Ireland has the weakest short-term letting rules in Europe

The latest attempt by Government to regulate short-term letting and bring long-term homes back into use looks set to be as useless as its predecessor, writes TD Eoin Ó Broin

‘In order to trade, operators must be on the register. To get on the register, operators will have to demonstrate planning compliance. And this is where the consensus breaks down.’ File picture

After much delay, the Dáil will debate the Government’s short-term letting register legislation this week.

The minister responsible, Peter Burke, wants to ram the bill through the Oireachtas before the end of the month. Having missed the March 31 deadline, he doesn’t want the embarrassment of a second delay.

From December 1, all those engaged in short-term letting will have to register with Fáilte Ireland. The proposal has cross-party and industry support.

In order to trade, operators must be on the register. To get on the register, operators will have to demonstrate planning compliance. And this is where the consensus breaks down.

The planning rules are not contained in the legislation. Instead, they are set out in a 23-page planning policy statement, published in draft form by the housing minister James Browne in June.

A final version of the statement will go to cabinet this month, to be in place when the register opens in December.

No Oireachtas scrutiny of these important regulations is required under law. However, meetings of the Housing Committee have been requested to discuss the draft rules with department and local government officials, the Irish Planning Institute, the tourism sector, and housing and homeless organisations.

Unfortunately, the draft planning policy statement was not published in parallel with the draft short-term letting register bill. So, when the Oireachtas Tourism Committee were scrutinising that bill earlier this year they were blind to the possible planning rules.

You really can’t talk about one without the other, which made the pre legislative scrutiny of the register challenging, to say the least.

So, what is in the draft planning rules, how will they work in practice and what impact, if any will they have on short-term letting and the wider housing crisis?

The first thing to understand is that the overwhelming majority of properties that are currently available for short-term letting on platforms like Airbnb are in breach of planning law.

This was clarified in an important An Bord Pleanála ruling in 2016 related to a Temple Bar apartment in Dublin. The Bord confirmed that where planning permission had been granted for standard homes, that meant for long term residential occupation. Flipping them into the short-term letting sector would require a change of use planning permission.

In 2019, responding to the large number of homes being bought up by commercial operators and turned into short term lets, Government introduced new planning rules. In Rent Pressure Zones change of use would not be granted. The idea was to get these homes back into the rental market to help ease the deepening housing and homeless crisis.

Despite efforts by Dublin City and Cork City councils to ensure compliance, planning enforcement proved ineffective.

In 2022 Government decided to establish the register, in part to enforce the planning rules and reverse the flow of long-term homes into the short-term letting sector.

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Last year when minister for housing James Browne extended Rent Pressure Zones state-wide, he introduced a new layer of complexity into the debate. Now, small family businesses offering short term lettings from their own properties, many of which are not suitable for the rental market, were caught up in the regulations.

To address this, the link to RPZs has been dropped. In its place Government has introduced a new twin track approach.

In cities and large towns with a population above 20,000 there will be a stricter planning regime, with a presumption to refuse change of use planning applications. Everywhere else local authorities will have greater flexibility to decide whether applications will be granted or not.

Not everyone engaging in short-term letting will need planning permission. If you let your own home out for 90 nights a year or less while away, or throughout the year while you remain in the property you will not need a change of use planning grant.

Everyone else will have to apply. The statement states that a simplified process will be available, which should not require detailed maps or drawings. However, the associated fees are not yet known.

In cities and towns with a population over 20,000 operators will have to demonstrate planning compliance to get on the register from December 1st. If they are not on the register they will not be permitted to trade.

Operators in smaller towns, villages and rural areas, will have two years to demonstrate planning compliance.

Grandfather clause

Controversially, if an operator has been trading continuously for seven years, up to December 1, they can avail of a grandfather clause, and in most cases will be granted permission.

The recently published Housing Agency-Indecon report on the short-term letting sector found that 70% of hosts on Airbnb have been in operation for seven years or more.

The 20,000-population threshold is too high and the two-year lead in for smaller areas very generous. However, the real problem with the planning rules is the grandfather clause.

If the Indecon figures are correct, then the majority of homes that have been flipped into short-term letting will get planning permission, even in larger cities and towns. This will make the regulations among the weakest in Europe.

These are the very homes, in areas with a high homelessness problem and shortage of rental supply, that Government claims they want back into long-term residential occupation.

So the latest attempt by Government to regulate short-term letting and bring long term homes back into use looks set to be as useless as its predecessor.