Planning permission requirements for short-term lets 'largely ineffective', says ESRI report

The report, published today in conjunction with the Department of Housing, notes that the number of planning applications received in 2023 to register a property as an Airbnb - just 91 dwellings - is dwarfed by the 9,142 Airbnbs operating in rent pressure zones (RPZs) at the same time. File picture

A requirement on short-term lets like Airbnbs to seek planning permission in order to clamp down on the number of such rentals in Ireland appears to have been “largely ineffective”, according to new research.

Likewise, it is unlikely that the prevalence of short-term rentals across Ireland is directly responsible for the severe lack of rental supply currently impacting the country’s tenant population, according to the study by the the Economic and Social Research Institute (ESRI).

The report, published today in conjunction with the Department of Housing, notes that the number of planning applications received in 2023 to register a property as an Airbnb - just 91 dwellings - is dwarfed by the 9,142 Airbnbs operating in rent pressure zones (RPZs) at the same time.

The requirement for an owner to seek planning permission in order to profit from a short-term let in a rent pressure zone was first introduced in 2019, with the goal of bringing those properties back into the long-term rental market. That regulation is due to remain in place for as long as RPZs themselves exist.

Further legislation to clamp down on Airbnb advertising was introduced in 2022, but has never been enacted.

“Voluntary registration and change of use planning permission requirements for short-term lets in rent pressure zones appear largely ineffective,” the report states, adding that effective policy responses will be required to differentiate between how Airbnbs operate in different contexts.

“The current registration system and regulatory approach require reform which must cater for differences across local markets,” the report said.

“Different policy responses are likely to be required in urban areas with large rental markets, compared to coastal towns with more moderate rental sectors.”

The study’s findings come as the number of short-term lets has risen while rental supply has decrease markedly, leading to calls for the sector to be more tightly regulated.

The study also found at least two-thirds of Airbnbs refer to entire properties, as opposed to apartments or individual rooms, with the majority to be found in popular tourist areas.

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It added that there is at least one Airbnb for every 10 privately-rented properties in just under a quarter of Ireland’s 166 local electoral areas. The research nonetheless found “no evidence” to connect the rise in the number of Airbnbs with the fall in new tenancy registrations seen between 2019 and 2023.

While it cannot be concluded that Airbnbs and other short-term lets have not had a “detrimental effect” on the private rental market, the study said, it is also likely that the short-term sector “is not the primary cause” of a lack of new tenancies and the general lack of supply nationwide.

The report also found a strong likelihood that Irish Airbnbs have in many cases evolved from properties previously listed as private holiday homes in rural tourist hotspots, suggesting that in the absence of a short-term let industry those dwellings would regardless still not form part of the private rental sector.