Monday 23 September 2019

Home truths: Home-owning Ireland kicked in the Airbnbs

Airbnb, along with rent-a-room, have been the most important means by which hard-pressed home-owning middle Ireland can cover costs and survive
Airbnb, along with rent-a-room, have been the most important means by which hard-pressed home-owning middle Ireland can cover costs and survive
Mark Keenan

Mark Keenan

In times past, when despicable scandals like the recently-highlighted great tracker robbery were exposed by media, those responsible resigned, governments stepped down, plugs were pulled. Careers of incompetents were ended. Not any more, it seems.

Home-owning middle Ireland isn't a happy bunny right now. Recent events have shown that the middle is not only struggling as it has been since the crash, but that many have been robbed by their banks and are now being mocked by the State supposedly bound to protect them.

The multitudes who had money stolen from them by the banks as a result of the tracker mortgage scandal have been told to take a hike by the Central Bank of Ireland, the sham protector of the public interest and enforcer of governance law in financial services. Their Central Bank has once again let them down telling tracker mortgage holders who have been robbed to get themselves down to the financial ombudsman for redress. They've been told to get stuffed, to go an eat cake. That having money stolen from them by their bank is akin to getting professional service that is a tad shoddy.

Middle home-owning Ireland then saw its elected Government speaking disapprovingly about the mass theft which has gone on, and about the failure of the banks to repay the money, but otherwise watched it stand idly by.

For middle home-owning Ireland, it's all a bit like the cops coming around after the break-in and then beating up the burgled.

Of course, as tax payers, they have already bailed out the banks. Mortgage-paying middle Ireland realises that its children will be paying for those mistakes for decades to come. The children they are trying to raise have been robbed too.

The tracker scandal proves above all that we have been thrust back into the era of GUBU. For those who don't remember, that's Grotesque, Unbelievable, Bizarre, Unprecedented.

Those middle-aged tracker holders with 10 or 15 years left to go on their home payments will remember GUBU first time out.

We have seen the unbelievable and unprecedented spectacle of the chairman of our own Government's Finance Committee calling on the ECB to come back to Ireland and take over dealing with this issue - because our Government and Central Bank cannot be trusted to do it.

While we worry about first-time buyers and the growing numbers of homeless, we sometimes forget that those who bought homes in the Celtic Tiger years ago are among those suffering most from the most wearing financial problems.

Even if these mortgage holders haven't been robbed blind by their bank, they are likely to be struggling. Age wise, those hit by the tracker scandal are generally an older group who paid most for their homes in the Tiger years, and are therefore the most likely to be in negative equity.

By age they are also the most likely to have costs associated with college-going kids, most likely to be of an age to have been downsized in their employment since the crash at a time when companies are still cutting costs to the quick, or most likely to have been let go entirely in a time when technology is putting multitudes out of work in retail and in financial services in particular.

Home-owning middle Ireland is the group which is most likely to be earning the same or less in money terms (never mind real terms) as they did 10 years ago. Less again if they took post-crash pay cuts which were never clawed back.

At the same time the cost of living - for petrol, education for their children, healthcare and so forth - has consistently been rising.

So what does middle-aged middle home-owning Ireland do when faced with being bumped off the middle-class rung of the ladder? It does what it always did - it uses the house to hang on.

This is the group that will most likely take in lodgers, paying students and other types of paying guests .

For middle-aged mortgage-holding couples with teenage children, there have been two great saviours - the rent-a-room scheme, which allows those who let out a room in their home to earn €14,000 tax-free each year. That, and Airbnb - the online service which attracts tourists willing to hire rooms from local families.

In latter years, income from rent-a-room or from Airbnb has sometimes been all that stands between a mortgage-holding middle-aged couple with kids - and repossession.

Sometimes those options have been the difference between having money to fund a third-level education for offspring or not, or even the difference between eating properly or not.

Rent-a-room and Airbnb between them have been vital in assisting battered home-owning middle Ireland in clinging desperately on to that middle rung.

Airbnb has proven particularly helpful in more isolated rural areas where demand for full-time rental is low but newly Airbnb enabled tourism is viable. Although there are enthusiasts for it, inviting strangers in cheek by jowl to share your home with you isn't something you do out of choice, unless you really need the money.

But now it looks like middle mortgage holders are set for yet another kicking from Government as evidenced by recent guidelines issued by the Department of Housing. These suggest that Airbnb usage will require planning permission for certain types of short lets. This is being done on the basis that Airbnb is hoovering up lets which would ordinarily be taken by long-term tenants.

But where is the evidence? Airbnb, an organisation not known for its social sensitivities, has accused the Irish state of moving to disenfranchise ordinary home holders of a great earning empowerment to help them in their lives.

Airbnb is right. Once again middle home-owning Ireland has been kicked where it hurts.

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