Seanad debates

Thursday, 10 March 2022

Nithe i dtosach suíonna - Commencement Matters

Rental Sector

10:30 am

Photo of Joe O'ReillyJoe O'Reilly (Fine Gael)
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I welcome the Minister of State at the Department of Housing, Local Government and Heritage, Deputy Noonan.

Photo of Tim LombardTim Lombard (Fine Gael)
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The Minister of State is more than welcome to the Chamber. I want to ask the Minister for Housing, Local Government and Heritage, Deputy O'Brien, to make a statement on whether he has plans to regulate Airbnb properties to ensure the rental market is not grossly impacted by short-term lettings through Airbnb.

I have raised continuously the lack of realistic regulations on Airbnb. Airbnb plays a role in the marketplace that is distorting the rental market. This morning in Kinsale, a town close to my home, 60 properties are on Airbnb for rent, while three are on daft.ie. It is sucking the lifeblood out of the rental market. We brought in regulations in 2019 that did not address the issue. They stipulated that people could rent a property for 90 days; otherwise, they had to apply to the local authority. Nobody has done that. There has been no active engagement at local authority level to ensure the Airbnb market is regulated.

It is more financially lucrative for people with these properties to rent them out for two or three months per year, and leave them idle for the rest of the time, than to go into the rental market. The three aforementioned properties ondaft.ieinclude a house for €2,700 and an apartment for €1,600. There is no competition. The competition is in the Airbnb market and, because of that, people in towns like Kinsale can never rent. They are dealing with an unregulated entity. Until we regulate it, this cohort of society will be left with no place to live. We have spoken continuously about bringing forward regulations. Bord Fáilte has looked at this but has not brought anything forward. It is March, the Airbnb issue will explode in my part of the world in the next few weeks and we have no regulation brought forward.

I ask the Minister of State to comment on another issue brought to my attention during the week. We have brought forward under the Minister, Deputy Eamon Ryan, a €200 fuel rebate system for people who have an ESB bill. Every commercial Airbnb property is eligible to get that. That is sinful. They do not pay rates but now they get €200 off because they are considered private residents. They are not; they are commercial properties. Not alone are we not regulating them, we are giving them a freebie of €200 for the fun of it.There is a huge issue here. We cannot wait any more for regulation. We need regulation brought forward within the next few weeks or, unfortunately, the people I represent in Kinsale will never get an opportunity to rent a house because everything will be sucked up by Airbnb.

Photo of Malcolm NoonanMalcolm Noonan (Carlow-Kilkenny, Green Party)
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The figures the Senator gave are shocking. To have 60 properties in Kinsale is incredible. I will provide some background and come back to him on the supplementary question on the fuel rebate.

To provide some background, legislative reforms to regulate the short-term letting sector through the planning code in areas designated as rent pressure zones, RPZs, were introduced under the Planning and Development Act 2000 (Exempted Development) (No. 2) Regulations 2019 which came into effect on 1 July 2019. The aim of the legislation was to return much-needed accommodation being used for short-term letting purposes in designated RPZs to the long-term rental market, thereby increasing supply in the short-term rental market and helping to stabilise rents in those areas.

Under the short-term letting legislation, homesharing, that is, the letting of a room or rooms in a person's principal place of residence, is generally permissible on an unrestricted basis. However, where a person owns a property in a RPZ which is not his or her principal private residence and lets it for short-term letting purposes, he or she is required to apply for change of use planning permission unless the property already has a specific planning permission to be used for tourism or short-term letting purposes. Such change of use in planning permission is not guaranteed in areas of high housing demand.

Given that short-term letting accommodation is technically tourism-related accommodation, and the regulation of such accommodation is more appropriate to the tourism sector, the Government's Housing for All plan contains a specific action, action 20.4, to develop new regulatory controls requiring short-term and holiday lets to register with Fáilte Ireland with a view to ensuring that houses are used to best effect in areas of housing need. This will take the regulation of short-term letting accommodation out of the planning code.

The Department of Tourism, Culture, Arts, Gaeltacht, Sports and Media, and Fáilte Ireland have lead responsibility for developing and delivering the new legislation in this regard, with input from my Department given its involvement in framing the pre-existing short-term letting legislation. The Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, has engaged with the Minister for Tourism, Culture, Arts, Gaeltacht, Sports and Media to progress this action. A number of meetings have been held between officials of the Departments and Fáilte Ireland, and further engagement is expected to take place in the near future.

Funding was allocated in budget 2022 to Fáilte Ireland, which has been tasked with the design and implementation of the new short-term lettings registration system, which requires significant investment in supporting IT infrastructure. The agency is currently recruiting staff to work on this project. The Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media is also scoping out the legislative provisions that will be required to underpin the new registration system with a view to the necessary provisions being enacted in the current year and the new Fáilte Ireland short-term letting registration system being operational from January 2023.

As Senator Lombard has suggested, an underlying objective of the new registration system will be to ensure that an adequate level of private rental accommodation can be provided in towns like Kinsale, in particular in urban areas of high housing demand, and that such accommodation is not overly diverted to the short-term letting sector at the expense of local people seeking long-term rental accommodation. In effect, it is about achieving an appropriate mix of private rental accommodation and short-term letting accommodation, having regard to the housing needs in the area concerned.

Once again I thank the Senator for raising this important issue. I look forward to the introduction of the new legislative provisions in this regard and the positive impact that they will have for the long-term rental sector, in particular, as I have outlined, in those urban areas of high housing demand and need.

Photo of Tim LombardTim Lombard (Fine Gael)
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I thank the Minister of State for his comprehensive response. He said it will be 2023 before we have the regulations brought forward, which is disappointing for patrons in my part of the world. The blight of trying to get a house will continue for at least another 12 months at this rate. These regulations need to be brought forward immediately.

I ask that the Minister of State clarify whether Airbnb properties are now in a position to draw down the €200 rebate for energy costs. I think that is sinful. Not alone are they taking rental properties out of the market, we are now giving them an opportunity to have a €200 voucher for the two or three months during which they are doing business. I do not get the logic of that. The Minister of State might come back to me on that issue. In the short term, we have no hope for towns and villages with large numbers of Airbnb properties until the regulations are in place. People are doomed to wait on waiting lists because there is no hope for them.

Photo of Malcolm NoonanMalcolm Noonan (Carlow-Kilkenny, Green Party)
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On the €200 rebate, it is something I was not aware of and I will try to get clarification on that. As the Senator is aware, the rebate was introduced on a blanket scale to try to get money out to people as quickly as possible. I know it was criticised in that regard, but it was the most effective and quickest way to do that. We will find out about the specific issue of people with Airbnb properties. That is something we need to clarify.

I wholeheartedly agree with the Senator. We would love to bring this legislation forward more quickly, but it has to go through a process and it is critically important to get this right. The Senator is correct in saying that 60 properties in Kinsale is far too many to be in short-term letting and not available for letting on a longer-term basis. That has an impact on the vibrancy of the town centre, which is contrary to the Town Centre First policy. It is an issue for people working in Kinsale. It is an area of high tourism demand and a lot of people working in the services sector would love to be able to rent in the locality. In that regard, it is critically important that the legislation addresses that in as timely a manner as possible.

Photo of Eugene MurphyEugene Murphy (Fianna Fail)
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I thank the Minister of State for addressing that issue and Senator Lombard for raising it. I express my thanks to all Senators and Ministers of State, as well as the staff, including the ushers, for their co-operation.

Cuireadh an Seanad ar fionraí ar 11.17 a.m. agus cuireadh tús leis arís ar 12.02 p.m. Sitting suspended at 11.17 a.m. and resumed at 12.02 p.m.