Tuesday 16 July 2019

Colette Browne: 'Rents will go in only one direction - up - unless councils get resources they need to keep them down'

'This year, rents have continued to rocket. Yesterday, it was announced rents are up an average of 8.3pc nationally year-on-year.' (Stock photo)
'This year, rents have continued to rocket. Yesterday, it was announced rents are up an average of 8.3pc nationally year-on-year.' (Stock photo)
Colette Browne

Colette Browne

The scale of the rental cri sis was underscored yesterday when 19 new locations were designated rent pressure zones (RPZs) - meaning 65pc of rented accommodation across the country is now in an area with unsustainable increases.

Today, RPZs can be found in what were once very affordable and relatively rural areas, places like Midleton, Ardee, Trim and Gort.

Meanwhile in Dublin, which was designated an RPZ in 2016, the situation continues to deteriorate. At the end of last year rents were nearly 40pc higher than their previous Celtic Tiger peak, with people shelling out €520 more every month than those living in the same properties a decade ago.

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This year, rents have continued to rocket. Yesterday, it was announced rents are up an average of 8.3pc nationally year-on-year.

When then Housing Minister Simon Coveney first introduced RPZs in December 2016, limiting rental increases in those areas to 4pc per annum, it was supposed to be for three years.

Within that period the underlying problems causing spiralling rents, mostly related to the chronic under-supply of housing, were supposed to be addressed, which would have made RPZs defunct.

Instead, in April, the Government effectively admitted defeat. It announced it was extending the deadline, and RPZs will now be in place until December 2021.

If the Government has had little success in tackling rent increases to date, it is hopeful new regulations concerning short-term letting in RPZs, which came into force on Monday, will have some impact.

Under the new guidelines, those who wish to let a room in their home or their entire property for a period of no more than 90 days, will have to register with their local authority. Those who wish to use a non-principal residence for short-term lets, or let their home for more than 90 days, must apply for planning permission.

Given the huge increase in the numbers of properties that can be found on sites like Airbnb, these new regulations are a long overdue measure.

According to AirDNA, which tracks Airbnb metrics across the globe, there are 6,290 active rentals in Dublin. This comprises 3,728 entire properties which are available to rent and 2,588 private rooms in dwellings.

Of all the properties which can be rented on a short-term basis, the majority - 1,510 - are two-bed homes. There are also 1,349 one-bed, 455 three-bed, 208 studios, 161 four-bed and 45 properties with five or more rooms.

The situation becomes even more stark when Airbnb figures are collated with those from another short-term letting company, Home Away. In 2016, the number of active rentals in Dublin stood at 4,673. Three years later, in 2019, that figure had increased to 8,091.

By contrast, on May 1, there were just 2,700 entire properties available to rent nationwide - the lowest ever figure since Daft.ie started compiling its monthly reports back in 2006.

Given the explosion in the lucrative short-term letting market, in the midst of a housing and homelessness crisis, regulations attempting to constrain the use of residential properties for commercial use are a no-brainer.

But, enacting new laws is easy. Unless they are properly enforced, they are not worth the paper they're written on.

I contacted Dublin City Council (DCC) yesterday to see what kind of firepower it has been given in order to police these new regulations, which were announced by Housing Minister Eoghan Murphy back in October 2018. Some eight months later and DCC, where the housing and homelessness crisis is at its most desperate, has yet to take on a single additional staff member.

Having told the Department of Housing some months ago it would require €750,000 to properly enforce the new regulations, it has been left swinging by a Government that talks tough but never follows through.

A spokesman for the local authority said the department "had just recently sanctioned the additional resources requested" and "it would take a number of months to get the staff recruited and in place".

So, who will be tasked with the extraordinarily difficult job of trying to find those who are in breach of these regulations?

Currently, there are just eight planning enforcement officers who deal with every single complaint for the entire city. These new regulations were just added to their existing workload.

Is it in any wonder then that, as of yesterday, there had been zero applications for planning permission by those using non-principal properties for short-term lets.

This is despite the fact that, per AirDNA, there are nearly 4,000 of those properties available to rent across the city.

Why would people earning significant sums in the short-term market, where one Dublin property alone netted €230,000 in just one year, bother to apply for planning permission which is almost certainly going to be refused?

They would only do so if there was a real fear of being caught or if the penalties that were in place for breaches of the regulations were so draconian that the risk wasn't worth it.

For the record, the maximum penalty is €5,000 or six months in prison, but those found in breach for the first time are unlikely to face penalties of anything remotely like those figures.

Additionally, given those operating short-term lets will be prosecuted for carrying out an unauthorised development, an offence under section 151 of the Planning and Development Act 2000, any breach of the regulations will first prompt a warning letter.

Then a decision must be taken by the local authority about whether to issue an enforcement notice, which can take a further three months and which gives the recipient up to six months to mend their hand.

For those with multiple properties available on short-term letting sites, the council will face the arduous task of having to issue separate warning letters and enforcement notices in respect of each individual property - presuming it can even find all of them.

Enforcing these regulations would be extremely difficult even if local authorities were properly resourced. But, given the lack of planning and dearth of funding provided by the Government, it is an impossible task.

Speaking in the wake of 19 new areas being added to the list of RPZs yesterday, Mr Murphy said "rents are still too high and in some parts of the country are still rising ", but added he was hopeful the reform of the short-term letting market would increase supply and "help tackle rising rents".

Regrettably, unless these new regulations are accompanied by sufficient resources for the local authorities tasked with enforcing them, the only place rents are going is up for the foreseeable future.

Irish Independent

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