Hounding holiday landlords won’t help the housing crisis

from The Southside News 07062023

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Michael Wolsey

WE all know the root cause of the housing crisis - too many people are chasing too few homes. It’s a simple problem but it does not have a simple solution, so we look for villains we can blame: the Government, vulture funds, the banks and, as the holiday season looms, people who rent their properties through Airbnb. They’ve been under fire before and, a couple of years back, the criticism prompted Housing Minister Darragh O’Brien to propose a legal curb on their activities. His idea was that people renting their homes for short terms would need ‘change of business’ planning permission .

The plan ran into problems from the outset and, as things stand, only applies in Rent Pressure Zones. It is not enforced and is widely ignored. I don’t like the idea of people ignoring a law because it doesn’t suit them. But in this case it makes no difference. Extending and strengthening the rule, which is Mr O’Brien’s declared intention, won’t change anything either. It may hurt our tourist trade by restricting accomodation at a time when hotel rooms are hard to find. But it won’t put any serious number of homes onto the housing market.

I have rented Airbnb properties eight or nine times over the past decade, in different parts of Ireland and in France and Spain. All but one - an apartment in Paris - were homes where the owners lived for at least part of the year and which they would not let on a longterm lease.

The owners of the house we recently rented in Galway spend their summers with friends in the Canaries. They also vacate their house at other holiday periods, often at Easter and sometimes at Christmas. They might rent it through Airbnb at other times if they get a good offer, but they expect to spend at least 30 weeks of the year in their home. They would not dream of leasing it for residential accommodation. If they could not rent it to tourists they would leave it empty or maybe, they thought, sell it and buy somewhere cheaper. Either way, nothing Mr O’Brien does will put this house on the residential rental market. The minister has modeled his plan on one introduced three years ago in the Portuguese capital, Lisbon, which he says has been a success.

“It has had an effect in making sure properties are let out for appropriate periods,” he told a Sunday newspaper..

I have no doubt he is right, for I have read several reports about the Lisbon scheme which make the same point. quantities only Limits apply. ^Free Gifts subject to availability while stocks last. **This product may not be right for you. Always read the label, warnings and directions for use, before purchase. Only use as directed. If symptoms persist consult your healthcare professional. Vitamin and Mineral supplements should not replace a balanced diet.

But Mr O’Brien did not claim that the scheme had resulted in any increase in residential renting in Lisbon and nor did any of the reports.

A study of the project, presented to the annual conference of Royal Economic Society in London, suggested that the main effect had been to reduce the number of properties for sale in tourist areas of Lisbon.

People were unwilling to spend on properties if they could not recoup some of the money by short-term letting;. Prices fell but so did demand; there has been no significant increase in accommodation available for residential renting and no reduction in the rents paid by tenants.

This does not bother the Lisbon authorities because they weren’t trying to increase residential renting when they imposed the restrictions. T hey feared the tourist areas of their city were being overwhelmed by visitors and wanted to stem the tide. Other cities, such as Paris and Barcelona, take the same view and are considering similar rules.

Do we want to curb tourism in Dublin? I don’t think so. It remains a very important industry. And there is certainly no case for a curb anywhere else in Ireland.

So Mr O’Brien should beware of unintended consequences. Hounding holiday landlords will do nothing to ease the housing problem but it could deal a serious blow to our tourist trade.