Airbnb: The Death of a City

Airbnb keysafes in Edinburgh

I write this post fully cognisant of my hypocrisy, having made use of the short term holiday letting platform Airbnb, among others, in the past. Indeed, Airbnb is not the only offender, but it is by far the largest and most successful, and therefore the most disruptive. Since I became more actively involved in local politics however, I have become acutely aware of the damage that the surge in popularity of Airbnb style lettings is doing to our inner cities; and the increasing social inequality that it is driving.

I will not be using them again.

There are many reasons to be wary of private short term rentals – a quick browse of the many “Airbnb Hell” themed websites gives you an insight to what can go wrong, perhaps at the extreme end of the scale, but behind every Airbnb property is a house that someone could otherwise be living in and can’t. Obtaining up to date impartial figures is difficult – and this forms part of the problem – demonstrating that the Scottish Government has failed to keep legislation up to the challenge. However a Freedom of Information request revealed that, as at July 2017, Edinburgh had 9,000 Airbnb listings – an increase of 43% on the previous year. Eighteen months on, I can only assume that this figure has increased further, but this means that at least 1 home in 25 out of every property in Edinburgh is listed on Airbnb. [EDIT: I have just discovered Inside Airbnb, which reveals that at this moment there are approx 12,000 active listings in Edinburgh, of which 61.5% are entire homes – around 7,400 properties.] Given that short term rentals tend to be concentrated in the inner city, and the anecdotal experiences residents share of increasing number of key safes appearing in doorways, and a constant flow of trolley cases coming and going, there is growing evidence that entire postcodes are being converted into holiday accommodation.

As those with the financial leverage snap up properties to cash in on the Airbnb boom, this reduces housing stock available to first time buyers and those struggling to get on the property ladder. Given Edinburgh’s high volume of tourism, it is no surprise that house prices in Edinburgh increased 13.2% over the year to April 2018, compared with a UK average of 3.9%. This means that someone saving to buy a £150,000 property (of which there are not many in the city) at the beginning of the year, would now need to find £170,000. Assuming a 10% deposit, this would mean they would need to increase their monthly savings by £165 just to cover the difference. It is no wonder that many families simply cannot keep up with property price inflation in the city, and the dream of owning property becomes more and more distant.

Recently, it has emerged that Airbnb are lobbying the Scottish Government through the PR firm Halogen in an attempt to stymie any further legislation on this market sector. Airbnb are quick to point out that listing numbers do not necessarily reflect the number of entire homes taken off the market for the entire year. While this is true, and there is no harm in someone renting out a spare room for a bit of extra cash to help cover the bills, part of the problem is that there is no clear data available to understand the overall picture. A quick search on Airbnb’s website for Edinburgh has revealed that as at this moment in time, there are well in excess of 2,000 (the upper limit that Airbnb will show) entire homes available to let. This suggests that there is a significant proportion let in this way.

Another factor to consider is that as the Scottish Government has recently brought in new stricter legislation on Private Residential Tenancies, but failed to address short term holiday lettings, many private landlords are electing to withdraw from the residential market, and opt instead for short term holiday lettings, which are proving far more lucrative. This creates a double shock for low income families, as not only are they being priced out of buying property, but the availability of residential tenancies has drastically reduced, and accordingly rental prices have increased. A report by the Residential Landlord’s Association showed that between 2016 and 2017, across the UK nearly 13,000 homes had been taken off the private residential market. Data from Citylets showed that rental prices for 1 bedroom flats in Edinburgh have gone up by over 38% in the last 5 years.

Finally, there are the legal and safety aspects to consider. All tenancies (holiday lets included) are required, in Scotland, by law to have ensured that all appliances have been electrically tested and certified as safe. Where there are gas appliances or heating, these also must be tested to ensure that these are safe and no carbon monoxide emissions are present. Private Residential landlords are aware of these requirements, and for the most part, will adhere to the requirements, as negligence will result in them losing their licence. The majority of short term holiday lettings are performed casually, and there is no licencing regime in place to regulate compliance, and so often these requirements are ignored. Furthermore, there is evidence to suggest that a significant number of holiday lettings are performed by unscrupulous tenants subletting without permission, which invalidates buildings insurance, and can mean that should anything happen during a stay, that holidaymakers are simply not covered.

In my view, the Scottish Government needs to take steps to ensure that the short term holiday letting market is regulated – including landlord registration. A cap needs to be placed on the number of nights that a property can be let before business rates become applicable, and a cap on the total number of permanent holiday let properties needs to be set. Short term letting marketplaces should cooperate to create and maintain a database of private and social residential properties to ensure that these are not being illegally let on their platform.

Until this time, I urge you to consider the social welfare and inequality issues that you are perpetuating by using platforms like Airbnb, and if you feel strongly about it – contact your MSP to ask what they are doing about it.

Category: Airbnb | Tags: , , ,
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