Q&A: Will new rules bring short-term rentals back onto the long-term market?

From evictions, unauthorised lettings, to rent pressure zones and planning permission, balancing the rights and needs of people living here and people visiting the country is a tricky business

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Short-term holiday lettings are in the news again?

They are indeed. A report in this newspaper on Monday revealed the landlord of a Dublin apartment block, who evicted up to 45 tenants last year on the basis that he was selling the property, has been found by Dublin City Council to be still using the property for unauthorised holiday letting.

So, what has the council done?

After it was made aware of the situation, it issued enforcement proceedings in connection with Reuben House, a six-storey building on Reuben Street near the Coombe maternity hospital in Dublin 8, ordering the “cessation of the unauthorised use of the property” for short-term letting purposes.

Are there are strict rules around short-term holiday lettings?

There are although whether they are as strict or effective as they were supposed to be is open to debate.

Tell me more?

Holiday lettings on platforms such as Airbnb and booking.com used to be a free-for-all – at least in terms of who could put a property up for rent for the tourism market and what planning rules they had to follow. Then in 2019, special planning permission was introduced for short-term letting in cities and towns in Rent Pressure Zones (RPZs), particularly for people letting out properties they were not living in themselves.

Why would such rules be introduced, do we not want to attract more tourists and make prices more competitive?

The State has to balance the rights and needs of people living here and people visiting the country. While online booking platforms offering short-term rentals are now a significant feature of the incredibly valuable tourism sector, there were fears the more lucrative prospect of holiday rentals was sucking much-needed properties out of the stock of long-term rental and exacerbating the housing crisis.

Fair enough, so what did the new rules do?

Well, they were supposed to curtail the letting of properties to tourists that might have been used for long-term rental to people actually living here. The rules meant that property owners who want to offer short-term or holiday lets on Airbnb or through any other channel must first obtain planning permission unless they are renting out their own home for short periods of less than three months in any given year.

So, how many properties are available for rent now?

According to Fáilte Ireland as many as 30,000 properties are available for short-term letting at some points throughout the year but availability depends very much on the time of year and the platform being searched. For example, there were 364 properties in Dublin city on Airbnb for the weekend of April 16th at the time of writing with the platform suggesting the average nightly price was €290 or an income of €9,000 over a month for the owner – more than four times the average rental for a property in the city. Nationally, for the same dates there were more than 1,000 properties available on the platform with an average charge of €188, again substantially more than the long-term rental costs.

Is there any more information out there?

Data from the website insideairbnb.com – which is unconnected to the platform – suggests there are 25,303 listings in Ireland with 64 per cent of them entire houses. The average nightly charge is €186 with Airbnb hosts earning an average of €11,452 a year.

What difference did the rules make?

According to the Department of Housing, the rules had “some, albeit it, limited effect”. At an Oireachtas Tourism Committee hearing earlier this year, a spokesman said the legislation to regulate the short-term letting sector had turned out to be “not ideal” due to some “practical difficulties” when it came to local authorities enforcing the rules.

What kind of practical difficulties are we talking about here?

One which has been highlighted is that online platforms advertising short-term lettings do not publish exact addresses until after a property has been booked. That stops would-be visitors making contact with the property owner themselves and potentially undercutting the platform’s prices. It also means if a local authority is trying to ascertain if a certain property on a certain street is up for rent on a short-term basis in breach of the rules, it has to make a booking. This would obviously take time and cost money so it is a non-runner.

Did many people get planning permission for short-term rentals?

No. About 50 planning applications were granted by 22 local authorities over the four years since the rules came into force. Admittedly two of those years were blighted by Covid but even when that is factored into the equation, the number is very, very small.

But stricter rules are being implemented, right?

That is certainly the plan. There are new rules coming down the tracks which will see an even greater shake-up in the holiday rental sector. Under the plans announced in December, property owners offering accommodation for periods of up to and including 21 nights will need to be registered with Fáilte Ireland.

And who will police the new rules?

Fáilte Ireland will. It will be charged with monitoring online platforms to ensure compliance with the obligation for advertised properties to have a valid registration number. The registration numbers will be linked to Eircodes, which will allow local authorities to check if the properties have the correct planning permission for short-term letting.

And what happens if people don’t follow the new rules?

Fáilte Ireland will be able to levy a €300 fixed penalty notice on property owners who advertise their property without a valid registration number.

€300? Sure that’s not even a weekend’s worth of lettings?

The penalties don’t end there. It will also have the option of bringing cases to the District Court where the maximum fine is up to €5,000. And crucially, online platforms listing properties that do not have a valid registration number can be fined €5,000 for each property listed.

Will Fáilte Ireland have staff to do this job?

The plan is to get 10 dedicated staff to set up and maintain the register, with an allocation of €5 million to police the new rules. The Fáilte Ireland officers will have similar powers to their counterparts in agencies such as the Competition and Consumer Protection Commission and the Food Safety Authority of Ireland. They will be able to inspect properties to determine how they are being used although it is hoped they won’t have to do that given the platforms will have to ensure a degree of compliance themselves.

What difference will the new rules make?

The hope is that of the 30,000 properties advertised as short-term lets in Ireland, about 12,000 will be brought back into the long-term rental market as a result of the new measures.

That will help with the housing crisis for sure. The new rules will be coming into force soon, right?

Well, that was the plan. But it hasn’t quite worked that way just yet. The Government had hoped the legislation would be enacted by the end of March. But March has come and gone and the European Commission has extended a “standstill period” while the new law is being considered with that delay set to last until December 22nd at the earliest.

Conor Pope

Conor Pope

Conor Pope is Consumer Affairs Correspondent, Pricewatch Editor