NSW short-term rental legislation impending
Legislation for regulating the use of Airbnb, Homeaway, Booking.com and other short-term rental sites in NSW is coming soon. There are still a lot of rumours about which way it will go. What many strata residents and managers are afraid of though – that we’ll have no control over whether STRs are allowed in our building – is still very much on the table.
Going this route would be a clear mistake on behalf of the government. Without some means by residents to control it, many apartment buildings will be given up almost entirely to holiday rentals. The reason is simple – Investors make more money off them, and with the rise of Airbnb management services STRs are less hassle than a long-term tenant.
And it’ll be the areas where Sydneysiders most want to live that are hit hardest, like the CBD, North Shore, Inner West and the beaches. These areas will suffer what a lot of coastal towns around Australia are already being threatened with – Higher rents and cost of living, and a hollowing out as long-term residents leave. If you had an apartment in Bondi Beach where 50% of the units were on Airbnb, would you move away? If your house was on a street hit by regular Airbnb parties, how would you cope? I know what I’d do, I’d move out West.
Regulating short-term rentals is no easy task. Many cities have tried to crackdown and failed, and others have watched helplessly as an explosion of tourists rapidly change the character of their beloved communities.
The cabinet apparently debated a restriction on booking days, with some ministers arguing for no regulation at all, but a compromise of 180 looking likely. Either would be a historic mistake. The experience other cities have had with regulating short-term rentals using booking days has been of failure. Rules restricting booking days per year are at best a stopgap. There are too many loopholes and it’s too profitable to exploit them. In the past you might be able to make them work by coercing Airbnb to cooperate but with the increasing number and popularity of smaller niche sites, it’s no longer a workable solution. What’s needed is smart, simple rules that hit at the incentives that underpin the economics of it
If STRs are less profitable or a bigger hassle than long-term rentals, then they won’t take over. If they are more profitable and less hassle, as they are now in many areas of Sydney, then we only have to look at other major cities like London, Paris and New York to see what will happen.
