When the long-awaited Scottish Government expert panel report into the so-called “sharing economy” was finally published this week, it came as somewhat of a surprise to find that it played straight into the hands of the main industry player, AirBnB.
The report, published after a nine-month consultation, suggests that Scottish councils should consider a 90-day limit on AirBnB and other such short-term rentals, specifically in Edinburgh, where it says that an exception should be made “during periods of large tourist demand” such as the summer and winter festival periods.
The recommendations exactly mirror the suggestions put forward to the panel by AirBnB – one of the six core stakeholders which sat on the panel to consider the more general issue of what the government calls the “collaborative economy”. The company made public its own recommendations in a press release that was widely circulated just a few days before the publication of the full report.
Obviously, AirBnB knew what this report was going to say. It also knew that by releasing its own panel submission ahead of time, when the ink was barely dry on the proof copies of the report circulating around Holyrood – but not yet in the public domain – it would make it clear who the Alpha Male was in this situation.
While a 90-day limit on rentals is fairly standard – it is a number adopted by many other global cities including London and Amsterdam – what is not is the attempt to make exceptions for Edinburgh’s festivals. The expert panel’s report, led by Helen Goulden, chief executive of the Young Foundation, is clearly on the side of the tourism industry, pointing to a predicted upswing in tourist arrivals, which, it says in the report, are set to increase “dramatically” over the next 10 to 15 years. The Scottish Government is clearly torn between the lucrative tourism sector and the fate of local residents.
As we all know, the whole of Edinburgh is a festival. The year-round programme brings in around four and a half million tourists every year.
The summer festivals session alone lasts for over a month, while the so-called Winter Festival runs from mid December to mid January. If the Scottish Government approves the panel’s plans, then the limit for Edinburgh’s AirBnB hosts – all 9,000 of them – would be more like 150 days a year rather than 90.
Landlords who want to rent out their homes beyond that, however, will not necessarily need to lock up their properties and give up – they will just need to apply for a “change of use” to be approved as an official rental business, which will require them to pay business rates and meet certain criteria.
While many AirBnB properties are trouble free and welcomed by neighbours, critics of the platform and its competitors have raised fears of the system acting as a way for investors to snap up multiple properties and rent them out, essentially as holiday lets, but without having to go through the proper checks. Others fear a glut of rented properties is ripping the heart out of their previously close-knit communities.
Some neighbours of AirBnB homes have told me of late night parties, an ongoing feeling of uncertainty that they do not know who is sharing their stairwell, and wondering about how noisy it’s going to be that night, or the night after, or the night after that. They want change.
Yet a 150-day a year limit will affect only a small minority of hosts – in theory at any rate – and presumably, therefore, having an effect on the lives of very few neighbours of rented properties. According to the company, 53 per cent of hosts in Edinburgh rent out their property for under 30 nights, just 21 per cent for over 90 nights, and less than one in ten – just nine per cent – rent out their homes for over 180 nights. Across Scotland, more than half of all hosts rent their property for under 30 nights a year.
That is, of course, assuming that hosts use only one platform, which many do not. As a regular AirBnB user myself, I know that many apartment owners advertise their property on AirBnB, but also have their own website and are listed on competitor sites such as Booking.com.
Presumably, the new rules would mean a total of 90 (or 150) days a year across all platforms rather than just AirBnB, but how that would be checked is unclear.
For Edinburgh council – I’m focusing on Edinburgh as it has the biggest problems, accounting for almost half of Scotland’s AirBnB properties, not out of a Capital-centric focus – has all but admitted that it cannot police the sector as it stands. Neighbours who have complained about a specific property have waited months for an inspection to take place, only to be told that at the time of the inspection it was difficult to see how often the place was rented out.
The original premise of AirBnB – a platform by which people could rent out their spare space to travellers looking for a cheap place to stay – is not criticised by anyone, let alone the government, which actively encourages it through the HMRC’s “rent a room” allowance, which allows people to earn up to £7,500 tax-free by renting out a spare room in their house. This figure was raised from just £4,250 last year.
People who stay with hosts, even the most upset of neighbours tell me, are less likely to be disruptive – they have someone to answer to, a fear of upsetting a tangible human being. If they are left in a property alone – with only faceless neighbours to consider – it is potentially a very different story.
What the Scottish Government needs to decide, without pussy footing around, is if AirBnB hosts are professional landlords, or if they are ordinary people renting out space in their homes on a temporary basis. If the former, restrictions need to be tighter – whatever AirBnB might say.