In order to manage the STL sector sustainably, Government needs to regulate it; every property should be required, as a minimum, to be registered, to have planning permission and pay commercial rates like every other business, to ensure it has minimal negative impact on the provision of permanent housing and long term sustainability of local communities.
In order to manage the STL sector sustainably, Government needs to regulate it to ensure it has minimal negative impact on the provision of permanent housing; every property should be required, as a minimum, to be registered, to have planning permission and pay commercial rates, just like every other business.
We also need to avoid making this a ‘city’ versus ‘rural’ issue. It is patently untrue that cities suffer disproportionately, and bundling everything else in to ‘rural’ if it is outside a city or Rent Pressure Zone (RPZ) takes no account of the actual facts surrounding the sector and its impacts; coastal communities are demonstrably the areas impacted most. Fig 1 below shows the heat map of the geographic spread of whole house/apartments on the AirBnb platform.
We also need to knock on the head the tropes that its a) a small sector and b) is the purview of a few country women who are making a few extra euro for their holidays every year… this is patently false, and thankfully Eurostat have undertaken significant research work on understanding the numbers of bed-nights generated across the 4 main STL bookings platforms, AirBnB, Tripadvisor, Bookings.com or Expedia, its scale and value. https://ec.europa.eu/eurostat/en/web/products-eurostat-news/w/DDN-20230109-1
The figures below shows the number of bed-nights to NUTS2 (regional) level for Q2 in 2022.
As you can see for Q2 2022, the southern, western and northern areas, and predominantly coastal areas within those regions, generated ~981, 000 bed-nights against ~387,000 in the Eastern and Midlands region, which includes Dublin.
The chart below shows the total STL bed-nights generated through collaborative platforms, (e.g. AirBnb,) by country for the year 2022, again by Eurostat. https://ec.europa.eu/eurostat/en/web/products-eurostat-news/w/DDN-20230109-1
The total for Ireland is 5,305,793 bed-nights, the average price per night of which naturally varies according to time of year and location, but having looked through a lot of AirBnb listings the average nightly price that is acceptable in my opinion is €130 per night, equating to a sector that generates approximately €700M in revenue per annum.
STL is very big business and there should be no doubt about it. It also operates in a totally unregulated manner and is skewing the prices for properties in many coastal areas to the point where local communities are being priced out of housing.
Given that the scale of STLs outside of the large cities and RPZ can clearly be demonstrated, I don’t believe it is tenable for Government to exclude coastal locations from any regulation. There is little doubt as to the value of STLs to the local economy, but it is creating unsustainable communities that are busy for 3/4 months of the year and empty for the rest of it.
The clearest and simplest mechanism to regulate the industry is to first of all, accept that it is in fact an industry, operating on an industrial scale. Secondly, like any other industry it is only sustainable if it operates in balance with its wider environment. The easiest and most direct way of delivering this is through the local authority planning system, to ensure it is developed in a balanced way and complies with “the proper planning and sustainable development” of an area.It will allow a local authority to assess the appropriate numbers of properties that should operate in any location, which can change according to a given set of circumstances. It will also allow for appropriate health and safety, and fire standards to be applied to each property, the cost of which will have to be incurred and assessed, alongside the purchase costs, against the return on the investment. It will also level the playing field for the small indigineous bed and breakfasts, hotels, hostels and guesthouses that do have to incur all of these business costs.
It is also notable that these STL ‘businesses’ do not pay commercial rates, despite their successful operation being based on the local amenities and services, provided and funded from the public purse.
I suspect if all of these ‘business’ costs and regulations were being levied on each STL property the Return On Investment (ROI) wouldn’t be half as attractive, leaving many properties to be realistically priced back onto the permanent housing market, whether owner occupier, or long term rental. Governments job is to deliver that regulation. They do it across multiple other industrial sectors, this one should be no different.
Links below;
https://ec.europa.eu/eurostat/en/web/products-eurostat-news/w/DDN-20230109-1
https://airbtics.com/airbnb-regulations-in-ireland/
http://insideairbnb.com/ireland/
https://www.airdna.co/vacation-rental-data/app/ie/default/moyarta/overview
