Short-term Lettings Bill 2018 – Speech on behalf of Government in Seanad Éireann

Private Members’ Bill

Seanad Éireann

Short-term Lettings Bill 2018

Wednesday 20^th June 2018

Check Against Delivery

Introduction

Firstly, I wish to thank Senator Humphries for bringing forward this Bill and providing us with another opportunity to discuss short-term lettings which is a priority for this Government.

 

Policy

Can I set out from the start that, “Home sharing” that is to say, people providing overnight and short-term accommodation in their own homes – is a good thing. It can be an important source of income, helping “home sharers” to meet the cost of mortgages, rents and other household expenses and hence support tenure security.  It also supports tourism and associated economic activity and even social and cultural exchange.

This does not reduce the number of residential units available in the economy.

Importantly, planning regulations have traditionally recognised that home sharing and overnight guest accommodation is permissible in certain circumstances in houses, but not apartments, without the need to obtain planning permission.

However, the Government is concerned about the growing availability and use of online short-term letting platforms, and the potential commercial opportunities they provide, may lead landlords, who normally provide residential rental accommodation, to move into short term letting to tourist and business traveller customers because of the higher returns available from this activity.

Similarly people may well purchase or rent properties specifically for short term letting as an investment option, taking them out of residential market.

Short term letting under either of these scenarios, will lead to a direct loss of units in the rental sector and by extension, the broader housing system.  This means less longer-term and secure accommodation being available to the increasing numbers of families and people who need to access it.

Of course there is the potential for positive impacts as well, such as increased economic activity and tourism revenue.  With the housing system  under severe pressure the positive impacts are outweighed by the negative ones.

The social and economic impacts faced by families experiencing difficulties in accessing accommodation are significant and will not be compensated by the broader economic benefits a shift of residential units into short term letting could bring.

Equally, increased tourism revenues or footfall in urban restaurants, shops and local businesses will do nothing to compensate the frontline worker who has to move from the city to the periphery of the commuter belt with all the associated burden that brings with increased travel time and costs and dislocation in terms of schools and social networks.

At the same time we do not want to deny people the opportunity that short term letting – in the traditional B&B manner or via online platforms provide – that allow people to let out rooms in their homes as a means of earning some extra income.  This type of activity could actually help the frontline worker pay their rent or mortgage – and keep them in their home.  It is important to emphasise that we do not want to close that down.

That said, I understand and appreciate the motivation and bona fides behind this Private Members Bill.

To specifically address your proposals, I will take the opportunity to set out the Government’s position on each proposal.

Section 2 proposes to introduce a definition of short term lettings.

At present, there is no legal definition of short-term letting.  The Property Services (Regulation) Act 2011 uses a figure of 8 consecutive weeks but this does not take into consideration the cumulative effect across an entire season or year.

To accept the definition in the Bill would pre-empt the findings of the working group established under the Strategy for the Rental Sector not to mention any possible issues that may arise during discussions with the Office of Parliamentary Counsel.

Section 3 states that, under the planning code, where a dwelling is used for short-term lettings for more than an aggregate of 6 weeks per year then its use shall be classed as commercial rather than residential.

Under the planning code, all development, including a material change of use, requires planning permission unless exempted under the Act or the associated Regulations.  For example, there is an exemption which facilitates the use of a house for overnight guest accommodation in certain circumstances, which is traditionally relied on in the context of the provision of B&B-type accommodation.

The Bill proposes that, for the purposes of the planning code, short-term letting for periods exceeding 6 weeks in a year is a commercial use not a residential one.  It is understood the intention of this provision is to require property owners to obtain planning permission for a material change of use.

However, this is already generally the case under current planning requirements, and was addressed in a circular to planning authorities in October 2017, which sets out the existing planning requirements in relation to the short-term letting of houses and apartments.

Section 4 proposes removing the exemption under Section 3(1)(l) of the Property Services (Regulation) Act 2011 that disapplies the Act to short-term lettings.

The 2011 Act provided for, inter alia, the establishment of the Property Services Regulatory Authority – which regulates property service providers, i.e. estate agents, letting agents and property management agents.

The Act provides that the Act does not apply to –

“(l) a property service consisting solely of a short-term letting to a person where such letting—

(i) does not exceed or is unlikely to exceed 8 consecutive weeks, and

(ii) is for bona fide tourism or other leisure purposes,”

This exemption provision was intended to allow owners of holiday houses, cottages, etc. to let them directly to tourists without requiring them to use estate or letting agents with all the costs and inconvenience that involves.

The 2011 Act was designed to regulate the genuine property services sector, not the tourism sector and was quite deliberate that genuine tourism lets were incorporated in the list of exemptions provided for.

Amending the Property Services (Regulation) Act, as proposed in this Private Members’ Bill, would significantly change the manner in which the 2011 Act operates, and would potentially place a very significant additional burden on the Property Services Regulatory Authority (which would require significant resourcing) and may very well lead to unforeseen consequences.

The Government also has genuine concerns for small operators in the short-term tourist letting sector, many of whom will almost certainly fail to satisfy qualification and other licensing requirements, if this exemption is removed. This would then mean that such small operators (e.g. owners of tourist cottages, etc.) could not legally directly let their properties on a short-term basis and would instead, have to engage a licensed property service provider to conduct such lettings, with the consequent incurring of expenses and administrative complications.

Section 5 of the Bill proposes to place the obligation on short-term letting service providers to provide specified information to planning authorities.  It also proposes to require planning authorities to request, collect and collate such data and share this information with the Revenue Commissioners on request.

The purpose of the planning system aims to facilitate and support proper planning and sustainable development in a balanced manner, ensuring that the right development takes place in the right locations at the right time.  However, it is not the function of the planning code, nor is it the appropriate vehicle, to provide a wider regulatory framework for the short-term tourism-related letting sector or related tax requirements.

 

Government Efforts

The Strategy for the Rental Sector, recognised the potential issue of significant numbers of properties being withdrawn from the long term rental market for use as short term tourism-related lettings.

The negative impact this would have for the supply and availability of residential rental accommodation and that the growing use of online platforms, such as AirBnB, could, if not adequately regulated, facilitate and encourage this trend.

That is why we established a Working Group, made up of representatives from my Department, the Departments of Finance and of Business, Enterprise & Innovation, An Bord Pleanála, Fáilte Ireland, the Residential Tenancies Board, and Dublin City Council, to develop proposals for the appropriate regulation for management of short term tourism related lettings taking into account the Government’s overall housing and rental policy objectives.

The working group has submitted its report to the Department and Minister Murphy is currently considering same.

 

Proposed Regulation

The primary goals of the regulatory proposals are to:

• Reduce the market impacts of short-term rentals on the long-term residential rental market;
• Facilitate the use by resident householders of unused capacity in their homes for short term letting and the associated economic benefits for them and the local economy;
• Ensure the quality of accommodation services provided, consumer protection and safety; and,
• Limit and mitigate the costs associated with high volumes of short-term lettings borne by residential communities.

 

What is currently envisaged is a licensing system for both intermediaries – such as websites and management companies – and persons renting out both single rooms and entire properties as a short term lets.

The precise details regarding inspection, monitoring, enforcement limit setting, fees as well as consideration of local factors have still to be finalised.

However, it is clear that different approaches will be needed for those wishing to let properties on an ongoing commercial basis and those wishing to let a room in their home or to let their home while away for a short period, perhaps on holiday.

The regulatory approach also intends to recognise the huge difference across different areas of the country.  In some places increases in short term letting poses a risk to the rental stock, while in others it could provide an important opportunity for landlords to make profitable use of properties that they have difficulty letting.

 

Conclusion

To conclude, I would like to thank Senator Humphries for introducing this Bill and the sentiment which it contains, which is and will continue to be extremely helpful as we move forward with the design and establishment of an appropriate regulatory framework to both protect our housing and rental supply and also take advantage of the benefits that this new and growing economy provides.

 

ENDS

Seanad Statements on Marine Spatial Planning – 12 June 2018 – Opening Statement by Minister Damien English

CHECK AGAINST DELIVERY

 

Cathaoirleach,

I am very pleased to be here today to provide an update on Marine Spatial Planning or MSP on behalf of the Government and my Department, following on from Senator O’Sullivan’s Motion last month on marine environment matters.

All contributors to that debate appeared to agree that as an Island nation, our marine environment is a national asset that gives us many commercial and non-commercial benefits in terms, for example, of biodiversity, seafood, tourism, recreation, renewable energy, cultural heritage, and shipping. People are passionate about our seas and the future sustainable use, enjoyment and development of our marine area affects many people.

Managing our ocean wealth requires an overarching national marine ‘spatial’ plan to a structure to help realise the full benefit of our ocean wealth and assist with managing our resources effectively and sustainably.

The development of an overarching national MSP was identified as a Government policy objective in Ireland’s Integrated Marine Plan, Harnessing Our Ocean Wealth (HOOW). We identified that the organisation, regulation and protection of marine-based activity in Irish waters was being carried out on a sectoral and demand-driven basis, without a strategic framework in which sectoral policy objectives could be envisioned, planned and delivered over the long term.

Marine Spatial Planning is also underpinned by EU legislation. The 2014 MSP Directive established an EU-wide framework for MSP. The directive established a framework for MSP, and defined it as “a process by which the relevant Member State’s authorities analyse and organise human activities in marine areas to achieve ecological, economic and social objectives”. The Directive details the main goals and minimum requirements for Member States as:

• Balanced and sustainable territorial development of marine waters and coastal zones; optimised development of maritime activities and business climate;
• Better adaptation to risks; and resource-efficient and integrated coastal and maritime development.
• Lower transaction costs for maritime businesses and improved national competitiveness; improved certainty and predictability for private investments;
• Improved certainty in obtaining financing for investments in the maritime area; improved use of sea space and the best possible coexistence of uses in coastal zones and marine waters;
• Improved attractiveness of coastal regions as places to live and invest; reduced co-ordination costs for public authorities;
• Greater development of innovation and research; and enhanced and integrated data and information.

We transposed the Directive through the European Union (Framework for Maritime Spatial Planning) Regulations 2016, signed into law on 29th June 2016. The regulations identify the Minister for Housing, Planning and Local Government as the competent authority for MSP, reflecting my Department’s track record and expertise in relation to forward planning generally.

Senators will be aware from our earlier discussions that I am proposing amendments to the Planning and Development Bill 2016 to replace the existing regulations with a new primary legislative basis for MSP. I want to give MSP greater prominence, and introduce new arrangements for the plan making process including governance, public participation, review and Oireachtas involvement, to ensure that the processes for making Ireland’s two long term forward spatial plans, one marine, the other terrestrial, are consistent and fully aligned

Working within the existing framework, Minister Murphy and I launched Towards a Marine Spatial Plan for Ireland, a roadmap for the development of Ireland’s first marine spatial plan in December 2017.

In the roadmap document we have clearly set out the principles of engagement for this process. We believe that marine spatial plans should be strategic, concise and informed by effective public and stakeholder participation to ensure buy-in with regard to implementation. Therefore, a core objective of the MSP process will be to ensure that, as well as the wider public, all relevant stakeholders are consulted and encouraged to contribute to the process of plan preparation.

The importance of involving all stakeholders in the marine planning and marine sectoral issues was raised repeatedly during our discussion last month and I am deeply committed to it. The participation processes for MSP are being designed, tailored and structured to ensure meaningful, informed and timely engagement with the plan-making process.

We are committed to:

• Involving people early on in the decision-making process and in developing specific policy within the framework provided by HOOW;
• Engaging with interested people and organisations at the appropriate time using tailored and effective engagement methods, allowing sufficient time for meaningful consultation;
• Being adaptable, recognising that some consultation methods work better for some people and some issues and that a one size fits all approach will not work;
• Respecting the diversity of people and their lifestyles and giving people a fair chance to have their voice heard regardless of gender, age, race, abilities, sexual orientation, circumstances or wherever they live;
• Being clear in the purpose of any engagement and how the public may contribute and letting people know how their views have been taken into account within agreed timescales;
• Making documents publicly available on the Department’s website;
• Communicating clearly with people, using plain English and avoiding jargon.

In line with these objectives a three-pronged engagement strategy is now underway and I want to spend some time outlining those.

Firstly, we have established an Interdepartmental Group to lead and oversee the development of the MSP. The group is chaired by my Department and is made up of senior representatives from the Marine Institute, local government and Government Departments whose policies and functions are relevant to the plan.

Secondly I have been tasked with chairing an Advisory Group to facilitate participation in the MSP process by all relevant stakeholders from the economic, environmental and social pillars. The purpose of the Advisory Group is to harness the potential and capacity of a broad range of sectors including representation from the public sector, business, environmental, social and knowledge-based sectors to guide strategic thinking and decision-making in the preparation of marine spatial plans. We meet for the second time tomorrow and the outputs of the group will also inform the work of the Interdepartmental MSP Group and provide updates, reports or recommendations as required.

The third strand is stakeholder engagement – this is a parallel process with a strong focus on awareness-raising among coastal communities, smaller unaligned stakeholders, individual members of larger representative bodies.

This strand is critically important in my view.

Staff from the MSP team in my Department have been engaged in a series of public engagements throughout the country over the past few months and this will continue. These have ranged from conference presentations and meetings with sectoral groups such as the Regional Inshore Fisheries Forums – whose members are representative of the ‘inshore sector’ fishermen using boats of less than 12m in overall length – to smaller public meetings in coastal communities to help the public understand how they can feed into the plan by getting involved in the consultation processes. The latter have been advertised via local and regional groups, local newspapers, by direct contact with stakeholder groups and using social media, in particular Twitter. They are, by design, informal, low key and are taking place at the earliest possible stage before any ink has been committed to paper in a draft plan. They are intended purely to help explain the concept and processes around MSP and to give people time and space to think about how they want to shape the plan during the formal consultation and participation phases. Larger, more regionally focused events will take place in the Autumn of this year and into early 2018.

The first opportunity for formal input will arise in the autumn following the publication of our Baseline Report. This document will outline the current situation in our seas – the as-is situation in terms of capturing the nature and locations of existing activities, developments and marine uses. The Baseline Report will also pose a series of questions to stakeholders to help frame their submissions.

It will be published in September 2018 kick-starting a two-month consultation period. Following this the draft MSP (including Environmental Assessments) is intended to be completed by Q2 of 2019 and will be followed by a three-month public consultation.

In terms of the formal consultation on the draft marine plan, once the consultation period has closed, the responses will be analysed and a summary report will be produced detailing any comments made and published on our website. This report will also set out any changes made to the plans, any changes that weren’t made and the reasons why. Everyone who submitted a response will be notified when it is published. The final plan will be in place by mid-2020, just 30 months on from the launch of our Roadmap document.

Once the plan is in place, it will be a key strategic spatial framework encompassing all plans and sectoral policies for the marine area.

It will provide a coherent framework in which those sectoral policies and objectives can be realised.

It will be the key decision making tool for regulatory authorities and policy makers into the future in a number of ways including, decisions on individual consent applications which will have to be in line with the provisions of the plan in the same way that terrestrial plans form part of the decision making tool-kit in the on-land planning process.

Finally, Cathaoirleach, Ireland’s National Marine Planning Framework will, just as the National Planning Framework does for land-based sectors, close the loop by providing a key input to the development of future sectoral marine policies.

ENDS