Using what we have, where we have it to create solutions to the housing crisis

What if we pivoted our taxation policy and nudged these property owners along a different pathway, not by penalising one type of behaviour, STLs, but by creating a greater reward for a different one, long term lets.

Published on December 15, 2021

“In light of the recent record lack of rental accommodation available nationally to ask the Minister for Finance to look at a tax policy solution that will encourage behavioral change in property owners to switch from short term lets to long term rental”.

Along with a number of colleagues, I brought the above joint motion to our December Clare County Council meeting. The impetus really is seeing many local community members struggling to get access to rental accommodation in a place, Kilkee, with a vacancy rate of 72% according to the 2016 census. I know from speaking with my colleagues in the council, and from speaking with friends, it is similar picture around much of the west of Ireland.

I checked[1] on the evening of Sunday 12th December, there were 1,830 properties available to rent across Ireland… Here in Clare, there were 4 available in Ennis and surrounds, 1 in Lahinch, none in Ennistymon or Lisdoonvarna, 2 in Kilrush and surrounds, none in Kilkee, 3 in Killaloe, and 6 in Shannon and its surrounds.

In total, we had 15 properties available to rent on Daft in the whole of County Clare.

On the other hand, using info from a project called Inside Airbnb, that analyses publicly available information to provide data that quantifies the impact of short term lets on housing and residential communities, we see that across the whole country there are 15,851 entire houses or apartments available for short term let on Airnbnb[2]… 6,420 of these operated by hosts with multiple listings, these are not the privately owned holiday home rented out for the off season to cover the costs of the building or to create a few extra quid for the owner… hosts with multiple properties are operating them as businesses. The details provided are quite granular, down to LEA scale, I won’t go through all in Clare but the two in West Clare are quite stark when put into context with the 15 properties available in the whole of Clare.

  • In the Ennistymon LEA there are 496 entire houses/apartments available for STL, 211 operated by hosts with multiple listings.
  • In the Kilrush LEA there are 199 available for STL, 46 operated by hosts with multiple listings.
  • So in West Clare alone there are nearly 260 properties available for STL operated by hosts with multiple listings, out of the 366 in the whole county.

We are being told day in day out that we have a housing crisis… and yes, we do, every one of us councillors hear about and see the issues every day. I personally know a number of families in West Clare that cannot find any rental accommodation, families with one or both parents working, they are not on our social housing list and I only mention that to bring attention to the lack of support for these middle-income earners. They all have young families and they are critical to the sustainability of our schools, sports clubs, small local businesses and communities.

We have many, many people who cannot access housing, but we also have many, many people who have multiple properties and are making decisions about how they rent them out based on short term lets delivering the optimal return, their financial behaviour is reflected by this fact. And that is perfectly fine, although in a more perfect world we would have all our citizens housed before it was acceptable to own more than one property. But that is an argument for another day.

But what if we pivoted our taxation policy and nudged these property owners along a different pathway, not by penalising one type of behaviour, STLs, but by creating a greater reward for a different one, long term lets. One example is the rent a room relief, someone can earn €14,000 if they rent a spare room in their house out on a long term basis… I’d imagine something similar for long term rentals would certainly alter the minds of those owners with multiple properties as to what type of tenancy they desire.

And to highlight three last points:

  1. Firstly, of course I realise this would need to be conditional, maybe it can be time bound, and/or condition the upgrading of the BER ratings of these properties, maybe it could include vacant over the shop accommodation to make this a more attractive proposition for the property owner
  2. Before anyone raises the point about this being another government incentive for landlords, I would point out these landlords are already maximising the profit from their property, this suggestion would simply switch the tenancy from short term holiday makers to long term residents.
  3. And lastly for those who question what the consequence are for tourism in the towns and villages, and indeed cities, where these properties are located, long term permanent tenants mean these properties would be occupied for 12 months rather than vacant for 6/7.

Of course I know this isn’t an oven ready solution, much thought would need to go into its development, nor is it the only solution, but the housing crisis will not be solved any time soon by building our way out of it…so we need to look at other creative solutions that are more readily available in the short term. A behavioural nudge in this space could deliver a significant boost to the number of rental properties available to those who are in need of housing now.



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