTVLIL)’

a body whose directors could be appointed

by the Taoiseach (or Minister for Finance)

analogous to Temple Bar Renewal under the

Temple Bar Area Renewal and Development

Act, 1991].

Still better, from a conservation

perspective, would be to make the works

Minister.indd 33 03/10/2024 14:32

34 October-November 2024

New approach promoted by

the recommended

tax-incentive scheme

An alternative that would be favoured by

the incentive scheme is not to add

anything but to use the existing shell of

the building as a single residential

unit,which is cheaper and preserves more

of the structure, to create 825 square feet

of which 275 square feet would be retail.

The economics of the case study [The

costs are based on those of 18 Ormond

Quay Upper, a recent restoration of a semi-

derelict city-centre building by Dublin

Civic Trust. For that project the main

contract for all structural work and

exteriors was €450-€500k. That included

huge structural steels over four storeys,

structural steels to four shopfront arches,

ﬂoor ties, heli-ﬁxing, bow ties, full dashing

removal, minimal brick repair, repointing,

relaying parapet stone, cleaning

shopfront, repointing shopfront. Double-

joisting, relaying ﬂoors, full M&E. And

there was about another €150k-€200k on

architectural features such windows,

doors, staircase, joinery, plasterwork,

ﬂooring, decoration etc]:

Property cost

€300,000 purchase price minus €70,000

Croí Conaithe grant: €230,000

Refurbishment cost for 825 square feet

(assuming €300 per square foot as is

standard): €247,500

Tax Beneﬁt

Tax beneﬁt of €371,250 (€74,250 annually

over ﬁve years) to be set oﬀ against all

income, wheresoever arising.

Net tax beneﬁt

Assuming the taxpayer’s marginal tax rate

is 40% that is a tax saving of €29,700

annually for ﬁve years.

After five years, the taxpayer/

refurbisher/liver-over-the-shop will have

spent €477,500, will have obtained a

€70,000 grant and will have saved €371,

250 in tax.

Notional rental

Estimated annual rent would be €21,000

for residential and €28,000 for the shop

(if the building is not owner occupied). At

a notional €49,000 annual rental, with a

tax saving of €29,700 annually for ﬁve

years, the scheme is economically viable.

No stamp duty relief

It is not proposed stamp duty should be

relieved or that there should be tax relief

for moneys spent on the purchase price as

property transfers are not in themselves

to be encouraged.

Rates relief

Rates relief, as with designated areas,

would be helpful over ﬁve years for the

commercial portion of the premises.

3) Regulate dereliction better

The carrot of incentives should be

supplemented by the stick of anti-dereliction

legislation. The most important thing is to

reword the Derelict Sites legislation.

Currently a building may not be treated as

derelict if it does not impinge on adjoining

buildings. This is because the 1990 Derelict

Sites Act deﬁnes derelict as detracting, or

likely to “detract, to a material degree from

the amenity, character or appearance of land

in the neighbourhood of the land in question”.

This means that putting hoarding around a

derelict site, unless it is a protected structure

(i.e. a ‘listed building’), will protect it from the

meagre 3%-of-value annual levy, naively

imposed for dereliction, and from ultimate

compulsory purchase. The legislation should

be reworded to embrace, in addition, any

building in a ruinous state. A progressive

2022 Green Party Bill — perhaps

unnecessarily — was more speciﬁc and

embraced buildings where: (b) doors,

windows or entryways on the site are

permanently blocked or boarded up such that

29 Upper Abbey Street

the site is not in a habitable state. (c) the site

has not been adequately maintained or has

been damaged, such that it is incapable of

development for beneﬁcial use without some

remedial works or (d) the site has been

disconnected from electricity or water

services for a period of two years or more.

Sinn Féin TD for Cork North Central,

Thomas Gould, launched a Derelict Sites

(Amendment) Bill in 2022. It provoked a

debate in the Cork media. His constituency

colleague, Fine Gael TD Colm Burke, insisted

that there were complex legal and

constitutional issues to consider and Fianna

Fáil TD Padraig O’Sullivan argued that the

Government has already implemented

measures to address this problem through

the Croí Cónaithe Scheme: “The Minister for

Housing and the Department are also in the

process of drafting new measures on a local

authority led programme to help local

authorities buy or compulsorily purchase

vacant homes which can be sold on the open

market and will ensure homes do not lie

vacant. It is anticipated that all local

authorities will acquire at least 2,500 vacant

units and present these to the market by

2026.

“I understand that these measures are

being ﬁnalised and will be published over the

coming weeks”, added Mr O’Sullivan.

They were activated in April 2023 but they

made little enough diﬀerence. Nor has the

worthy Green Party initiative, the Town Centre

First programme, which aims to enable areas

to pursue projects like “redeveloping derelict

sites, creating community parks and river

walkways, protecting historical landmarks

and boosting tourism”. The problem is that

these measures fail to adopt a speciﬁc new

approach to dereliction.

As of 2022, €12m in Derelict Sites revenue

was uncollected by undynamic local

authorities that hardly put their best brains

into municipal enforcement.

Thomas Gould’s Bill would have required

local authorities that fail to collect 75% of the

Derelict Sites Levies owed to them to publish

a report explaining why these levies are not

being collected and detailing plans for their

collection. Gould told the Dáil: “There are

properties that have been listed on the

Derelict Sites Registers since their inception.

We are talking about properties that have

remained on these registers, sitting empty

and decaying for at least 32 years”. The bill is

awaiting second stage at the moment.

Darragh O’Brien mooted in 2021 that the

government Housing Agency would 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. It is a good idea but

has not happened.

Summary

The Departments of Finance and Housing

need to liaise and move quickly to provide a

happy merger of regulatory realism, ﬁscal

generosity, and a restructured Derelict Sites

Act to re-deploy Ireland’s lowest hanging

housing source, urban derelict buildings, as

business or shop units with single-unit

accommodation overhead – providing

sustainable, economically viable and

community-enhancing homes in a housing

crisis.

Minister.indd 34 03/10/2024 14:32