Ireland to regulate Airbnb-style rentals to tackle housing shortage

DUBLIN (Reuters) - Ireland will tackle a severe housing shortage in booming cities such as Dublin by regulating short-term lettings and home-sharing sites such as Airbnb, housing minister Eoghan Murphy said on Thursday.

Like many countries around the world, Ireland is grappling with the effect that the rising popularity of home sharing is having on tight housing supply - particularly the falling number of properties available for longer-term rental - a decade after the bursting of a housing bubble.

Although Ireland was left with a surplus of houses after the 2008 crash that halved values, homes have become especially scarce as the economy and population grow faster than anywhere else in the EU.

The new regulations, which are similar to those introduced this year in Toronto, will come into effect from June and aim to discourage professional landlords from withdrawing their properties from the long-term rental market in favour of short-term arrangements.

Other cities, including Berlin, Barcelona and Paris have also taken steps to limit the number of properties being used for short-term rentals, with the practice pushing up longer-term rents and pricing out local people.

"We want to protect...home sharing where someone might let a room in their home or indeed the entire house if they go away for a two-week holiday to pay the bills," Murphy told national broadcaster RTE.

However, the government aimed "to end the practice where someone with a second home...might have taken that out (of the long-term rental market) because it's very profitable to do the short-term tourism letting".

Under the new regulations, second-homes cannot be used for short-term lettings unless already approved for short-term tourism letting by the local planning authority.

Owners of second homes can apply to planning authorities for a change of permitted use, but where demand for long-term lettings is high, they are unlikely to win approval.

Homeowners will be able to let their entire primary residence on a short-term basis for a maximum of 90 days in a year and up to 14 days at a time, and rent out a room within their home without restriction.

"1 in 5 Irish families use Airbnb to share their homes, boost their income and explore the world, and rules that legitimise home sharing are in everyone's best interests," said a spokesman for Airbnb in a statement.

"But home sharing didn't cause Ireland's historic housing concerns, and many will be disheartened to hear a false promise that these proposals are the solution."

Just under 8,000 new homes were completed in Ireland in the first six months of the year, up 30 percent year-on-year but still set to fall well short of the 35,000 analysts say are needed annually just to keep up with demand.

(Reporting by Graham Fahy; Editing by Kirsten Donovan and David Stamp)