Oireachtas Joint and Select Committees

Wednesday, 28 June 2017

Joint Oireachtas Committee on Housing, Planning, Community and Local Government

Housing and Rental Market: Discussion (Resumed)

1:30 pm

Mr. John-Mark McCafferty:

I will respond and then Mr. Elliot might do a kind of sweeper. This is all about a dearth of evidence. It is important that we can we build up that evidence from statutory sources, from Airbnb, itself, or from other sources. Regarding the issue of displacement, rent increases used to be the main driver for people to come to Threshold for assistance and advice. Since the very welcome aspects of recent regulation with the rent pressure zones and rent certainty, the most common issue people bring to us is tenancy terminations. Why do we have so many tenancy terminations? That is the $64,000 question.

I believe the Deputy is asking how much of that has been caused by short-term lets. We do not have an answer for that, but we have certainly seen a ramping-up in tenancy terminations. Ostensibly the reasons given include refurbishing the property which is one of the grounds for avoiding the RPZ rules, or tenancies being terminated within the first six months. I suspect landlords are not getting the rents they would like because of the RPZs in certain parts of the State. While that is a factor, we would need further evidence to determine how much of that is being driven by short-term lets.

On the issue of people being driven further from the city centre, since the 1980s successive governments have let the market decide our housing policies. We have gilded the lily in terms of capital expenditure on social housing. We have not embraced a cost-rental or a mid-market rental as it is called in Scotland. Institutions to underpin that may be appropriate. We have mentioned other jurisdictions. Part of the challenge is that we have relatively weak local government and relatively weak municipal authorities. Cities such as Amsterdam have very strong municipal authorities to drive things such as affordable rent and mixed rent policies. Short-term lets are part of myriad processes.

On vacant homes, the one word which is politically very uncomfortable or unpopular is tax. The only reason that property tax is in situis that three international bodies came in and called the shots. We ended up getting something over the line using the Revenue Commissioners. I come from a jurisdiction where property taxes are actually very high and the average house incurs a tax of £2,000 or £3,000. People do not bat an eyelid because they know they have a social contract with their local authority.

We are in a very different space in Ireland. The use of tax measures to change behaviour with regard to vacant homes can be understated. The measure would not necessarily raise money. Rather, it is about changing behaviour so people will decide they do not want to be liable for a property and will put the vacant unit or house back into the market.

Some of the issues around probate are not about financial measures. Probate takes far too long. A small but significant number of units are lying idle because of probate and related matters.

Bolton was mentioned. There are strong municipal authorities in the UK. It is no doyenne, and I would rather look at mainland European jurisdictions to push some of these issues. Stronger local authorities are able to put resources into an empty homes, offices or other issues.

A good number of short-term lets are located in Dublin 1, 2, 7 and 8. There are other forces at play in Dublin 2, including many corporate players. My understanding is that certain corporate players allow their employees to visit houses for sale or rent at 8.30 a.m., but the rest of us have to view such properties at lunchtime or in the evenings. That is over and above the short-term lets.

Some Airbnb hosts may have become renters but never did. It is hard to prove that fact. In terms of planning, in multi-unit dwellings house rules are coming on stream. Many management companies now stipulate that units may not be used for short-term lets. Such measures are on the increase.

The Kenny report on vacant sites was published a very long time ago, and successive Dáileanna have baulked from using tax and legislation to change behaviour. In effect, private property should be used for the common good. This has not happened yesterday, today or since the advent of short-term lettings. I again underline the issue of supply - whether that is social housing or broader housing provision for home ownership, which is equally important - market rents and cost rental.

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