As we enter pre-Budget 2023 submission period, Dublin Chamber has spoken out about the impact the ongoing accommodation crisis, coupled with the rise in remote working, is having on the capital. The body is calling for the Government to prioritise investment in urban infrastructure and to look at tax measures, including an increase in the zoned land tax to ensure any unused land that is zoned and serviced for housing is either put to use immediately or taxed. While most understand that ready-to-go housing sites ought not to be left idle, there are still issues of planning reform and broader project viability that need to be addressed before this happens. Unfortunately, we have learned that policies introduced without full consideration of the wider consequences can backfire badly… Speaking of which, earlier this week, TheJournal.ie published an interesting ‘FactFind’ study into the treatment of Airbnb by other countries, exploring how they were regulated and the impact of those regulations. It will not surprise many to read the results of the research that found regulating or limiting use of the platform did not necessarily lead to more houses becoming available or to lower rents.
This research comes a week after Ireland announced even tighter regulations on short-term rentals, in a bid to stem current rental accommodation shortages. The latest regulations, which come into effect from September 1st, 2022, require short-term rentals to have planning permission secured prior to advertising on short-term let platforms like Airbnb, with non-compliant property owners being subject to fines. According to the report, there are 15,657 entire properties listed on Airbnb in Ireland compared to 851 properties listed for rent on Daft.ie, which obviously is not sustainable. But are we introducing regulations that will actually solve this problem?
Restrictions on short-term rentals have been imposed by many cities, including Paris, Amsterdam, New York, Barcelona and Miami. Similar to Ireland, all of these cities are experiencing a crisis across their rental markets and, like Ireland, they are all attractive destinations for visitors, which is compounding the problem.
Despite passing restrictions in 2011, there are now more entire homes on Airbnb than in the New York City rental market! After a toughening of measures, politicians forecast that close to 20,000 homes could be returned to the rental market, however, according to TheJournal.ie “there is little evidence that the rental market increased by that number when the law came into effect earlier this year”.
Looking at the Irish marketplace (with RPZs), the report concludes that housing availability, rent prices, time, and enforcement will determine just how successful these latest measures are.
Lotus Investment Group