Mr. Richard Shakespeare:

I thank the Chairman and members of the committee for the invitation to attend today. I introduce my colleague, Dr. Dáithí Downey, head of housing policy in the housing department of Dublin City Council, DCC.

It is not clear what definition of "short-term lettings" the joint committee is using, or what impacts it wishes to consider. In preparing this response, I have assumed that the committee is primarily interested in lettings of less than six months' duration and that its primary concern is the potential adverse impact, if any, of developments in the short-term lettings market on the availability of more traditional lettings which could meet the longer term housing needs of households. Finally, I have presumed that the committee is interested in the question of whether there is a need for greater regulatory control of the short-term letting market.

It is important to state at the outset that short-term lettings are an important part of any properly functioning housing and rental market. The availability of these lettings fulfils a key role in meeting particular accommodation demand. There has always been a market for short-term lettings in Ireland and especially in the main urban centres. The short-term lettings market operates as an important secondary element in a properly functioning accommodation system. In Dublin, this market segment includes hotels and developments in which short-stay arrangements in self-contained residential accommodation are regularly available. Such accommodation is required to meet the demand for short-stay residential space in Dublin for personal, work, study, business and tourism reasons. It is important that Dublin's growing demand for such accommodation is met by a responsive, flexible and quality supply. Dublin city’s development plan for 2016 to 2021, therefore, includes policy objectives for the appropriate planning and development of short-stay accommodation in its various forms including new "apart-hotel" provision.

It is clear that the recent phenomenon of Internet-hosted data-centric technologies has disrupted the traditional business model for short-term lettings. This is part of the new collaborative economy with peer-to-peer platforms for the listing, discovery and booking of short-stay residential accommodation. This has created a new marketplace for an additional form of lodging or accommodation that includes options to use shared space in private residential accommodation, both rental and owner occupied, and also allows users to share and sell residential space of their own or to provide access to shared residential space. The global market leader in online platforms for sharing and selling space in private residential accommodation is Airbnb. It acts as an intermediary between consumers and producers to reduce the risk and cost of offering a home as a short-term letting, which enables suppliers, primarily home owners, to participate in the commercial market for short-term residential accommodation. Airbnb reduces transaction costs for both consumers and producers and provides a feedback and reputation mechanism that allows for a safer and more streamlined transaction.

Dublin City Council has undertaken some preliminary research on the extent of Airbnb activity in Dublin, which was presented to a meeting of the council’s housing strategic policy committee on 10 March 2017. A copy of that presentation has been circulated to the joint committee. The available data suggests that a total of 6,729 listings exist on Airbnb for all of Dublin, with 5,377 listings located within the Dublin City Council area. Of these, 50% are listings for "entire houses or apartments only". It has been suggested that the development of Airbnb and other similar platforms is having a serious adverse effect on the supply of properties available to meet the longer term housing needs of households. It is not clear that this is necessarily the case for the following reasons: First, Dublin City has 211,591 occupied housing units according to census 2016. They comprise 105,273 households in owner occupation - roughly 50% - and 62,865 households in private rental - 30% - with the balance being a combination of social, rental and other living arrangements. This compares with just 5,377 listings on Airbnb for rooms and-or entire apartments or houses in Dublin city. Second, it is likely that Airbnb and similar platforms have, at least to some extent, displaced more traditional approaches to managing short-term lettings.

Third, a particular strength of Airbnb and similar platforms is they facilitate short-term letting of vacant rooms in a very efficient manner. It is possible that prior to the availability of these platforms, property owners would not have considered renting spare rooms to the same extent. Airbnb also facilitates very short-term letting of entire apartments or houses while an owner is away on holidays, for example. This contributes to a more efficient housing market and has no adverse effect on the availability of properties to meet the longer term housing needs of households as in the absence of an Airbnb-type platform, the property would simply remain vacant until the owner returns. Short-term letting where the dwelling involved is the permanent or long-term residence of a person or family does not therefore reduce the number of residential units available in the economy. Home sharing or the letting of a room or rooms within a home can be an important source of income, helping home sharers to meet the cost of mortgages, rent or other household expenses. This can support their tenure security. It also supports tourism and associated economic activity, and even social and cultural exchange.

Despite the significant market efficiency gains associated with Airbnb and other sharing platforms in the use of otherwise under-utilised residential space and the ability it gives home owners to generate revenue, there are concerns about the economic and welfare effects of the operation of these platforms on the residential housing market. These can be broadly grouped into the following areas. These are impact on housing affordability in local rental and home ownership markets; the production of negative externalities or adverse impacts on local neighbourhoods associated with too high a concentration of short-term letting activity; and the emergence of a shadow lodging sector, where providers may evade compliance with established regulations and taxation.

Available evidence tends to suggest Airbnb activity has a high impact on the vacancy and occupancy rates in residential housing in particular neighbourhoods but a more marginal effect on prices. Airbnb has also allowed home owners in residential areas outside the city centre tourist areas to participate in the tourism accommodation market. This is an important feature of Airbnb activity in Dublin that has allowed for short-term lettings in suburban locations not immediately associated with tourism. The local effects of Airbnb and other platforms on house prices, rents, neighbourhood livability and economy, and the consequences for incumbent businesses and residents, are important empirical questions. Currently there is limited available evidence upon which decision makers and the public can rely. Dublin City Council is committed to undertaking further research into these matters in 2017 and we will work directly with Airbnb to undertake a survey on attitudes and opinions among service users in Dublin. We have also engaged consultants to undertake an economic analysis of the scope and scale of the collaborative economy accommodation market in Dublin.

Dublin City Council is a member of the recently established working group on short-term lettings, which is chaired by the Department of Housing, Planning and Local Government. This group aims to provide clarity on the appropriate regulatory approach from a planning perspective for short-term lettings to address unintended adverse consequences of these lettings. The group is expected to report in the third quarter of 2017.