Why the new Airbnb regulations probably won’t work
In March, a company called Irish Investment Consulting applied for a building permit for a development on Arran Quay in Smithfield. Investor was seeking change-of-use authorization to convert the historic five-story property above the basement to a ground-floor cafe and to upgrade the upper floors from residential use to rental short term. The application was presumably pending the imminent introduction of regulations for the sector on July 1.
The response from Dublin City Council, just two months later, was both swift and definitive. He categorically rejected the request on the grounds that it would be contrary to planning objectives as it would result in the loss of long-term residential units from the market.
The council also expressed concern – perhaps given the deluge of demands that could still come at the start of the new regulations – that allowing the change in use from a residential rental to a short-term rental would create a ” previous “.
But what does this decision tell us about the government’s impending plans to regulate the short-term rental industry?
After many round trips, Ireland will for the first time have a regulatory structure for short-term rentals from July 1. It is high time, some would argue, given the exploding market for short-term rentals, especially in urban areas like Dublin where rent-exempt hosts earn over € 200,000 per year on some properties.
Under the new guidelines, hosts or owners of properties in areas of rental pressure must either register with their local council or apply for a building permit for a change in use.
Entries are limited to people who rent a room in their home or rent their entire home for 90 days or less. However, if you want to rent your accommodation for more than 90 days, or if you are an owner and rent a second property in the short term, you must apply for a change of use planning permit, either on a new basis or on a new basis. retention.
Will they work?
This is not the first time the government has sought to bring manners to the housing market. In 2016, new rent controls were introduced; but they have largely served to keep existing tenants in their homes while rents on new – and existing – properties have skyrocketed, as many landlords simply flouted the rules or took advantage of their many exemptions.
The fear now is that these new planning rules for Airbnb properties appear poised to join the rest of the hefty volume of serious but unenforced regulations from the rest of Ireland.
As indicated by the urban planning refusal cited above, it is now very clear to owners that it is very unlikely that the councils will grant their authorization for a change of use.
Looking at short term rental planning requests with Dublin City Council over the past year, we found that while the total number of requests was less than 20 (so landlords obviously don’t even take worth applying) and decisions are still pending on some cases, the vast majority have been refused on grounds similar to Arran Quay above.
Only two had been approved, and the council expressed reservations on one of them but decided to sanction it on the grounds that it would result in “the creation of better quality housing, which could be returned to the park. of residential housing in the future “.
With such an approach, that should mean that owners unable to regularize their properties for Airbnb rentals will have to limit themselves to renting a room in someone’s house or renting out the entire property for up to 90 days per year. They will either have to switch to long-term leasing or withdraw from the market altogether.
But is this really likely to happen?
Maybe not. First of all, landlords can escape the regulatory net by renting short term but for more than 14 days. If you are renting to summer students or companies for more than two weeks, the regulations will not apply to you.
Not legally constrained
And even if that doesn’t work, you could be covered by another exemption; if you have been with the Airbnb business for seven years or more, the board may be “excluded” from any enforcement proceedings against the property. Although the Housing Department says landlords “are always encouraged to regularize their situation,” they will not be legally obliged to do so. So why would they bother?
And then there are those who will just bet on not getting caught. After all, where rent control arguably fell was in enforcement.
Although the penalties for non-compliance can be severe (a maximum penalty of € 5,000 or six months’ imprisonment, or both), the task of enforcement will fall to the local authorities. And the question remains whether or not they will have sufficient resources to manage the roughly 3,000 properties in Dublin (according to AirDNA figures) that could violate the new regulations.
Dublin City Council told us they would apply the new regulations with the same resources they currently have. While the response to a request for “appropriate resources” addressed to the Ministry of Housing was positive, he indicates that it is still “awaiting a definitive formal sanction in the matter”.
So with just two weeks of the new regime in place, we may end up following Kansas City’s lead. It introduced similar regulations in February 2018. But their impact was mitigated: Earlier this month, the local planning authority said it hadn’t even started enforcing because it didn’t just didn’t have the resources to do it.
Framing the regulations is the easy part; enforcing them is quite another thing.
- This article was last modified on July 8, 2019
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