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Dublin: 23 °C Monday 25 June, 2018
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'We are putting tourists into houses and homeless people in hotels'

AirBnB has been disruptive, not just to hotels’ market share but also to rent prices and rental supply, writes Patrick Costello.

Patrick Costello Green Party Councillor

AIRBNB AND SIMILAR short-term house sharing platforms offer real opportunities to both hosts and guests, and indeed to communities that are the real host.

However, while there are many other issues in the rental market in Ireland, particularly our major cities, the large volume of commercial short-term lettings on such platforms have caused significant problems.

We can get the balance of benefits and harm right but we have to put in effort to make it work. So far this has not happened and the sad reality is that we are putting tourists into houses and homeless people in hotels.

Disruptive

AirBnB has been disruptive, not just to hotels’ market share but also to rent prices and rental supply. AirBnB has been shown to drive up rents overall – research has repeatedly shown a link between increasing AirBnB listings and increases in average rent in the same neighbourhood.

It is important to note that the effects were more pronounced in areas with less owner-occupiers, where apartments and tenancies would be rented out on a commercial basis year round. AirBnB has also reduced rental supply.

Daft recently reported that about half the rental properties in Dublin were only available on a short-term basis through AirBnB. The accuracy of this assertion is difficult to test as much of this data is guessed at by third party groups such as Inside AirBnB who pull what data they can from a public website but who can never see the real workings.

Again, reduced supply is a result of commercial operators renting properties all year by way of short-term lets.

Loss of revenue

One other effect of commercial AirBnB hosts has been the loss of revenue to councils. In response to a question from myself, Dublin City Council stated: “While aparthotels are rateable, no rates were charged on any individual residential properties that were used for the provision of accommodation on a short-term basis.”

While profiting from tourists coming to cities and towns, they are not paying their contribution to keep the community running so tourists will come.

The solution is simply robust regulation. We have seen in recent times city after city introducing regulations and control on AirBnB and other short-term letting services.

Many American and Canadian cities have long done so, as have European cities like Paris, Berlin, and Barcelona. Most recently Madrid announced strong and far reaching regulations. Their new regulations would completely rule out the sorts of commercial operators that rent out properties on a short term basis year round.

Regulations

Any regulations that are introduced must address the key difficulties – commercial operators and the lack of transparency. While a clear line between what is considered commercial and not commercial has been established by planning law, a positive obligation must be placed on AirBnB to regulate their trade.

When questions over the issue of tax paid on rental earnings arose the Revenue Commissioners has the power to demand the information they needed. It should be made an obligation on AirBnB to inform planning authorities, revenue and the local rates office that a host has crossed into a commercial volume.

Equally it could be an obligation on AirBnB that a host is prevented from using their platform for commercial volumes without presenting proof of planning permission, tax clearance, rates payments, and an appropriate health and safety setup. Either way, AirBnB cannot be passive in its facilitation of questionable practices that are harming communities.

Enfeebled local government

Given our enfeebled local government our councils don’t have the powers to introduce the regulation that other cities have. In Dublin we have relied on planning permission for what would be commercial operations; however there is a real challenge with enforcement.

There is a difficulty for planning enforcement staff to gather the evidence of this – again much of the information is not made public leaving enforcement staff a real challenge to make a case. For real regulation to get an appropriate balance and to put obligations on AirBnB as facilitator local authorities are left in the unfortunate position of waiting on central government to act.

The reality is this government have done nothing concrete. The Oireachtas Housing Committee published a report, but its recommendations have not been acted on. The minister for Housing has established a cross-government working group – this was due to publish a report in December 2017 but is still being worked on at this point.

In so many other areas of housing policy this government has shown an inability to act, it is disappointing but not surprising that it is the same in relation to short term lettings.

We can get the balance of benefits and harm right but we have to put in effort to achieve this, effort this government has not put in at all.

Patrick Costello is a Green Party Councillor for Rathgar – Rathmines, and sits on both the Housing and the Planning strategic policy committees in Dublin City Council.

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About the author:

Patrick Costello  / Green Party Councillor

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