Last year, a week before Christmas 2019, the Sligo-Strandhill Local Election Area (LEA) became designated as a Rent Pressure Zone (RPZ). This means that rents in the area may not be increased by more than 4% per annum, and it also effectively bans AirBnB or other short-term leasing within the LEA.
This stubborn and backward approach to solving the rent crisis exposes the County Council's cowardly refusal to take meaningful action on the issue of rent in Sligo. The only effect of an AirBnB ban will be to curb tourism to Sligo, and imposing a rent-increase maximum as a response to a rent crisis is like handing out sandbags after a flood.
This is a problem of supply and demand. Right now, the demand is too high. The only good solution is to increase the supply by creating more housing. If private investment isn't accomplishing that, it's up to the Council to install incentives for housing creation, or to build new housing with government funds. It's as simple as that.
For whatever reason, governments typically do not want to build housing, presumably because it's a relatively invisible accomplishment, compared to, say, new roads and infrastructure projects that have a tangible, if negligible, benefit to a much higher percentage of the population.
Sligo has unquestionably fallen for this showy, near-useless infrastructure spending. In 2018, and 2017, Sligo County Council spent more than €18 million on road maintenance and improvement, and nothing on housing creation.
Certainly some of that road spending is necessary, but equally much of it is useless, rebuilding perfectly serviceable roads for the sake of having something to point at as an accomplishment.
Sligo is not in danger of becoming a Road Pressure Zone. We don't need granite footpaths on O'Connell Street or fancy bollards in front of the Cranmore Road government buildings.
What we need is meaningful action that will actually address the root of the housing problem.
If Sligo would reallocate half the road-maintenance budget for housing creation-€9 million-they could build 100-150 units per year. If they had been doing that instead of tearing up and rebuilding perfectly good roads for the past decade, there would be no housing crisis here.
Another facet of the new RPZ regulations is the nearly total ban of short-term rentals like AirBnB. This is a national law, but Sligo actively supports it. The planners denied change-of-use permission to the first AirBnB that requested it last year, stating as part of their reasoning that over 1,000 families are waiting for council housing.
This kind of short-term-rental ban has been shown to be entirely ineffective at reversing rental shortages. Berlin's ground-breaking AirBnB ban was reversed after just two years, because it hurt the tourism industry and did nothing for rental prices.
The reason AirBnB bans don't work is that there simply aren't enough AirBnBs to make a dent in the rental market. In Berlin, there were 20,000 AirBnBs, but to ease the housing crisis they needed more than 100,000 new units.
Here in Sligo, we can compare that figure from the council- 1,000 families waiting for housing-to the number of short-term-rentals in the entire Sligo-Strandhill LEA: 30.
So we can say without a doubt that the AirBnB ban will have no effect on rent. However, it will hurt tourism, the fastest growing industry in Ireland.
Sligo is a hidden gem of the West Coast. Currently, it's rarely a destination for tourists, but often a stopover between Donegal or the North and Galway or Kerry. The last thing we need is a disincentive for people, especially young people, to visit.
But this County Council prefers a show of action over real action, and so I'm sure they'll continue to enthusiastically enforce this backward ban. It's something they can point to as a step taken against the rent crisis-never mind about the actual supply and demand problem at the heart of the crisis.
The thing about a supply and demand problem is that it will sort itself out eventually. If the Council doesn't take steps to increase supply, then the market will take steps to reduce demand. More people will move away from Sligo, fewer people will move in, fewer tourists will visit, and fewer businesses will be created here.