Irish newspapers seem to agree that Airbnb is the scourge of Ireland’s residential rental market. It is deemed responsible for everything from gentrification to accelerated rent increases, to homelessness. But perhaps Airbnb is a symptom of our housing crisis and not its cause?
To Airbnb or not Airbnb?
Airbnb is the world’s biggest online property market place allowing people to rent out their properties or spare rooms to guests. It takes a commission of 3% from each host, and between 6% and 12% for each guest. In Ireland some 22,000 people stayed with Airbnb hosts for St Patrick’s Day this year. There are currently 6,104 active rentals on Airbnb for Dublin with an average daily rate of €136.
Inviting complete strangers into your home might not sound like a good idea to everyone. Conversely, neither is agreeing to be the guest of a stranger. However, with the price of hotel rooms soaring Airbnb allows visitors the comfort of a home while spreading the benefits of tourism to a wider range of people and areas.. Regardless of how much the phrase “I like to meet new people” is offered to sceptics in Dublin what it often boils down to is people renting out the spare room in order to pay extortionate rents or to have some disposable income left at the end of the month. ‘Home-sharing’ allows most users the flexibility to choose when they let their space short-term and to remain in their homes.
As with most human endeavours there will be a minority who abuse a mostly benign facility. Professional landlords were quick to realise the profits to be made renting out apartments full-time without any regulation, and without paying commercial-property or hotel taxes. Airbnb warns hosts that if they rent more than four bedrooms in a house, where each bedroom is used for the accommodation of not more than four persons as overnight guest accommodation, that they may require planning permission. Such lettings are apparently not in the spirit in which Airbnb was intended. Number-crunching clearly demonstrates that Airbnb is not used to any significant extent for subletting purposes, with the average host in Ireland earning on average just €3,500 in 2017. This is low when compared to the rent-a-room scheme where people can earn up to €12,000 (exempt from income tax) annually for renting a private room in their home. But this €3,500 per year (or €291.67 monthly) can make a difference. It is understandable that a budget-conscious tourist would choose Airbnb when the average Irish hotel room (not including breakfast) costs €129 which is predicted to increase to €150 by 2021. Many of those hyperventilating their criticisms of Airbnb see no problem suing the service when they travel abroad.
City of Hotels
This rapid increase in room rates has not gone unnoticed by the international hotel groups and investors. In 2018 more than a dozen hotels have either begun or completed construction adding 1,200 hotel rooms this year. Approximately 3,000 to 3,500 new hotel rooms will be built in Dublin city between now and the end of 2020.
Among the hotel projects on the way are:
1. Aloft Hotel by the Marriott Hotel Group which will provide a moderately priced 202-bedroom hotel in the Liberties.
2. Maldron Hotels which will has built a 140-bedroom hotel on Kevin Street, near St Stephens Green
3. The second of the three Maldron Hotels on the site of the former Charlemont Clinic in Grand Canal Dock will open this September with 180 bedrooms
4. The last of the Maldron trio will be the Iveagh Garden Hotel at 72-74 Harcourt Street with 152 bedrooms and a room only rate of€159-€299 per night.
5. The Press-Up Group will open the Devlin, a sister hotel to its Dean, Ranelagh over the summer with 41 bedrooms.
6. Dublin Airport will have a new 202-bedroom hotel on the site between Terminal 2 and the T2 multi storey short-term car park.
7. A 421 bedroom hotel is currently on site in Clonshaugh close to Dublin Airport
8. Tetrarch Capital will construct a 393-bedroom hotel close to Trinity College on a one-acre site bounded by Townsend Street, Moss Street and Gloucester Street South.
9. A new Hyatt Hotel to be located opposite St Patrick’s Cathedral with 234 bedrooms.
10. Bow Lane Hotel off Aungier Street with 300 rooms.
The long term hotel guests
Along with revenue the government has another reason for relying on hotels. They are paying our hotels vast sums of money to do their job – to provide homes for the most vulnerable. Last year Dublin City Council paid €46.93m to hotels, a 20.5% jump on the previous year. This does not include the €12.3m to hotels and B&BS.
On 12 June Paris will decide whether it will remove 84% of its Airbnb listing (43,000). This would mean that guests with bookings made after this date might not be able to contact their host. The city asserts that these unregistered homes are illegal. It already restricts homeowners to renting out their homes for no more than 120 days a year and renters must have a tax-registration number on their Airbnb listing. Airbnb paid out €1.37m in fines to Paris last year for listings that did not have a tax ID. Airbnb’s suspiciously diplomatic response to this threat was: “we encourage Paris to follow the path of other cities such as London, Berlin, and Barcelona, with whom we have worked efficiently on common-sense measures to promote responsible furnished tourist rentals”. Paris is not the first city to pull the plug on listings. In January 2018 more than 3,000 rentals in San Francisco, about 50 percent of the total available, were wiped, after new, similar regulations came into play.
There is hope for Parisian hosts as Berlin survived an Airbnb ‘ban’ enacted in April 2016 which was lifted on 1 May this year. There is now a strict new set of rules and even tougher penalties. People can rent out their own home as much as they want and a second home for up to 90 days a year. Landlords seeking to rent out their home will only be allowed to do so if they get a general permit from their borough, even if they intend only to rent their property out for occasional short stays. In New York Airbnb introduced a ‘one host, one home’ policy in 2016.
So what would happen if we followed Berlin’s kneejerk policy and Dublin banned Airbnb tomorrow?
Minister for Housing Eoghan Murphy has set up a working group under the Re-Building Ireland programme to examine the impact on the housing and rental market and it is mooted that a licensing system for short-term lets will be introduced.
It seems the government will do anything to avoid actually building houses. Perhaps this is because it one of the points of Fine Gael to be squeamish about social housing and indeed both subsidies and the public sector generally. The government continues to pursue band-aid solutions such as rent assistance, the purchase of ‘turnkey’ ie already-built housing, Bed and Breakfast accommodation for the homeless, co-living (private en suite bedroom but shared kitchen and living area), a reduction in planning standards for housing, fast-tracking of housing application, the removal of height restrictions on city-centre buildings. And now it is to curtail Airbnb.
Dublin City Council is concerned about not being able to accommodate tourists but what about her citizens? Visitors will step over many a rough sleeper to make their way to their shiny new hotel and witness a queue of people for food in front of the GPO and Aston Quay on certain evenings on the way to their superpub-hosting hotel in Temple Bar. If Eoghan Murphy put as much effort into actually building affordable homes and social housing as he does into spin and fluffing up the outrageously low new-build figures for social housing then there would be fewer vested-interest-driven false pretexts for certain sectors of society to use as a launch pad for their agendas. As a start the Minister should publish policy to miliutate against hotels and in favour of affordable housing, in city centres, across the State.