How Can We Balance Tourism Growth with Housing Affordability for Local Communities?

Cultural Erosion and Authenticity: Tourist-driven commercialization can dilute local culture and erode authenticity. Traditional practices may be modified or commodified for visitors.

To address these challenges effectively, it is crucial to implement sustainable tourism development policies that balance the economic benefits of tourism with the protection of the well-being of local communities and the conservation of natural resources.

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A1. El impacto del crecimiento de la actividad turística en los municipios se ha convertido en un fenómeno global, presente en todo tipo de municipios, destinos y comunidades, tanto en grandes ciudades como en destinos turísticos consolidados (litoral, montaña, etc.) incluso en pequeños municipios rurales y de zonas de interior, especialmente los situados en entornos de calidad próximos a zonas urbanas y que han mantenido el carácter rural.

En estos últimos años, el problema se ha agravado creo que, entre otros motivos, por:

  • En zonas turísticas consolidadas, era tradición que muchos establecimientos (especialmente alojamiento, restauración, etc.) ofrecían alojamiento a sus trabajadores, a menudo en condiciones precarias y por tanto, cada vez menos atractivas en un país desarrollado en que la población exige un mínimo de calidad.
  • Había una separación muy clara entre las zonas turísticas (donde se concentraban el alojamiento y los servicios) y las zonas donde tradicionalmente vivían los residentes. Actualmente, se han roto estas barreras al aparecer el fenómeno de alquiler de apartamentos y de habitaciones, a través de las plataformas online.
  • En destinos rurales (micropueblos) se sufren también estos problemas de dedicar vivienda a segundas residencias y/o “turismo rural” con el agravante de que, en paralelo, hay una reserva de casas deshabitadas en proceso de degradación que impide atraer población permanente.

Esto es uno de los temas que la “Associació de Micropobles de Catalunya” puso sobre la mesa, en un proceso de diagnosis del futuro de estos pueblos, realizado en 2022-2023.

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Hi - I’m Karen Simmonds, Founder of Travel Matters and the Make Travel Matter Campaign.

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Hi all! Tourism provides a significant number of jobs in Cape Town which is obviously very important, especially in the context of South Africa’s high unemployment rate. However, thousands and thousands of homes have been removed from the housing market entirely because of Airbnb and this is having serious negative consequences for local families.

Rents have increased and the number of properties available for rent in the most well-connected parts of the city has decreased substantially. Even households that earn more than 75% of the City’s population no longer have any hope of living in a central area and Airbnb and short-term lets have been a major driver of this issue. This is all made significantly worse by the fact that we already have one of the worst housing and segregation crises globally which is just being further and further entrenched by the phenomenon of short-term rentals

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Increased Crime and Moral Behaviour: Tourism can lead to an increase in petty crime, scams, pickpocketing and unethical behaviour targeting tourists, straining community trust in safety at popular destinations.

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Some additional information about tourism in Malaysia

Importance of tourism industry in Malaysia

  • Tourist arrivals increased 100% between 2022 (apprx 10 mil.) and 2023 (apprx. 20 mil.)
  • Top 5 arrivals from Singapore, Indonesia, Thailand, China and Brunei
  • In 2022, tourism contributed to 14% of GDP
  • Malaysia welcomed 20.1 million international tourists in 2023, generating a substantial revenue of 71.3 billion ringgit (US$14.9 billion).
  • Deputy Tourism, Arts and Culture Minister, Khairul Firdaus Akbar Khan, has confirmed the government is targeting of 27.3 million international arrivals in 2024, with 102.7 billion ringgit (US$22 billion) expected for the nation’s coffers.
  • GDP rank - third largest GDP contributor after manufacturing and commodities sector
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Translation: Hello, good afternoon! I am Josep Capella Hereu, director of DECABA. We provide support to public administrations as well as companies and associations in the private sector on issues related to sustainable tourism and local development.

Hello, I am José Ramón-Cardona from the Ibiza Island Council University College of Tourism. The first thing to note is that difficult-to-solve problems are often characterized by having multiple causes and persistent inaction over a long time, creating a serious situation. The management of tourism development and its impacts on mature destinations is a clear example, and as such, responsible governments do not dare to guarantee that the tourism development in their region will be optimal despite correctly implementing prior regional planning.

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The growth of tourism can have both positive and negative impacts on local communities. Here are some specific social challenges related to housing and quality of life:

  1. Housing Affordability and Availability:
    o Example: As tourism increases, demand for housing rises. This can lead to higher property prices and reduced availability of affordable housing for local residents.
    o Mitigation Strategies: Some places implement regulations to limit short-term rentals (like Airbnb) to preserve housing stock for locals.
  2. Gentrification and Displacement:
    o Example: Tourists often prefer historic or picturesque neighborhoods, leading to gentrification. Original residents may be pushed out due to rising costs.
    o Mitigation Strategies: Community land trusts, rent control, and affordable housing initiatives can help prevent displacement.
  3. Seasonal Employment and Job Instability:
    o Example: Tourism-related jobs may be seasonal, leaving locals unemployed during off-peak months.
    o Mitigation Strategies: Diversifying the local economy and providing training for year-round employment can help.
  4. Cultural Erosion and Identity Loss:
    o Example: Increased tourism can dilute local culture and traditions, impacting residents’ sense of identity.
    o Mitigation Strategies: Promoting cultural events, heritage preservation, and involving locals in tourism planning.
  5. Strain on Infrastructure and Services:
    o Example: Overcrowding from tourists can strain public services (water, sanitation, healthcare) meant for locals.
    o Mitigation Strategies: Investing in infrastructure upgrades and managing visitor numbers.
  6. Increased Cost of Living:
    o Example: Prices for goods and services may rise due to tourism demand, affecting locals’ affordability.
    o Mitigation Strategies: Balancing tourism revenue with affordability for residents.
    Remember that each community faces unique challenges, and solutions should be context-specific. Collaborative efforts involving residents, local authorities, private sector and civil societies are essential for sustainable tourism development.
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A1.1. Rising rent and property prices

  • Rental prices in Ibiza have surged significantly. Over the past year alone, in the municipality of Ibiza rental prices have increased by 16.91%. This rise has made it increasingly difficult for locals to afford housing, pushing many into precarious living situations.
  • Property sale prices have similarly escalated, averaging €6,619 per square metre, a 13.73% increase from the previous year. This makes homeownership unattainable for many residents, further exacerbating the housing crisis.
  • Many locals, including essential workers such as teachers, nurses, and police officers, are unable to afford these costs, leading to extreme measures like living in cars, tents, or shared accommodations under poor conditions. It is also leading to many long-term residents to feel forced to leave the island.
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A1: Locals are becoming frustrated with rental costs and affordability of housing, which at certain times of the year can be exhaustive, as multiple property owners are increasing the cost of rent, for the following reasons:

• Rent prices have slowly increased across the UK since 2015, but have spiked since 2022. Statista, suggests that landlords are upping their prices, due to the increased costs of running their rental property, in order to match inflation.
• However, another popular theory is that some landlords & letting agents are set to capitalise on the high demand of visitors.

The latter is in line with an increased fluctuation in tourism (domestic and inbound), which often leads to a rise in short-term rental properties (e.g. Airbnb). This reduces the availability of long-term housing for locals and drives up rents and property prices.

With the build up to the UK’s 2024 General Elections, many parties included ‘Rent Controls and Fair Rent’ policies in their manifestos, calling for rent controls and a raft of other measures is accusing the current rent rises of being driven by “Profiteering Letting Agents.”

Naturally, this has a knock-on effect within the tourism sector, which is susceptible to such external market factors as; economic instability, shifting exchange rates, pandemics, terrorism and other socioeconomic or environmental disruptions, which of course affect housing affordability.

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A1.2. High vacancy rates:

There is a study that reflects that approximately 19.89% of the properties in Ibiza are vacant, and 37% in the case of Formentera, exacerbating the housing shortage. These properties remain empty either due to owners holding out for higher prices or fear of squatters—another big issue on the island.

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The challenges are strongly determined by the speed of tourism growth, the ability of administrations, entrepreneurs, and residents to effectively react to the changes it produces, and related to this last aspect, the degree of planning by public and private entities. The faster the growth, the more severe the problems and difficulties that arise, mainly because infrastructures, services, and society are unable to react adequately to the changes: infrastructures are insufficient and saturated; public and private services lack sufficient capacity, and local changes (of all kinds) exceed the residents’ ability to adapt. In this context, the housing shortage and high prices, whether for purchase or rent, are merely a reflection of a general situation of declining quality of life, especially in the absence of planning.

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A1.1: Tourism growths leads to the impoverishment of the local community and the displacement and destruction of what matters to them and that makes life special in the destination they call home (cultural and natural heritage, people they love, decent jobs, places of aggregation, essential services…).

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A1: We are currently living in a season of global uncertainty and with geo politics having an impact on desirability of places to live; people are now moving through displacement, natural disasters and/or war.

For instance, approximately 74,000 Ukrainian refugees have found refuge in the UK, under the ‘Ukraine Family Scheme’ and ‘Ukraine Sponsorship Scheme’, as of 9 May 2023, following the military invasion of Ukraine, by Russia on 24th February 2022 (Public Policy Exchange).
This creates pressure points and a negative impact in liveable places. People will visit safe countries, natural beauty spots, historical and cultural areas, so local communities have to balance this influx of visitors. Local stakeholders, now more than ever, need to sustain the higher volume of people during popular seasons. Just look at the anti-tourist protests in Barcelona and Mallorca during 2024.

Affordable housing, as well as better transport infrastructures, is required to maintain a diverse and vibrant community providing economic stability for local residents. Again, we examine the failures of local authorities within the UK, to safely maintain roads in England and Wales. The Asphalt Industry Alliance (AIA) said councils and their roads are at “breaking point”, due to potholes, with repairs at an eight-year high. The AIA has addressed that local councils are expected to fix two million potholes during this financial year, which is an increase of “43% on the previous year and the highest annual total since 2015-16”.

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A1.2 Algunas de las causas relacionadas con esta problemática creo que son:

  • Falta de una estrategia global de “desarrollo local”. A menudo se diseñan Planes Estratégicos temáticos relacionados con el turismo, o con el comercio, o con la agricultura, etc. sin una visión global del concepto de “desarrollo local” que a mi entender se fundamenta en:

“un proceso que, a partir de la identificación de los recursos endógenos de un territorio y una concertación de los actores públicos y privados, busca diseñar actuaciones que ayuden a mejorar el empleo, la generación de rentas, etc. con el objetivo final de mejorar la calidad de vida y el bienestar social de los habitantes”.

  • Falta de intervención de organismos públicos para ordenar y regular los mercados. Ha sido muy recientemente, cuando la problemática ya es grave, que se ha empezado a intentar ordenar la legalización de viviendas turísticas y limitar el número máximo en función de la población residente, en algunos destinos. El que conozco mejor es Catalunya.
  • A pesar de que estas regulaciones son recientes, hasta el momento no veo que vayan acompañadas de recursos humanos y técnicos para su correcta implementación. El número de “inspectores” que puedan supervisarlo es muy bajo.
  • Faltan instrumentos públicos pensados para abordar y dar respuesta a estas problemáticas. De momento no conozco iniciativas en este sentido aquí en España.
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In the case of Ibiza, the housing problem is just the most striking element, as there are problems in all aspects of daily life. For example, gasoline is 10 or 12 cents per liter more expensive than on the mainland. Supermarket products, restaurants, among other examples, are much more expensive than on the mainland or in Mallorca. Regarding services, the public sector is always overwhelmed, especially during the tourist season, and in the private sector there are few providers for the existing demand, resulting in expensive, slow, and poor-quality services. All these elements, along with relatively low salaries, cause a deterioration in the quality of life for residents that is not new and has only worsened in recent years. As for the actions taken by the administrations, they have always been minimal and more guided by political ideologies than by a reasoned analysis.

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Another related issue in Cape Town is that almost all new development in central areas is catering to Airbnb and short term lets by providing very small micro-apartments. Given average household sizes, these apartments will never be able to accommodate normal families. So not only is Airbnb strangling our housing supply but it is also reshaping our urban fabric in an inappropriate manner.

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A1.3. Impact of tourism on housing:

  • The high demand for short-term tourist rentals has driven property owners to prefer these over long-term rentals to locals, resulting in higher profitability but reduced availability for residents.
  • The prevalence of illegal short-term rentals has further intensified the housing crisis, leading to higher fines and efforts by local authorities to curb such practices.
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