It’s time to end the Airbnb effect on housing supply in Dublin – The Irish Times
The government programme, endorsed by Fianna Fáil, Fine Gael and the Green Party, states that “the state has a fundamental role in enabling the delivery of new housing and ensuring that the existing stock is put to best use”.
But he’s eerily silent on one of the most serious threats to our housing stock: Landlords are converting properties – houses and apartments – into short-term rentals.
Before Covid, there were more than 5,000 “whole houses” in Dublin accessible to tourists via Airbnb alone, even in the midst of a real estate emergency, and new regulations introduced a year ago were ostensibly aimed at recovering this lost stock of apartments and of houses for “the traditional long-term rental market and thus help to alleviate the housing shortage pressures that this area is currently experiencing”.
The previous Fine Gael-led government had known since October 2016 that some form of regulation would be needed. It was then that An Bord Pleanála made a final ruling that the conversion of a flat on Crown Alley in Dublin’s Temple Bar for short-term holiday rentals required planning permission as this “constitutes a material change” from residential to commercial use.
But there was a lot of dithering about what to do. The then Minister for Housing and Planning, Simon Coveney, told the Irish Independent that Airbnb had been a very positive thing for many homeowners and visitors to Ireland. “I wouldn’t want to undermine that, especially in a country that relies on so many people coming and going for the weekends and so on,” he said.
Airbnb, which has its European headquarters in Dublin, had previously lobbied the Department of Tourism to make its case for “measures…to ensure Airbnb’s continued growth in Ireland”, then meeting the Minister for Tourism Shane Ross to impress on him that the short-term rental of residential properties “can be used as a solution to the problems of capacity and the spread of tourism to all parts of Ireland”.
Lobbying by various government departments continued unabated. Records show 49 meetings between departments and Airbnb or their representatives. The Ministry of Housing and Planning was talking to Airbnb about developing a “memorandum of understanding” about its operations here. The ministry hoped (unsuccessfully, as it turned out) that this would cover “the prevention of unwanted and unauthorized commercial rentals advertised on the website”.
The Oireachtas Committee on Housing, Planning and Local Government got involved, holding hearings and releasing a report in October 2017 that went much further. He recommended a licensing system for short-term rentals, applying to platforms such as Airbnb, under which “hosts” should be registered with local authorities and all relevant information – name, address, type rental and availability – shared with them.
Furthermore, an inter-departmental working group has been created to “examine the adequacy of the current regulatory framework and its applications to online platforms for short-term tourist rentals” – via Airbnb and other agencies that deal with short-term vacation rentals such as Key Collection, HomeAway or Booking.com – “and make recommendations for necessary regulatory reforms, if any”.
The 15-member group – chaired by the Ministry of Housing, Planning and Local Government – was broadly representative. It included senior staff from Dublin City Council, An Bord Pleanála, Fáilte Ireland and the Residential Tenancies Board as well as the departments of Finance, Transport and Tourism, Business and Enterprise and the Attorney General’s Office.
Like the Oireachtas committee, the task force made a distinction between “home sharing” – the short-term rental of a room in a house to help with the costs of mortgage payments, rents or other household expenses – and the phenomenon of landlords renting “whole houses”. to tourists thus removing these houses from the long-term rental market. For landlords, short-term tourist rentals are considerably more lucrative than long-term rentals.
In addition to noting the disruptive effect of the transient nature of vacation rentals on local communities, the task force found that “lack of visibility into unregulated short-term rentals is also a concern and limits the ability to effectively monitor and regulate the activity”. .
He recommended a licensing and registration system that would encompass “all online short-term rental intermediaries under which . . . a license would be required to operate as an online intermediary of “residential units” in the state and all hosts, whether they share their home or rent entire houses or apartments, would also be required to register with of a new statutory authority.
Basically, the task force proposed that (from a given date) short-term rental of “whole houses” would only be allowed if they were registered and also met legal requirements, including planning permission. “Failure to comply with this requirement by a seller would constitute an offense and also constitute grounds for revocation of a license to operate as an online intermediary.”
It also recommended that whole-home short rentals be capped, with a maximum number of stays per year, and that the responsibility for monitoring and enforcing the caps “should rest primarily with licensed online intermediaries”, who would be required to pay an annual license fee to fund the cost of monitoring and ensure regulatory compliance.
But the soft regime introduced on July 1 last year does not incorporate any of the stricter measures proposed by the task force. On whether online platforms would be required to register with a planning authority, the Department of Housing and Planning’s FAQ sheet simply answered “No”; only hosts engaging in short-term rentals would be required to do so.
Would online platforms therefore be regulated? Again, no. “The purpose of these changes. . . is primarily to address longer-term rental issues resulting from the use of properties for short-term rental in designated rental pressure areas, which are areas of high housing demand. The broader regulation of online platforms goes beyond the framework of the town planning code”.
Airbnb and other online platforms engaged in marketing short-term rentals have not been held responsible for their hosts’ compliance. Instead, local authorities have had to bear the burden of proving that any house or apartment in an area of rental pressure is operated as holiday rentals for more than 90 days in total per year. And they should hire more planning enforcement officers to deal with illegal short rentals.
The vast majority of entire homes on Airbnb and other online platforms are illegal because they lack the required building permit for a change of use from residential to commercial. Airbnb and its competitors turn a blind eye to the problem because their business model is based on securing houses or apartments for tourists from all over the world.
The impacts have been devastating, especially in areas of high demand. In Temple Bar, tourists – until March 2020 – could be seen daily lugging their wheeled bags through the cobbled streets in search of their holiday homes. Residents of Temple Bar, an informal campaign group of which this writer is a member, undertook an after dark photographic survey of residential buildings at Easter.
The results show that many units are plunged into darkness on spring evenings, suggesting that up to 40% of apartments in the area may have been operating as short-term rentals. The high level of vacancy suggested by the survey cannot be explained by the fact that students move during confinement; very few students can afford to live in Temple Bar.
It was the Covid-19 pandemic and its devastating impact on international tourism, rather than unnecessary regulations introduced a year ago by Eoghan Murphy as Minister for Housing and Town Planning, that put an end to their gallop. Suddenly a slew of apartments were advertised for longer term rental on Daft.ie – 353 additional properties appeared in March.
Dublin City Council confirmed this week that it has received just 19 applications since June 2019 for a change of use from full-time residences to short-term rentals. Of these, 12 were refused, three withdrawn, three deemed invalid and one was the subject of a request for additional information. During the same period, 637 investigations were opened, 21 formal notices were issued and one case is being prosecuted.
In response to questions raised in this article, Airbnb offered the following statement: “Accommodation is an economic lifeline for many Irish families, with almost half of hosts saying the extra income helps them make ends meet. Accommodation also helps spread guests and the economic benefits of tourism to communities across Ireland, which has boosted the national economy by more than €2 million a day in the last year alone.
“We take housing issues seriously, which is why we have always supported clear rules and will continue to work with the Irish government, having already worked with over 500 governments and organizations around the world to help hosts share their homes, follow the rules and pay taxes.
It should now be a priority for the new Minister of Housing, Planning and Local Authorities, Darragh O’Brien, to review the regulations on short-term rentals and simply impose on all platforms concerned the legal obligation not to publish any apartment or house for tourist use that does not have the required building permit.
So far, the interests of tourism have trumped Dublin’s still desperate need for accommodation. There is no better time than now to recover the housing stock sacrificed to tourists.