Mr. Earnán Ó Cléirigh:

I thank the Chairman and the members of the committee for the invitation to attend today to discuss the impact of short-term letting on the residential rental sector. Accompanying me are Mr. Eamonn Kelly, senior adviser in the forward planning unit; Ms Niamh Drew, assistant principal officer in the planning policy unit; and Mr. Andrew Harkin from the rental market and approved housing bodies, AHB, regulation unit in the Department. Mr. Neil Maher, who was mentioned by the Chairman, is unable to attend today.

The strategy for the rental sector recognises the potential issue of significant numbers of properties being withdrawn from the long-term rental market, particularly in Dublin, for use as short-term tourism-related lettings and the negative impact of this on the supply and availability of residential rental accommodation. The growing use of online platforms, such as Airbnb, may, if not adequately regulated, facilitate and encourage this trend. The Department recognises that home sharing, which involves people providing overnight and short-term accommodation in their own homes, can be an important source of income helping home sharers to meet the costs of mortgages, rents or other household expenses and hence support tenure security. It also supports tourism and associated economic activity and even social and cultural exchange. Home sharing where the dwelling involved is the permanent or long-term residence of a person or family does not reduce the number of residential units available in the housing system and the economy. For this reason, planning regulations have traditionally recognised that home sharing and overnight guest accommodation is permissible in certain circumstances in houses but not apartments without a need to obtain planning permission.

That said, however, the Department is concerned that the growing availability and use of online short-term letting platforms and the potential commercial opportunities they provide may encourage landlords who normally provide residential rental accommodation to tenants to seek to obtain higher returns by ceasing residential letting and moving to short-term letting to tourist and business traveller customers. It may also encourage new investors to purchase residential units for short-term letting as an investment option, thereby reducing the number of residential units in the housing system. Both of these scenarios involve residential properties being lost to the residential housing system, meaning that less long term and secure accommodation will be available to the growing numbers of families and people who need it. The social and economic impacts of difficulties in accessing accommodation are significant and will not be compensated for by other economic benefits of the shift of residential units into short-term letting.

The Department is also concerned that the ability to use online platforms may facilitate or promote the use of housing units in multi-unit residential developments, such as apartments, for bed-and-breakfast accommodation contrary to the provisions of the Planning Acts and create planning enforcement difficulties for planning authorities. Generally, under the planning code, all development, including a material change of use, requires planning permission unless exempted under the Act or associated regulations. However, there is a specific exemption in Article 10(4) of the regulations which provides that within certain limitations or restrictions, development consisting of the use of a house for overnight guest accommodation is exempted development and, therefore, does not require planning permission. Apartments, however, do not benefit from this exemption.

Where there is a question as to what in any given case is or is not development, or is or is not exempted development, anybody can request a declaration under section 5 of the Act from the relevant planning authority, or from An Bord Pleanála on referral. When considering such a section 5 referral in a particular case last year, An Bord Pleanála determined that planning permission is required for the exclusive use of a residential apartment for short-term holiday lettings. The implications of this case raised a number of other regulatory and related issues, such as consumer protection, tax liability, residential tenancy regulation, support for tourism, and planning. Subsequent to that decision, the Department issued a circular on 22 December 2016 to bring this determination to the attention of planning authorities to ensure they were aware of the grounds on which the board reached its decision; the planning implications in terms of the requirement for such commercial use of residential units to be the subject of an application for planning permission; and the importance of a proactive approach to planning enforcement generally in this regard. The circular stated that planning authorities should take appropriate enforcement action under the planning code where it is brought to their attention that a particular property may be being used exclusively for short-term letting.

In order to address the unintended consequences of short-term lettings, particularly the withdrawal of supply from the residential rental market, the rental strategy committed to the establishment of a working group comprising representatives of relevant Departments, public bodies and wider interests in this area to provide full clarity on the appropriate regulation for management of short-term tourism related lettings, given the desired overall housing and rental policy objectives. The first meeting of the working group took place last Wednesday, 14 June. On foot of that meeting, it was agreed that the group will gather the available data to assess the scale of the issue; consider the approaches used in other jurisdictions; identify the areas in the country most at risk of negative impacts of short-term letting; and develop a clear policy approach based on housing priorities as outlined by the Government. On that basis, a circular will be prepared for issue in the near future to provide guidance to planning authorities on how to ensure that residential rental supply is protected in areas where demand is high when considering planning applications for short-term lets. The objective will be to limit the exclusive use of residential units for short-term letting, while facilitating those who are letting rooms in their own homes to do so, taking into account the specific issues associated with short-term letting in apartments and other issues such as standards and consumer protection. The group will also assess whether further guidance or changes to the regulation are required.

In addition to establishing a working group to consider short-term lettings, the Department has been engaging with Airbnb over the last months with a view agreeing a memorandum of understanding, MoU. While Airbnb is the most well-known and fastest growing operator in the sector, there are a number of other companies operating similar business models, such as Abode, Staycity, theKeyCollection and others. In discussions with the Department, Airbnb has expressed its concern at the potential loss of supply to the residential rental sector and has shown a willingness to work with the Department to develop a collaborative agreement. Discussions in this context are ongoing and, if successfully concluded, are intended to form the basis for putting similar arrangements in place with other online platforms. The Department’s joint commitment with Airbnb is to co-develop protocols and processes that encourage and facilitate home sharing while preventing unwelcome and unauthorised commercial rentals being advertised on the Airbnb platform. However, any MoU that may be agreed shall be in addition to requirements under the planning code. In this regard, it will not remove the obligation to obtain planning permission, as required, nor will it prohibit the reliance on an existing planning exemption, as appropriate, or the ability to seek clarification from the relevant planning authority as to whether planning permission is required.

I have tried to give an overview of the complex area that is short-term lettings and the Department's approach to it, and provide the committee with an update on developments, considerations and progress to date. I understand that Dublin City Council has some more quantitative information that will be useful for our discussion. My colleagues and I will be happy to take any questions.