Frank McDonald: It may soon be too late to do anything about some Airbnb lets

It’s now nearly seven years since An Bord Pleanála ruled that short-letting an apartment to tourists via Airbnb constitutes a change of use from residential to commercial that requires planning permission. Yet the number of “entire homes” being short-let in Dublin alone has soared by 57 per cent over the past year, according to the Sunday Times.

Even in the midst of a housing emergency, with record levels of homelessness, the Government has so far failed to introduce an effective regulatory regime for landlords short-letting their properties on Airbnb, HomeAway, Vrbo/Expedia and other platforms, with the aim of recovering housing stock sacrificed for much more profitable tourism use.

It was on October 17th, 2016, that An Bord Pleanála issued its ruling on a case taken by me on behalf of Temple Bar Residents. It involved the conversion of a two-bedroom apartment in Crown Alley, which was being short-let through Airbnb and had “earned” rental income of €79,380 in the previous year – a whopping €6,615 per month, vastly more than any long-term rental.

However, instead of moving swiftly to deal with this disruptive phenomenon, then minister for housing Simon Coveney merely issued a circular to the local authorities and got his department officials to engage in a dialogue with Airbnb – whose European HQ is located in Dublin – on the introduction of a “voluntary code”, rather than statutory regulations.

Housing is the top issue for voters, especially those aged 25-34

---

Voters largely unmoved by resignation of Varadkar and elevation of Harris

---

Poll analysis: Housing and immigration are making the headlines, but other topics are becoming more prominent

---

Is Dublin still an option for first-time buyers?

---

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

Coveney’s laissez-faire approach was clear. As he told the Irish Independent after An Bord Pleanála’s definitive ruling, Airbnb had been a very positive thing for many homeowners and visitors to Ireland. “I wouldn’t like to undermine that, particularly in a country that relies on so many people coming and going for weekend breaks and so on,” he said.

Airbnb had already been lobbying the Department of Tourism to press for “measures . . . to ensure Airbnb’s continued growth in Ireland” and was taking legal actions against cities in Europe, the US and elsewhere that imposed regulations to safeguard their housing stock by limiting short-term rentals of “entire homes”, rather than renting out spare rooms.

At the time, at least 1,800 apartments and houses in Dublin were being short-let via Airbnb alone, and this number continued to grow year after year until it reached a peak of 5,000 in 2019, before Covid struck. Nearly all of these had previously been people’s homes and almost none of them had the requisite planning permission for change of use.

The Government’s Strategy for the Rental Sector, published in December 2016, recognised the negative impact of “potentially significant numbers” of properties being withdrawn from the long-term rental market for short-term lets, noting that “the growing use of online platforms may, if not adequately regulated, facilitate and encourage this trend”.

A widely representative inter-departmental working group on “short-term tourism-related lettings” was established, and its report in October 2017 recommended that “all online intermediaries of short-term lettings” would need to have a licence and comply with statutory obligations, including planning permission. Its recommendations were not adopted.

In the same month, after conducting hearings on the issue, the Oireachtas Joint Committee on Housing also recommended a licensing system for short-term lets under which “hosts” would have to be registered with local authorities and all relevant information – name, address, letting type and availability – shared with them. This was also ignored.

Eventually, in June 2019, then minister for housing Eoghan Murphy introduced a set of regulations that did not include any licensing regime and placed no obligation on the online platforms to ensure that clients short-letting entire homes had planning permission to do so. The regulations applied only to Dublin and other designated “rent-pressure zones”.

Local authorities were left with the onerous task of proving that any house or apartment in a rent-pressure zone was being operated as a holiday let for more than a 90 days a year. They had to hire more planning enforcement officers to deal with illegal short-lets and made some progress in recovering several hundred apartments and houses for long-term use.

[ Why new short-term letting laws won’t increase long-term rental supply ]

It was obvious that more stringent regulations were needed. So in August 2020, I raised this via Twitter with the new Minister for Housing, Darragh O’Brien, and he agreed to meet me in his office at the Custom House to talk about what needed to be done to deal with what, in effect, was widespread illegal profiteering. “I’m going to regulate the platforms,” he declared.

It wasn’t until last December that the Government approved plans for a register of short-term holiday lets to be administered by Fáilte Ireland. Owners of such properties would have to register with the agency, confirming that they have the requisite planning permission, while online platforms would be obliged to advertise only properties that are duly registered.

Quite unexpectedly, the European Commission intervened in April stating that the proposed Registration of Short-Term Tourist Letting Bill, which provides for a range of penalties up to €5,000 for offenders, may be too restrictive and not sufficiently targeted at densely populated areas. So it’s now subject to a “standstill period” until December 22nd.

In the meantime, short-letters are having a field day. A random search on Vrbo turned up a two-bedroom apartment close to St Stephen’s Green renting for the equivalent in US dollars of €344 per night. With the addition of a €154 service charge and a “host fee” of €105, the total cost of a three-night weekend in early September amounted to €1,291.

The real danger now is that all the foot-dragging over regulation of short-lets runs into the “seven-year rule” on planning enforcement, which means that any unauthorised development (including change of use) that continues for more than seven years without action being taken acquires planning permission by default. And this escape hatch is now opening up.

Anyone who can produce documentary evidence that they’ve been an Airbnb host for seven years or more will be in the clear. As a result, with each passing year, we may never recover much of the housing stock lost to tourism.

Frank McDonald is a former environment editor of The Irish Times