Changing rules for short-term letting (STL) platforms, such as Airbnb from Dublin to Berlin
As tourism increases and rents continue to rise due to increased demand for housing, many argue that short-term letting (STL) platforms, such as Airbnb, are compounding the housing crisis in Ireland, already hard hit by insufficient construction and a lack of affordable and social housing.
Rents have risen more than 23 percent since 2015—the fastest pace in the European Union, according to a report by the European Commission. “Inflation in rents seems chiefly determined by the gap between housing supply and demand,” the report states.
Tourists visiting Ireland may not realize, however, is that the short-term letting they intend to rent in Dublin, or Cork, means one fewer option for homeless individuals facing Ireland’s housing shortage. Multiply that by the number of homes in Ireland currently listed for rent on Airbnb, for example, and it translates to a significant number of unavailable options for homeless residents and others seeking rental accommodation.
Impact of Airbnb on social housing
In Ireland, property owners often short-term let, or “homeshare,” a part or all of their homes for a period of time, usually to tourists who are visiting the country. Many see it as a way to supplement their day-to-day bills or pay for their own holidays. In 2018, more than 10.6 million foreigners visited Ireland, an increase of 6.9 percent over 2017, according to the Central Statistics Office (CSO).
“[A]s homesharing has become more popular as a form of tourism letting, it has resulted in some professional landlords withdrawing houses and apartments that would normally be rented on a long-term basis to instead rent them out as short-term lets,” said Eoghan Murphy T.D., minster for the Department of Housing, Planning and Local Government.
Further, Minister Murphy said that, “in a time of housing shortage it is unacceptable that rental homes would be withdrawn from the letting market, particularly in our cities and large towns where rents are high and supply is still constrained.”
Housing activists have called for all-out bans on Airbnb and other STL platforms in Ireland, claiming they are contributing to the housing shortage. The properties could instead be used for long-term rentals for locals, they claim.
Nearly 10,000 homeless individuals—6,363 adults and 3,624 children—were living in emergency accommodations in Ireland in January, according to a recent Homeless Report by the Department of Housing, Planning & Local Government.
The National Homeless and Housing Coalition, established in 2015, arose out of a recognised need to come together to demand action to address the homelessness and housing crisis as a matter of urgency and has been campaigning to highlight what it calls a “deepening crisis.”
Ireland isn’t the only tourist destination feeling the negative effects of Airbnb and other STL platforms. Many cities around the world are facing similar housing shortages and increased home prices and spiraling rents, and have taken action in an attempt to offset the impacts.
Berlin, in 2018 relaxed more restrictive legislation introduced initially in 2016 that barred the repeated, unlicensed leasing as holiday lets. In 2016 alone, 2500 apartments were put back on the rental market following the ban.
The current frame work permits lettings by owner –occupiers under certain conditions and also permits the renting of second homes for up to 90 days a year. All would be landlords are required to procure a general permit from their borough. There are also measures to ensure that property is not left untenanted / unoccupied for periods of greater than 3 months. Under the new rules the maximum penalty for breaking the rules has been increased five-fold to €500,000.
Airbnb and the law
In response to the housing crisis, new home sharing laws in Ireland affecting STL platforms such as Airbnb come into effect on 1 June 2019 and require that rentals only be allowed in a person’s primary residence. There also is a 90-day rental cap and homeowners are only allowed to rent out their homes for 14 or fewer days at a time. Homeowners renting out their homes are required to register with local authorities. Additionally, homeowners with second properties are not allowed to rent their homes unless they previously had permission.
Minister Murphy said that further reforms may be needed and he will work with the tourism sector and STL platforms to regulate STL as a tourism activity.
Planning law has also been invoked to curb the STL market. The initial concept of Airbnb where rooms were rented intermittently for short term stays would not need planning permission. A recent decision by the Irish Planning Appeals Board (An Bord Pleanala) that constant short –term rental in most cases would require planning permission as it amounts to a material (i.e. significant) change of use. In this instance it was determined that there was significant intensification of use, with regular movement of renters and servicing staff and the activity was fully commercial and let on a year round basis. Issues such as loss of amenity of neighbours, increased traffic, and public health risks were also considered.
Whether the new regulations—from Dublin to Berlin—help to minimize the housing crisis remains to be seen. There is a view that restriction of the rights of property owners to engage in short term lets is warranted where it improves the possibility of improving the ability for people on low income to secure housing
Ireland’s Joint Committee on Housing, Planning and Local Government has warned that enforcement of the new regulations could be challenging. “The committee recognizes the importance of the new proposed regulations but also considers enforcement to be essential if the regulations are to be effective in any meaningful way,” wrote Maria Bailey of Fine Gael on February 4th .
The Committee also advised that legal advice should be sought to ensure the regulations do not breach constitutional property rights.