NEW SHORT-TERM letting regulations came into effect today across Ireland.
Under these new laws, home-sharing on platforms such as Airbnb will, in effect, only be allowed where a house is a person’s primary residence inside designated ‘rent pressure zones’.
Home-sharing – people renting out a part or all of their home for a period of time, usually to tourists who are visiting the country – will now operate under strict limits and be monitored by local authorities.
So, here’s a quick explainer about who is affected by these new regulations.
Why have these regulations been brought in?
In areas of high demand, there have been concerns for some time that professional landlords are withdrawing houses and apartments that would normally be rented on a long-term basis and are instead renting them out as short-term lets, reducing the availability of long-term rental accommodation.
These new rules will essentially operate on a ‘one host, one home’ model in areas of the country where there is deemed to be a high housing demand.
This means a number of new rules – and potential penalties – for those affected by the regulations.
What if I rent out a room in my house but only occasionally?
In that case, you can rent out that room all year-long so long as that house is your ‘principal private residence’ – i.e. where you normally live.
The only way the new rules will affect you is that you’ll need to register this with your local authority.
So, what if I rent out the whole house?
This is really where the new regulations come into force.
Under the rules, an annual cap of 90 days applies for the renting out of a home and homeowners can only rent out their homes for 14 days or less at a time.
This also needs to be registered with your council.
Right. So, what if I have a second home and want to put that on the short-term rental market?
People who currently let – or want to let – a second property on a short-term basis will now have to apply for ‘change of use’ planning permission.
So, if you own an apartment that was bought as an investment and want to rent it out on Airbnb for specific periods of time you’ll need to seek a special planning permission for this type of use as it is not your principal private residence.
This process will also involve the usual planning time frames and fees attached.
However, the Department has said that in areas of high housing demand (Rent Pressure Zones) – such as Dublin or Cork – it’s unlikely that planning permission would be granted at all.
Rent Pressure Zones (RPZs) were first introduced in December 2016 as a way to address spiraling rents. Annual rent rises can not increase by more than 4% in areas considered RPZs.
If there’s a material change of use to a house or apartment and the owners have not been granted an exemption, this may result in a prosecution for unauthorised development.
Are there penalties under the new regulations?
There sure are – at least under planning laws.
The maximum fine for non-compliance with planning breaches is a €5,000 fine or six months imprisonment – or both.
If the offence continues, a person could face an additional sanction of €1,500 per day for each day the breach continues.
The local authorities will also have the power to seek a court order that any unauthorised activity must not be continued.
How will these regulations be monitored?
Well, the Department of Housing has said that additional resources will be provided within Dublin City Council’s planning section to oversee the registrations and to monitor enforcement.
People found not to be in compliance with these changes will risk criminal conviction under the legislation.
However, Dublin City Council has said it will need up to €750,000 to set up a dedicated team to enforce new short-term letting rules in the city – €350,000 more than originally thought.
The council is by far the largest in terms of short-lettings so therefore will require additional resources.
The council plans to set-up a dedicated task force with a number of additional staff members to enforce the new regulations over the coming months.
Have similar laws been implemented around the world?
Yes.
Amsterdam back in December 2016 signed an accord it hailed as “unique in Europe” with Airbnb banning rentals beyond 60 days a year.
Berlin, which has seen real estate prices soar in recent years, had months earlier passed one of the continent’s strictest regimes to hobble further Airbnb expansion entailing the rental of a maximum one room in one’s dwelling with €100,000 as a deterrent.
Even so, since May 2018, that has been relaxed to allow renting out one’s entire private apartment.
In September last year, Toronto city introduced new laws which ensure a person can only rent their home as a short-term let if it is their principal residence.
Vancouver, which introduced similar rules, said since the regulations kicked in the number of listings on Airbnb fell from 6,600 in April to 3,742 by September.
How will these new rules affect platforms like Airbnb?
The impact of prolific Airbnb-listed properties on the Irish rental market has been a point of discussion and debate for some time.
In recent months, the platform – which has serious skin in the short-term rental game – has been keen to impress upon the government the effects these new rules could have on its business model.
On several occasions from September last year, Airbnb representatives met with TDs, councillors and several ministers to discuss the proposed short-term letting regulations.
Laying out its business case to Taoiseach Leo Varadkar in late August, Airbnb wrote – in documents released to TheJournal.ie under Freedom of Information – that the company “are in full agreement with the government that there needs to be rules put in place”.
However, community support head Aisling Hassell added that these rules “need to be balanced and targeted at only those who are acting ‘commercially’ and not damage the lives of those who are benefiting from the abovementioned extra income”.
TheJournal.ie has reported that new data suggests that the majority of revenue generated on the platform comes from rentals that will be deemed ‘commercial’ under new regulations that came into effect today.
These are the houses and apartments rented for more than 90 days per year – rather than people sharing their own homes.
The data, as analysed by TheJournal.ie, suggests that around 4,978 ‘entire homes’ on the platform appear to have been rented out for more than 90 days – a good indicator that the host is not living in the property and one that will be used under the new regulations to label such a let as a commercial venture.
And, under the new rules, those commercial Airbnb operations in Rent Pressure Zones will need to apply for planning permission.
Will these new regulations be effective?
Time will tell.
Considering the delay in resourcing Dublin City Council and the slow pick-up in registering properties as short-term lets, questions have been raised about how effective the new rules will be.
Under the regulations, there is also no requirement that property listing sites hand over any information, and they face no potential penalties.
Dublin councillor Patrick Costello has said Airbnb and other platforms should be required to share data on hosts, much as the companies were already required to hand over taxpayer details to Revenue.
Others, like Sinn Féin housing spokesman Eoin Ó Broin, have said local authorities such as Dublin City Council should focus on a few, high-profile cases that involved large-scale short-term letting “to send out a very clear signal” to other operators that they meant business.
Ó Broin said: “It’s like a lot of things – you can have very good regulations, but unless there are the staff and the resources in the local authorities to be able to enforce them, their effectiveness is open to question.”
With reporting from Peter Bodkin
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