I wish to thank Senator Humphreys and his Labour Party colleagues for bringing forward this Bill and providing us with another opportunity to discuss short-term lettings, a matter which is a priority for this Government. I am conscious that the Senator has worked on this area for quite a while. We have had discussions about it in the House and it is to be hoped there will be some progress quite soon. I acknowledge his efforts with the Bill, which, as he said, predated the committee report. He has said he is willing to change the Bill, which I accept. That is why we will not oppose it even though we may not agree with parts of it, something I will discuss. We all agree this is an area on which we want to try to make some progress as soon as possible.
I want to 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 which can help 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, something everyone who has contributed to the debate recognised. We all recognise the importance of home sharing as an option to encourage tourism and allow visitors to be able to avail of more options and what we have to provide as a country. However, this does not reduce the number of residential units available in the economy when used properly. 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, which 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 the residential market, which is not something we want to see and is not ideal.
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, points which were well made by all those who contributed to the debate. This means fewer longer-term and secure accommodation units 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 shorter-term letting could bring.
Equally, increased tourism revenues or footfall in urban restaurants, shops and local businesses will do nothing to compensate the front-line worker who has to move from the city to the periphery of the commuter belt with all the associated burdens, such as increased travel time, costs and dislocation in terms of schools and social networks. A number of contributors highlighted this and Senator Humphreys referred to workers who want to be able to avail of accommodation in the city and find it extremely hard to so, a point to which I will return. We have to try to prioritise those who need support.
At the same time we do not want to deny people the opportunities associated with short-term letting, in the traditional bed and breakfast accommodation manner or via online platforms, 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 front-line workers pay their rent or mortgage and keep them in their homes. 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, and I think we are all in agreement about what we are trying to achieve. To specifically address the Bill's proposals, I will take the opportunity to set out the Governments position on each proposal.
Section 2 proposes to introduce a definition of short-term lettings. At present, there is no such legal definition. The Property Services (Regulation) Act 2011 uses a figure of eight consecutive weeks, but this does not take into consideration the cumulative effect across an entire season or year. I accept that Senator Humphreys made it very clear that he is willing to change parts of the Bill. I am not trying to nitpick; rather I am going through the issues we all have to face now and in the coming weeks as we address this issue. 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 the 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 six 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 bed and breakfast type accommodation.
The Bill proposes that for the purposes of the planning code short-term letting for periods exceeding six 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 regard to the short-term letting of houses and apartments.
Section 4 proposes removing the exemption under section 3(1)(1) of the Property Services (Regulation) Act 2011, which 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, that is, estate agents, letting agents and property management agents. Provision was made such that the Act does not apply to:
"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 the use of estate or letting agents and all the costs and inconvenience that can be associated with that. The 2011 Act was designed to regulate the genuine property services sector, not the tourism sector, and it was quite deliberate that genuine tourism lets were incorporated in the list of exemptions provided for. Amending the Property Services (Regulation) Act 2011, as proposed in the Bill, would significantly change the manner in which the Act operates. It would potentially place a very significant additional burden on the Property Services Regulatory Authority, which would require significant resourcing, and might 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 mean that such small operators, such as the 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. While I am going through this, I take the opportunity to acknowledge that most Senators have issues. I have spoken about the difference between cities like Dublin and Galway and counties in which there might not be the same pressure. Carlow got a good mention tonight, as usual. It is important that when we do bring forward changes, we recognise the difference in the different areas.
Under section 5, an obligation will be placed on short-term letting service providers to provide specified information to planning authorities. It is also proposed to require planning authorities to request, collect and collate such data and share it with the Revenue Commissioners on request. The purpose of the planning system is 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 the code the appropriate vehicle, to provide a wider regulatory framework for the short-term tourism-related letting sector or related tax requirements. That does not mean we do not have to do it, but issues arise in where we place such a framework.
The strategy for the rental sector recognises the potential issue of significant numbers of properties being withdrawn from the long-term rental market for use as short-term tourism-related lettings. Senator Humphreys has outlined some figures pertaining to this. We will not have exact numbers, but we all accept that they could potentially be quite high and could cause serious difficulties. This would have a negative impact on the supply and availability of residential rental accommodation and the growing use of online platforms such as Airbnb, could, if not adequately regulated, facilitate and encourage this trend.
Senators referred to other platforms. I am conscious that there are several out there. The trend is not something that we all want to buy into. We all share a general goal of progressing this issue. That is why the Tánaiste, Deputy Coveney, and the Minister, Deputy Eoghan Murphy, established a working group made up of representatives from my Department, the Departments of Finance and Business, Enterprise and Innovation, An Bord Pleanála, Fáilte Ireland, the Residential Tenancies Board and Dublin City Council to develop proposals for the appropriate regulation and 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 and the Minister is considering it. He is very anxious that we should progress this matter quite soon.
I will now address 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 for persons renting out both single rooms and entire properties as short-term lets. The precise details regarding inspection, monitoring, enforcement, limit setting and 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. That is something that is very clearly expressed by all here. We all agree that is the kind of space we are in. The regulatory approach also intends to recognise the huge difference between various areas of the country. Again, examples have been given tonight. In some places increases in short-term letting pose 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.
I thank Senators Nash, Bacik and Humphreys for introducing this Bill and for the sentiment 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, both to protect our housing and rental supply and to take advantage of the benefits that this new and growing economy provides. Again, I acknowledge the work that Senator Humphreys does in this area, and the co-operation he shows in being willing to work with the officials in our Department and the Minister as we try to tie this down and bring in some changes in the months ahead.
Some other issues were mentioned in the context of the overall supply of housing. We always acknowledge that there are still too many people living in emergency accommodation, as was discussed by the joint committee earlier. The Minister is the first to acknowledge that. What we are doing is still not enough to solve the problem. We also have to recognise that the supply of housing is increasing and that we are making some progress. Rebuilding Ireland is reaching all its targets and we are on track to deliver what we are trying to deliver. We will try to put more effort into that in order to go beyond those targets and facilitate a greater supply of housing that will help solve all the difficulties we have and that will certainly deal with the homelessness situation and the problem of people living in emergency accommodation. I have to very clearly say, and always say, that is not a place to be. It is not a place to have a family. None of us want that. I think we all support the Rebuilding Ireland plan and the spend of more than €6 billion of taxpayers' money to address this and to go beyond it. Many would call for even more than that.
Again, we must look at the facts. The supply of housing is increasing. I often hear commentary that gives the impression that nothing is happening and that we are making no changes. That is not true. The CSO, at the request of the Minister, has worked with our Department and all the other stakeholders over the last year to clarify the data and to produce data that we can all accept, as it is independent of Government. The CSO will say that last year, the direct increase in brand new houses brought into the system was in the region of 14,600. Approximately 1,100 houses came in from ghost estates. This constitutes a new supply because they are not houses that were there before. However, we are distinguishing between the two different categories. In addition, approximately 2,600 properties which have been disconnected for more than two years have now been reconnected by the ESB and are back in use as homes. As a result, there are more than 18,000 additional homes in the system throughout the country. That will be of great benefit to us in trying to address the homelessness situation and find housing for people who are on the waiting list, people who want to rent, people who want to work and so on.
The level of supply has increased. We know that this year, based on the commencement notices from last year and this year, more than 20,000 houses are coming through the system. The ESRI recognises that 20,000 or 21,000 houses should be produced this year. The Department makes a conservative estimate of about 20,000 houses coming into the system. They are new houses. Some of them are properties that had to be finished, but they are houses in the system which were not there last year. They are properties we need. They are properties we will be using for social housing and privately, in order to deliver social, affordable and private housing across the sector. It is happening, and we now have the independent data the Minister requested. I hope that people will accept that the data are independent of Government and represent the facts. This is a reality on the basis of which we can work.
Social housing is also included in that. Last year, we saw an additional social housing supply. I want to be very clear; this combines new builds, Part V housing, leasing, acquiring purchases and so on. An additional 7,000 houses have been put back into the system. Again, we will use these to provide social housing solutions for people. This year will see over 8,000 brought into the system. A direct build layer, combining all the different combinations, comprises some 4,500. While we accept that it is still not enough, it shows that the trends are going the right way. We all want to get back to a situation where the State is delivering at least an additional 10,000 social houses per year. That is the minimum we all want, across all the different parties. That commitment is there, and we will get to it within the next year or two as the supply increases throughout all the sectors. Local authorities have played a major role in leading that charge, as are approved housing bodies, as are our non-governmental organisations, NGOs. They are all playing their part with our Department and with taxpayers' money. They are bringing forward a slot of solutions. I reiterate that there were 7,000 additional houses last year and that there will be 8,000 this year. Also, if the short-term solutions are added in, through HAP and other rental subsidy schemes, an additional 17,000 or 18,000 families were helped last year. In total, 25,000 or 26,000 families were assisted in obtaining accommodation and supported in that accommodation. That is work we are all doing. That is paid for by taxpayers' money, and it is a major help and a major benefit, but it is not enough. We have to deal with that and make sure we get everybody out of hotels and bed and breakfasts, into permanent accommodation. That is what the supply of housing is about. I am glad it is moving in the right direction.
Others mentioned accommodation for people who are not in emergency situations, but who want to work in the city, take up a new job or buy their own private or affordable house. Amazon was mentioned in the context of its announcement of 1,000 new jobs yesterday. Again, the issue of where its workers are going to live was raised. It has also been raised by other companies that create new jobs. I want to be very clear. Many of the companies that are engaging with our Department and various others ask us about housing supply for the years ahead.
These companies understand there is a plan of action and a commitment regarding resources, people, staff and taxpayers' money in the system, and that we have changed the system to deliver houses. In a non-political way, they can stand aside, read the plan, see what is happening and see the targets being met and the trends. While too many people are still presenting as homeless every week and month, and we did not envisage it would continue in that way and it is affecting the numbers in hotels, they are able to see in a logical way that we are intervening and that the State is delivering private and social housing capacity, with new plans on affordable housing to be announced in the weeks and months ahead. They understand this and have confidence in us. They know we will address the housing situation and that if we stick to the plan and deliver what we are saying, we will deal with the housing shortage.
These same companies have worked with the Government and the previous Fine Gael and Labour Party Government on the Action Plan for Jobs, and they saw how we progressed it over the five years of the plan and how it delivered. It was ahead of all of its targets in delivering jobs. They understand that when the Government puts together an action plan, in the way we have with Rebuilding Ireland, which is an action plan for housing, and puts the money and Departments behind it, it delivers solutions. They accept this and this is why these companies are announcing plans to increase jobs in our various cities, rural areas and towns this year and in the years ahead. They are confident in our plans. They can see the plan, and in a calm and logical way they can read it and see it is delivering, and that if we stick to it with our spend of taxpayers' money, the housing shortage will not be an impediment to job creation and investment.
It is important we recognise this, because very often the debate is only focused on social housing and homelessness figures, and rightly so, because this is where the greatest emergency is, but we must make sure that as politicians we find solutions for housing in general throughout the system, so people of all social backgrounds can be confident they will be able to find a home this year, next year and in the years ahead and they can take up a job and we can create jobs. This is what we are trying to do. I am conscious the Bill is an important part of the work we are trying to do on focusing on managing housing stock in a fruitful way to deliver solutions to people who need them.
I thank Senators for all of their work because this is a whole-of-government approach as well as a whole-of-Oireachtas approach to devise solutions. We are making steady progress. I accept it is not enough when people are still living in emergency accommodation, and please do not try to mix my words on this. I am very conscious of this, as is the Minister. We must also recognise we are making progress and the trends are going in the right direction.