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Minister for Housing Darragh O’Brien has told RTÉ’s Prime Time he is confident that a Government bill aimed at curbing short-term letting will be passed before the Oireachtas summer recess, despite concerns expressed by the European Commission saying it is “incompatible” with EU law.
In a letter issued to Government in February, the European Commission said parts of the 2022 draft of the Short-Term Tourist Letting Bill contravene EU laws protecting the freedom to provide online services across the European Single Market.
It further stated that our existing regulations – which underpin the new bill – requiring property owners to have planning permission for short-term letting above 90 days in Rent Pressure Zones “will require further analysis.”
The Commission refers to the bill as going “in the right direction” rather than something about which it has reached agreement with the Government.
The new bill must align with a new EU Short Term Rental Regulation. It is aimed at curtailing the use of residential properties for short-term letting, often done through websites like Airbnb and Booking.com.
Government estimates say that 10,700 properties of the roughly 31,000 listed for short-term letting could return to the long-term rental market if the bill becomes law.
“I had two very substantial engagements with the with the Commission over the last number of months,” Minister O’Brien told Prime Time in an interview when asked about the bill.
“What the EU want to ensure is that there was a consistency of approach across the EU member states… They assess what we put forward. They raise queries, we answer those queries, my understanding [is] those queries have been answered satisfactory,” he added.
The Department of Tourism, which shares responsibility for the issue with the Department of Housing, said in a statement to Prime Time that it is “continuing to engage with the EU Commission” and that the bill “is being revised by the Department.” It said that such work will conclude “in the coming months.”
Minister O’Brien said: “I am still expecting that if we can get if we get cooperation from the opposition… that we can have this legislation passed by the summer recess.”
But industry sources in short-term letting told Prime Time they believe it would be 2026 before the law is fully operational.
Urban and Rural Issue
Plans to introduce legislation to curb short-term letting were first announced almost six years ago.
It is widely acknowledged that short-term lets are impacting the rental markets, particularly in cities.
But it is not just in cities, where the homeless numbers are highest, but today in Ireland in many rural towns short-term let properties are shrinking the rental market.
In the coastal town of Kilkee in west Clare, local people who spoke with Prime Time said they have a housing crisis created by short-term letting.
Skyla-Louise Garder and fiancé Kallum said they have been responding to ads for rented properties in the town for the last six months.
“We either don’t get a reply or they’ll just tell us that it’s short-term let only,” Skyla-Louise said.
She is about to have her third child, so the family have outgrown their two-bed apartment. She says the family have no choice of housing, yet Kallum’s job in the Kilkee Fire Brigade is vital to the year-round community in Kilkee.
“He has to stay within a certain radius of the town. So, we can’t even [move] to the outskirts of Kilkee.”
Local Fianna Fail Councillor Cillian Murphy says while Kilkee has always been a town of holiday homes – many were constructed under tax incentives – there was always a smaller core of housing stock for local people. The rise of short-term letting has changed that in recent years.
“The 30% of housing that was always permanent occupancy here is under threat. The short-term rental market has created an animal that is actually just hollowing out our communities,” he said.
“We’ve started to see houses within our council housing estates that were owned by people who are living here permanently being sold and flipped out into the short-term rental market,” Cllr Murphy added.
These houses remain empty for most of the year and are lost to those seeking a place to live.
Local Architect Diarmuid Keane who grew up in Kilkee and returned to it to open an office, says he wants to expand his business but can’t.
“For people like ourselves that are looking to bring in staff for 52 weeks a year, it’s impossible to find accommodation for them,” he said.
As a result, he says he was forced to open an office in Limerick instead.
Nicola Troy, also from Kilkee, says she feels like she is being forced out of the town.
She has a hybrid working arrangement where she can work part of the week in Kilkee but cannot find a rental property and her daughter.
“The option to relocate is something I don’t want to do, but also with having a young child with our family in the area… I couldn’t foresee leaving the area.”
“I know the bread and butter of Kilkee is the tourist trade, and it’s great, and we’re lucky to have it. I think there has to be something set aside for the locals to be looked after and to have the option to stay in the town if they want to.”
Councillor Murphy says the need for regulation is urgent.
“Why would you look at a house and say, ‘well, I can long-term rental it, with all of the compliance issues that come with that, or I can short-term let it and I don’t have to deal with anything.’ The lack of regulation completely and utterly skews the playing field.”
He says that it is not clear that the planned legislation will even help Kilkee and other coastal towns, even though in his view they are “de facto Rent Pressure Zones.”
Existing Regulations only restrict short-term letting in defined Rent Pressure Zones (RPZs).
Nearby Ennis, became a RPZ last year, due to the high demand and rising rent prices. It also has increasing numbers of short-term lets.
Diarmuid McMahon of Ennis Chamber of Commerce said that instead of restricting short-lets other landlords should be better incentivised.
“Landlords are leaving the market, they’re not staying in the market,” he said, “are you going to compound that problem by removing the short-term let option as well?”
In Ennis, even businesses based on tourism have been impacted by rental and housing shortages. Recently The Old Ground Hotel in Ennis bought three houses for their staff to rent, as they couldn’t recruit otherwise. Other hotels in Co Clare are doing the same.
According to Diarmuid McMahon, the Government needs to tread carefully with new legislation, and not damage tourism to the town.
“If there are going to be inhibitors put on short-term lets, they would need look at that in terms of making sure that local businesses on the west coast of Ireland are supported, because if tourists can’t get the accommodation, then they won’t come,” he said.
The Government has acknowledged that existing regulations which require properties used for short term lets to have planning permission have not worked. Their own figures show that in the four and half years since they were introduced only 100 planning permissions have been issued.
This means that over 99% of all short-term lets are either unauthorised or exempt from regulation.
Speaking on Prime Time, Minister O’Brien acknowledged that the current situation – whereby a large number of short-term lets are available but comparably few long-term lets – was “unsustainable”.
It is “not good for housing supply,” he added.
But Ennis Chamber of Commerce’s Diarmuid McMahon says that rather than curbing short-term lets, they should incentivise other landlords.
“Landlords are leaving the market, they’re not staying in the market. And the question has to be asked, why? Are you going to compound that problem by removing the short term let option as well?”
“The real problem is one of housing supply,” he added.
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