Regulation of short-term letting sector belated but welcome

From July 1, potential rental homes will no longer be available short-term, except with planning permission and even then rarely, says Eoin Ó Broin

After much delay, the Government has finally introduced regulations for the short-term letting sector. Last week, the Oireachtas Housing Committee unanimously passed Housing Minister Eoghan Murphy’s amendments to the Planning and Development Act 2000, which are set to become law before the summer.

The new rules will only apply to properties within rent-pressure zones and, as with the 4% cap, will expire at the end of 2021, unless extended by further legislation.

Based on proposals made by the Housing Committee in October 2017, the regulations will operate on three levels and will apply from July 1, a month later than originally announced.

If you let out a room in your own home, or let out your entire home, for less than 90 days in a year, you will not be affected by the new rules. You can carry on as before, without a need for planning permission or any additional charges.

If you let out a room in your own home, or let out your entire home, for more than 90 days, you will need to apply to your local authority for planning permission. Councils will be given guidance on how to deal with such applications.

The cost of your application will be €3.60 per square metre for change-of-use, amounting to €180 for a small flat or €576 for a three-bed family home. If granted planning permission, no other costs (such as commercial water charges) will apply, as this is your principal residence.

If you let out a second property, or entire properties, commercially, you will have to secure planning permission, irrespective of how long you let the property for. Standard planning fees will apply, as will commercial water charges. However, during last week’s Housing Committee meeting, Minister Murphy said that he expects the vast majority of these properties (i.e. non-principal residences) to be refused planning permission for short-term letting. He repeatedly referred to a ‘blanket ban’ in all but the most exceptional of cases.

So, the new regulations will have little impact on genuine, peer-to-peer home sharers or those letting out their own home part-time.

However, for commercial, short-term lets in rent-pressure zones, the Government’s clear intention is for those properties to be transferred back to the long-term rental market.

The legislation defines short-term letting as 14 days, but this technical description does not have any impact on the planning permission requirement or, where planning is granted, how long a property can be let.

Also, where a property currently has planning permission for short-term letting, this will not be affected by the new rules.

It was disappointing that the Government did not also bring forward regulations for short-term letting platforms and agents. This was recommended by the Oireachtas Housing Committee in our 2017 report.

The committee was strongly of the view that there should be a legal requirement for platforms to share information with both the local authority and Revenue on the length of time hosts let out their property. We also felt it should be an offence for platforms or agents to advertise non-compliant properties.

In the absence of such measures, all of the onus for the effective enforcement of the new rules will fall on local authorities.

This means that council planning departments will need adequate staff and resources, not only to process planning applications, but to track compliance.

Enforcement of short-term letting has proved difficult in some cities, as individual hosts and some platforms have deliberately sought to circumvent the rules. However, other cities have high levels of compliance.

The key to getting it right here is to ensure that hosts, platforms, and agents have clear information as early as possible on how the new regime works. There must be a consistency of message across all councils, and applications for planning permission must be dealt with quickly.

The Government must send out a very strong signal that it intends to fully enforce the new rules and that non-compliance will be dealt with firmly and quickly.

As one of the first TDs in the current Dáil to call for the regulation of the short-term letting sector, back in 2016, I welcome the Government’s move. We need clear and fair regulations that protect guests and hosts, while ensuring that short-term letting does not have a disruptive impact on the private rental sector.

Unfortunately, in the absence of any regulations, a significant number of rental properties have been lost to the market because of short-term letting, particularly in our urban centres.

While not the cause of our rental and homelessness crises, this loss has made things worse.

Ultimately, a large volume of good-quality, affordable rental accommodation, provided by councils and approved housing bodies, along with greater security of tenure and rent certainty in the private sector, are the only long-term solutions to our dysfunctional rental system.

However, ensuring that short-term letting is properly regulated is also necessary.

Indeed, the Government should reconsider the 2021 sunset clause and simply allow local authorities to relax the ‘blanket ban’ on commercial, short-term lets in rent-pressure zones as the rental and homelessness crises ease.

Abandoning regulations fully would be short-sighted and could result in future disruptions. The short-term letting sector, just like the private and social rental sectors, needs fair and transparent regulation that protects hosts and guests alike.

Eoin Ó Broin is a Sinn Féin TD for Dublin mid-west and spokesman on housing, planning, and local government. His book, HOME: Why Public Housing is the Answer, will be published by Merrion Press in May.

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