Can vacant units above shops be converted into housing?

Analysis: There’s a lot of potential in renovating vacant above the shop units, but turning them into housing can be expensive, risky and slow

By Kathleen Stokes, DCU and Michelle Connolly, Dublin Simon Community

Ireland’s housing crisis is well established, and we often hear that renovating vacant properties could easily create more than enough homes for everyone in need. If comparing the number of vacant units to current housing need seems like a straightforward win, why aren’t we seeing this happen? Often, proclaiming ‘this could be a home’ doesn’t answer the more fundamental questions ‘what does it actually take to convert and bring vacancy back into use’ and ‘who could (and should) feasibly do this?’

There’s been growing policy attention and research directed at vacancy in Ireland in recent years, which has worked towards a more nuanced attention to vacancy – its different types, its geographies, and the different people and processes that either keep buildings vacant or bring them back to use. In response to this attention, we have been studying the potential for vacant above the shop units (or VATSUs for short) to be renovated into homes over the last year.

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From RTÉ Radio 1’s Morning Ireland, Dr Kathleen Stokes discusses the new report on vacant above the shop units in Ireland

Above the shop units are a common type of vacancy across Ireland, but also bring a unique set of complications and challenges. First, it is harder to identify them. While there are different measures and data dedicated to vacancy, above the shop units could be classified as either residential or commercial and might not be included in vacancy data if, for instance, the ground floor of the building is occupied.

We also often rely on visual cues to identify vacant units (for example, broken windows, overgrown grass, or roof damage) which means upper floor vacancy can be more difficult to see from street level. For these reasons, it is nearly impossible to have a definitive number of vacant units in the country.

The Irish Government has a number of vacancy supports and targeted vacant above the shop units for years through tax incentives like the Living City Initiative (previously Living over the Shop), planning exemptions, and financial supports to convert vacant units to residential use (like the Repair and Leasing Scheme). These schemes have had variable levels of take up, yet vacancy has remained a persistent feature of many Irish towns and cities. Also, it’s important to note that this isn’t just an Irish problem; other countries have created similar schemes or incentives to encourage the conversion of vacant units.

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So why aren’t we seeing lots of vacant above the shop units being turned into homes across the country? The short answer is renovating or converting vacant above the shop units tends to be more expensive, risky, and slower than building on a green or brownfield sites. Renovations tend to be substantial and involve a host of building works, from rewiring to reflooring to fireproofing.

Looking across the stages of identifying, planning and working on vacant units, our research identified challenges and opportunities. For example, finance can be tricky for many individuals looking to renovate a vacant above the shop unit, and hard to budget with so many uncertainties. Accessing a mortgage can also be challenging for a commercial property, and you will need funds to pay upfront costs while waiting to receive any vacancy loans or grants at the completion of your renovation.

Money isn’t the only issue for bringing VATSUs into use. Building standards and regulations can also take time to navigate, particularly if there are divergent requirements for things like conservation, fire safety and disability access, and retrofit. Also, it can be hard to find people with experience working on similar projects and timelines can get thrown waiting for approvals, or when unexpected work crops up. Even people who have experience in architecture and construction have found these projects can drag for long periods, which can put other parts of life on hold.

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From RTÉ Radio 1’s Morning Ireland, house prices in number of traditionally lower-priced counties soar above the national average

While our research identified a number of challenges, we also heard that none of these are insurmountable. Indeed, many people we spoke to were adamant that bringing VATSUs into residential use can and should be pursued on a larger scale. Similarly, a number of participants who had previously completed a successful VATSU conversion were open to doing a similar project again.

There are many ways the process of identifying, preparing, and renovating VATSUs for housing could be streamlined and made more feasible and appealing. A big message was finding effective ways of supporting those interested in renovating, with more tailored support, clear points of contact, and guidance on experienced professionals and approaches to renovating complicated VATSU projects. Taking inspiration from the Pilot Conservation Advice Grant Scheme for Vacant Traditional Farmhouses, a feasibility grant for VATSUs might also help reduce the uncertainty surrounding potential renovations.

Another important question is who should take on these renovations if there are no motivated individuals or willing owners or developers to do so. If many VATSUs are effectively ‘loss leaders’, we need to ask who can take on and scale VATSU renovation for public benefit.

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From RTÉ Radio 1’s Drivetime in 2021, Tom Gilligan from Mayo County Council, and founder of vacanthomes.ie and Frank O’Connor from Anois discuss vacant housing

As part of our research, Dublin Simon Community conducted a feasibility study to see if they could acquire and renovate a building with VATSUs to contribute to their housing stock. Given that renovating a VATSU would cost nearly two or three times more than delivering a new unit, it would be difficult for Approved Housing Bodies to justify the additional cost, time and uncertainty while also trying to urgently increase social housing stock.

Of course, not all vacant above the shop units will be suitable for residential use and many which could become homes won’t be viable in purely financial terms. However, keeping existing buildings in use has clear environmental benefits and can positively impact local communities and maintain architectural heritage.

Our research does not suggest that vacant above the shop units are a silver bullet for the housing crisi

Some councils, like Waterford, are actively working with local property owners to support the renovation of vacant buildings and units into housing – accounting for nearly half of Repair and Leasing Scheme loans since the scheme began. Here, property owners have spoken glowingly about the support and guidance they’ve received from the local authority to access funding, which has prompted them to convert additional vacant above the shop units in their portfolio to housing.

Ultimately, our research does not suggest that vacant above the shop units are a silver bullet for the housing crisis. In many ways they are more complicated and riskier to bring back into use as housing, yet they also are not impossible and offer many benefits. We see great potential, but also recognise that systemic changes and more tailored support will be needed to become viable and scalable option for housing in Ireland.

This project was funded by the Housing Agency’s Reseach Support Programme.

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Dr Kathleen Stokes is an urban geographer and Assistant Professor in the School of History and Geography at DCU. Michelle Connolly is a Senior Research and Policy Officer at Dublin Simon Community.

The views expressed here are those of the author and do not represent or reflect the views of RTÉ