Report by the Scottish Expert Advisory Panel on the Collaborative Economy

Today, the Scottish Expert Advisory Panel on the Collaborative Economy published its final report. This Panel was established by the Scottish Government to explore the potential and challenges arising from the growth in digital platforms providing peer-to-peer services whether they be finance, taxi-rides, room-sharing or other services traditionally provided in a conventional market-based economy.

The terms of reference for the Panel were as follows:

The Cabinet Secretary for the Economy, Jobs and Fair Work established the independent Scottish Expert Advisory Panel on the Collaborative Economy to make recommendations to Scottish Ministers on how Scotland can position itself to take advantage of the opportunities of the collaborative economy and overcome any regulatory, economic and social challenges. The job of the advisory panel is to make recommendations that show how Scotland can position itself to take advantage of the opportunities of the collaborative economy.

While the Scottish Government’s initiative in this emerging economic sector is welcome, the Panel’s report falls short of critically analysing the impact of the collaborative economy on individuals and communities in relation to short-term lets. Despite devoting over a quarter of the report to this sector, the recommendations are confused because they attempt to conflate two very different issues, namely:

  • home-sharing and;
  • commercial letting.

As the Homes First campaign has developed, the Scottish Government has increasingly responded to the issues raised by referring to the work of the Advisory Panel. In our view this has been misguided because the collaborative economy in the short-term letting sector is concerned with genuine peer-to-peer services where people rent a room in their own home or the whole home when they are away at a weekend or on an annual holiday.

Over the last year, however I have been inundated with correspondence from constituents, not concerned about their neighbours inviting folk to stay but about their experience of residential property being converted into commercial short-term or holiday lets. Many report instances of anti-social behaviour, excessive noise and feelings of isolation and poor mental health as they experience the daily stress and anxiety of unknown strangers occupying neighbouring flats.

The Panel’s report attempts to acknowledge this but ends up conflating the two very different issues. So, for example, it proposes “experimenting” with a 90-day limit - which funnily enough is precisely what Airbnb have been proposing over the past fortnight (perhaps not surprising given that Airbnb were a member of the Expert Advisory Panel!). It recommends that any lets beyond 90 days would require planning consent for a change of use but fails to say whether this should apply equally to folk sharing their own home for more than 90 days and to those operating commercially in premises which is not anyone’s home.

Again, unsurprisingly, given that Airbnb was a member of the Panel, the report recommends that online platforms be given a role in policing any such regulations. As I proposed last week, a 90-day limit on a website (which in fact would be 156 days in Edinburgh) is not legally enforceable as as a regulatory regime supported by legislation.

Furthermore, the report contends that there is no “legal threshold for what constitutes ‘change of use’ for properties” in Edinburgh. Yet, as reported earlier this month, the Council made a significant planning decision, which refused consent for a conversion of a short-term let extending over 107 days – a far shorter period than the 156 days being recommended by the Airbnb and the Panel.

Worrying still, there is a laissez-faire approach to the health and safety of short-term let tenants and their neighbours, which negates any responsibility. Proposing that short-term let websites should “experiment” with different methods of enforcing health and safety is alarming and a long way short of proper implementation of sound health and safety guidance as is already set out in the Private Rented Sector.

Whilst the report contains some useful evidence and recommendations, those concerning short-term lets are framed very much by what is in the vested interests of the industry (and Airbnb in particular). They fail to properly analyse and come up with proposals for the real problem which is the conversion of homes to commercial enterprises, and they are dominated by proposals to experiment, gather data, and explore viability when what is need is action very soon to stop any further loss of homes and community in Edinburgh.