Plans for the introduction of a new mandatory registration system for properties used for short-term lets have spent the last year under review by the European Commission, which is concerned that the Government had failed to “provide sufficient information and evidence... to support the need to adopt restrictive measures”.
The proposed legislation compels those offering accommodation up to and including 21 nights to register with Fáilte Ireland, who can then check online letting platforms to ascertain whether short-term let properties are registered. Online platforms will need to ensure anyone advertising on their sites is registered, and owners would have to confirm they had planning permission if needed. And owners and platforms can get hit with fines.
As it already stands, those renting out a short-term let for more than 90 cumulative days annually or a second property in rent pressure zones (RPZs) have to apply for planning permission. This time last year, just 50 change-of-use planning applications to short-term lets had been granted nationwide. By July last year, Cork City Council had received just seven similar planning applications. A lot of short-term let properties seem to operate with more permissiveness than permission.
The European Commission’s concern is surprising given that one doesn’t have to look too hard to find figures that would suggest that the sector needs “restrictive measures”.
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Using a trawl of two websites – Inside Airbnb and Daft.ie – I looked at 28 different rural and urban locations in Ireland in February this year from Carlow to Wicklow. Two-thirds of the properties I found advertised for short-term let were entire properties, not just a room in a house.
Across these locations there were some 28,683 short-term lets available to rent, with 18,648 of these for the entire property. At the same time Daft.ie, the rental advertising platform, had some 2,007 properties available to rent, or a fraction of the total available for short-term letting. In Kerry, a popular tourist destination, there was nearly 90 times more entire properties to rent on Airbnb than on Daft. Clare had 60 times more entire properties for short-term let than there were properties to rent on Daft. In Donegal the multiple was 48 times, and Co Mayo had 27 times more short-term lets (1,077) than properties on Daft (40).
In the cities, where housing shortages are usually the most acute and rents the highest, and where the requirement to obtain planning permission is automatic, Dublin city had more than 3,500 entire properties advertised on Airbnb, with 1,024 on Daft. Galway city had 509 entire properties for short-term rent, and 40 on Daft, and Cork city, with 81 properties advertised on Daft, had 187 entire properties for short-term rent on Airbnb.
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Why is this? For many owners who want an income from a property, it is easier to do it through short-terms lets than through being a landlord. There is limited regulation in the short-term sector, little enforcement of what regulation there is, less wear and tear, and no Residential Tenancies Board or awkward tenants to deal with.
Airbnb is a conglomerate business mostly marketing itself as an amateur pin-money sideline, but it is also very lucrative. Nearly half of Airbnb hosts have multiple listings. Recent short-term lets on Airbnb in Donegal averaged €143 per night and an annual average income of more than €20,000. The average long-term rent in Donegal is about €800 a month, or the equivalent of six nights’ short-term rental income. In Kerry, these figures are €175 per night and an annual income averaging €29,000, with long-term rents at about €1,000 per month, or again six nights’ short-term rental income. This also means properties are more likely to be occasionally vacant. Who knows what Revenue or the insurance industry make of it all?
The proliferation of short-term lets in Ireland might also explain how 2022′s census reported 35,680 vacant properties as being “available for rent” at a time when Daft was showing about 1,000 properties to rent nationally. The counties with the highest levels of short-term lets on the Airbnb platform were also the counties with some of the highest vacancy rates recorded in the last census, for example, Donegal and Kerry.
In its consideration of the Government’s proposed legislation on short-term lets, the European Commission also criticised the fact that the new regulations would be national and not limited to urban areas. Yet, there is no county in Ireland that does not have a long social housing waiting list and a need for more accommodation to be bought or rented by the State.
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If a cull of short-term lets only brought back half of these entire properties on the short-term market to the private or social rented sector, that would be almost another 10,000 homes to rent which could potentially house 30,000 people. If a cull just focused on the cities of Dublin, Cork, Limerick, Waterford and Galway, that would still be about an extra 5,000 homes to rent, or 14 times what is currently available on Daft.
Daft isn’t the ultimate measure of how many properties are available to rent in Ireland, but you could double or triple their numbers and the discrepancy between short- and long-term rental properties would still be staggering. They highlight just how much legislation and regulation of short-term lets has been ignored. I suspect this is partly down to a mé féin culture of ignoring regulations when they don’t suit; an attitude of ‘it’s somebody else’s problem’ from some authorities, and an under-resourcing of the bodies responsible for enforcement (see also: speeding, landlord-tenant disputes, and building control, for example).
Companies such as Airbnb (the world’s largest accommodation provider that owns no property), and Uber (the world’s largest taxi company that owns no vehicles) exploit gaps in regulation to much corporate success, but transfer responsibility for any related social costs to the State.
To be fair to the Government, it is attempting to rectify the situation, even if belatedly. Pushing back, the heavily lobbied European Commission wants “an assessment of less restrictive alternative measures”. It should understand, however, that it is not acceptable to have tourists living in houses while 13,300 people, including more than 4,000 children, live in hotel bedrooms. As vitally important as tourism is, putting a roof over people’s heads is more important.
Dr Lorcan Sirr lectures in housing at Technological University Dublin and is currently Visiting Professor of Housing at the University of Galway.