The attraction of higher rates and the ease of avoiding laws associated with extended leases are leading to a rise in short-term tourist rentals of properties suited for long-term contracts. This trend is exacerbating the residential property scarcity. The government approximates that out of 30,000 temporary tourist lodgings available, around 12,000 should instead be on the long-term housing market. Through their ‘Housing for All’ plan, they’re aiming to restore these homes to the market.
The government’s chosen tool for this task is using the planning system to establish a register for temporary tourist rentals. Any proprietor providing a stay for 21 days or fewer will be obliged to sign up with Fáilte Ireland or face penalties up to €5,000. To register, landlords must demonstrate they have received planning permission for short-term rentals. If they haven’t, they must apply for permission for change of use or exit the short-term rental sphere to prevent being fined or facing prosecution under planning regulations. The government believes many will not be granted approval for change of use.
Although first announced in December 2022, the legislation governing the registration of short-term tourist rental lodgings is just now up for approval by the Cabinet. The delay is suggestive of opposition from the tourism sector, which came into public view this week when several organisations collectively wrote to the Taoiseach warning about the possible consequences of withdrawing a significant number of temporary lodgings. They estimate around 6,500 holiday rentals could vanish from the Wild Atlantic Way.
Assessing the genuine impact of these measures on both the tourism sector and the housing shortage is challenging. Similar tactics in European towns have productively increased long-term rental availability, yet the unexpected risk for the tourism industry, especially in non-urban areas, cannot be downplayed.
With elections looming by next March, the government might feel compelled to grant some concessions to the tourism sector. However, they must ensure they don’t dilute the initiative to the extent it loses any substantial impact.