Short-term lets - licensing scheme and planning control areas: consultation

1. Executive Summary

1.1. Short-term lets have become the subject of much controversy in some parts of Scotland and evoke strong opinions. Our 2018-19 Programme for Government made a commitment to ensure that local authorities have appropriate regulatory powers to balance the needs and concerns of their communities with wider economic and tourism interests.

1.2. The Short-Term Lets Delivery Group was established in 2018 to assess the evidence base and the impact, positive and negative, of short-term lets, identify the existing powers councils have and explore whether further measures are required. The Group comprises officials from across relevant areas of government including: better regulation, community empowerment, economy, housing, licensing, planning, tax and tourism.

1.3. In April 2019, the Scottish Government launched a public consultation and commissioned independent research into the impact of short-term lets on people and communities. The 2019 consultation paper outlined possibilities for a regulatory approach, which included the licensing of short-term lets. The paper noted the range of approaches adopted in cities and countries around the world and asked for opinions on the types of short-term lets which should be regulated and the controls which should be applied. In parallel with the consultation, what is now the Planning (Scotland) Act 2019 completed its passage through the Scottish Parliament and includes provision for the establishment of short-term let control areas.

1.4. In May 2019, the Scottish Government commissioned Indigo House, in collaboration with IBP Strategy and Research and Professor Rae from the University of Sheffield, to address gaps in the available evidence on the impact of short-term lets on housing and communities. The research combined both secondary data analysis of information published by Airbnb and surveys of residents and hosts, and in-depth interviews involving residents, hosts, community actors and local businesses. Five different areas were selected for study: Edinburgh’s Central ward (the Old Town, New Town and Tollcross); Glasgow City Centre ward (Merchant City, Anderston and Yorkhill); East Neuk of Fife and Landward ward (coastal towns, excluding St Andrews); Fort William; and Skye.

1.5. Broadly speaking, the same themes, benefits and concerns were highlighted by people at consultation events, those responding to the consultation and the independent research. The reports on the consultation and research were published on 28 October 2019 and can be found here: https://consult.gov.scot/housing-services-policy-unit/short-term-lets/

1.6. On 8 January 2020, Kevin Stewart MSP, Minister for Local Government, Housing and Planning, announced plans to regulate the short-term let sector in the Scottish Parliament:

“First, I intend to establish a licensing scheme for short-term lets using powers under the Civic Government (Scotland) Act 1982. Secondly, I am prioritising work to give local authorities the power to introduce short-term let control areas under powers in the Planning (Scotland) Act 2019. Finally, we will review the tax treatment of short-term lets to ensure that they make an appropriate contribution to the communities that they operate in.”

1.7. Work to implement the regulations was paused in March 2020 because of the coronavirus (COVID-19) pandemic but resumed in July 2020. The Scottish Government aims to lay the regulations giving local authorities powers to license short-term lets and introduce control areas in December 2020 so that they can be in force by spring 2021.

1.8. This consultation covers the definition of short-term lets, the establishment of control areas under the Planning (Scotland) Act 2019 and the establishment of a licensing scheme under the Civic Government (Scotland) Act 1982. The review of tax treatment is being progressed separately and is outside the scope of this consultation.

1.9. The purpose of this consultation is to help the Scottish Government ensure that the legislation laid at the Scottish Parliament in December is as efficient and effective as possible. We want your help in getting the details right. We are not consulting on whether to implement a licensing scheme or control areas nor the broad framework of the approach. For this reason, the response form is narrowly focused on identifying issues and solutions only.

1.10. The delay caused by COVID-19 means that this consultation is only open for one month (a shorter period of engagement than originally planned). The consultation closes on Friday 16 October 2020.