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Are short-term lets to blame for the shortage of rented accommodation?

Legislation using the planning system to curb boom in holiday lets isn’t working

There are just five homes currently being advertised online for long-term rent in Killarney, Co Kerry, yet there are 309 listings for full properties on the short-term letting platform, Airbnb.

The situation in the popular tourist town is just one example of a national picture as the number of rental properties being advertised on sites such as Daft.ie and Myhome.ie hits historic lows against the backdrop of a resuscitated travel industry.

The pandemic saw a temporary shift of a few thousand listings from short-let platforms to the home rental market, but the easing of the public health restrictions has seen many of these properties return to the higher-yield holiday let sector.

Measures introduced in 2019 that sought to limit the number of rental properties being diverted from housing to the short-term letting market are not working, according to Sinn Féin housing spokesman Eoin Ó Broin.

“The overwhelming majority of properties that are being advertised are not legally compliant with [former housing minister] Eoghan Murphy’s planning regulations,” he told The Irish Times.

Since July 2019 people advertising a property for let on platforms such as Airbnb or Booking. com have to either register for an exemption from planning permission with their local council, or get planning permission.

The rules, which only apply in areas designated as rent pressure zones (Killarney one), allow exemptions to people who are advertising their principal private residence as a holiday let as long as they don’t do so for more than 90 days in any one year.

Figures Ó Broin has sourced from local authorities in Dublin City, Cork, Galway and Sligo show that the number of exemptions registered and planning permissions granted is significantly less than the number of properties being advertised for short-term rent.

“Only a tiny number of listings have engaged with the planning authorities,” he said.

Meanwhile the efforts of the local authorities to enforce the regulations appear to be floundering.

Figures supplied to The Irish Times this week by Dublin City Council show it registered 438 exemptions since July 2019, and received only 21 applications for planning permission, of which five were granted.

Yet Airbnb currently has more than 773 listings on its website for entire homes – as against a room in a shared property – in the capital.

Conviction and fine

The first conviction for a breach of the 2019 regulations in the Dublin City council area happened at Dublin District Court on Thursday.

Judge Anthony Halpin imposed a fine of €1,000 and costs of €3,459 against Complete Guest Management Ltd, arising from the letting of apartment 18 Adelaide Square, Whitefriar Street, Dublin 8.

The conviction is believed to be one of the first to have occurred in the State since the new regulations came into effect.

It is because the 2019 regulations are apparently being widely ignored that Ó Broin introduced a Bill in the Dáil this week which would provide for daily fines for platforms and letting agents that advertise short-term lettings that do not have the requisite planning permission or exemption. Introducing such a measure would not mean that all the properties currently being improperly advertised would move back to the rental market, he said.

“But I do believe you would get some and potentially a significant amount of long-term rental properties back, and given that our private rental sector is shrinking every single month … any extra rentals that we can get, we need.”

Airbnb points out the category “entire homes” on the platform can include a segregated part of someone’s home, converted barns, yurts and other types of spaces not suitable for long-term housing.

“We welcome regulation and want to work with Ireland on rules, which is why we have had active discussions with the Government on how to implement a registration system,” said Derek Nolan, head of public policy in Ireland with Airbnb.

Figures from Cork City Council show it received six applications for planning permission for short-term lets since July 2019, and none were granted.

Meanwhile, Galway City Council received only five planning applications to permit short-term rentals since July 2019, and it has not granted permission for any property to be let short term. Yet since tourism activity resumed, the council has been receiving an increased level of complaints about short-term lettings that are unauthorised, a spokeswoman said.

“This appears to be most prevalent in the immediate city centre, particularly with units which can cater for larger groups renting at weekends, presumably for parties.”

Complaints received by the Galway council’s planning department have to go through a process set down in the planning regulations, but a “number of difficulties” are being encountered, she said. Often the summer season is over by the time the prescribed process has arrived at the point when an enforcement letter is issued.

“While an unauthorised use might cease once investigated, there is nothing to say that the operator will not recommence the short-term lettings again the following year.”

When the property is in an apartment block, the council can find itself struggling to discover who is doing the actual letting.

“In the absence of information regarding ownership, the local authority is not in a position to assist the complainant, who is often an adjacent neighbour.”

Often when ownership is established, it is a legal entity, or the property is in the possession of a receiver who has in turn given a tenant a long-term lease. The council is then often told that the identity of this person cannot be disclosed for data protection reasons.

Revenue

Other issues facing the council include management companies carrying out short-term lets in blocks and saying they cannot reveal the owners’ details for data protection reasons; and corporate owners of multi-unit blocks saying they are unaware of holiday lets being offered, the spokeswoman said.

“We believe that the only real way of resolving this is for the Government to require that the booking platform is required to provide details of lettings to Revenue, including the number of days occupied.”

The details recorded by Revenue should include information as to the ownership of the properties, the spokeswoman said.

The Department of Housing now recognises that the 2019 regulations are flawed because of their reliance on the planning process as a way of enforcing the rules.

A new regime is being developed under the auspices of the Department of Tourism, which is to oversee a system whereby Fáilte Ireland will set up a short-term letting registration system. But Killarney councillor Niall Kelleher of Fianna Fáil does not believe the accommodation crisis in his town is the fault of platforms such as Airbnb.

Contrasting the number of properties on such platforms with the number of homes for longer-term rent being offered is “not comparing apples with apples”, he said.

The town is struggling to cope with inward migration, often of people from the area who are returning there to live.

“We are having a jobs fair next week in Killarney. One of the biggest problems we have is finding accommodation for people to work here. There are restaurants that are limiting their opening hours because of not being able to get people. It is not just with tourism. It is also true of large companies that are based here. They are struggling to get places for their staff to live.”

The accommodation crisis that Killarney is experiencing is being faced in towns and villages across the country, he said, because houses and apartments are not being built.

“You have other counties that are not a big tourism destination, but they also have struggles when it comes to [rental property] being available. It is a countrywide problem.”

Because of the acute shortage of homes for rent, many letting agents are not advertising online because they already have lists of people looking for places, and advertising can provoke a huge response, Kelleher said. He is not supportive of Ó Broin’s proposed new legislation.

“I’ll tell you where we are coming to with rental property. We are over-regulating and costing so much to prevent the few from doing something that is wrong, and it is driving the majority [of landlords] out.”

Figures given recently by Kerry County Council show 187 warning letters had been issued in respect of potential breaches in Killarney of the short-term letting regime since the town became a rent pressure zone in April 2020, and two enforcement letters have issued. There have been just six planning applications under the new regime, with two being granted.

Ten years ago there were up to 20,000 properties being advertised online in the national home rental market, but now that figure is often below 1,000, according to Marian Finnegan, managing director of residential sales with Sherry Fitzgerald. The data collected by the estate agents on second-hand sales shows that for every one property being bought by a landlord, two are selling.

“We have a huge problem with an exodus of private landlords out of the rental market because it is so regulated, the tax take is so high, the yield is so low, [and] you can’t borrow money to invest without paying a penal interest rate. It is not an attractive market to go into.”

The accommodation crisis is particularly acute outside Dublin, because while there is insufficient building going on in the capital, the situation is even more acute outside it, she said.

“If we are looking for something to help solve the rental crisis, it doesn’t lie with Airbnbs. That is a bit of an aside. I know in lots of other countries they have put restrictions on it. Maybe there is some value to doing that. But I don’t think it is going to solve what is a more deep, intrinsic problem in terms of the lettings market. It might prove to be a little bit helpful. But it won’t be enough.”