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Airbnb War Needs Government to Legislate a Truce

April 7, 2017 OTA News 1 Comment Email Email

The war between Airbnb and apartment owners is only going to get worse unless the government takes decisive action to regulate the short-term letting industry, according to strata industry expert Paul Morton.

The NSW Government is due to give its response to the report of the Parliamentary inquiry into Airbnb next week and Mr Morton, managing director of Lannock Strata Finance, fears it will fall short of the legislative toughness required to resolve the heated issue.

“On one side is an aggressive, revenue-dominated multinational with the resources to lobby government and on the other, apartment owners who don’t want their homes turned into hotels and party houses,” said Mr Morton.

“The Parliamentary inquiry recommended giving the green light to Airbnb rentals without risking council fines which will satisfy those owners who want to earn extra income through Airbnb rentals but fails to protect the rights of owners who involuntarily find themselves living in a hotel and not the home they thought they were buying.”

Mr Morton said it was up to government to find a middle ground that broke through the entrenched positions of the two opposing sides.

“Both sides of this debate are going to have to give a little but that won’t happen unless government gets the balance right with a fair use fair pay policy for strata short-term lets.”

“Airbnb has sought unfettered use of properties everywhere and those who use this platform have assumed that it’s their right to do so. If it were just about letting a spare bedroom for the occasional guest that might be fine but we are talking about people buying and leasing apartments specifically to put them on the short-term letting market full time; in effect creating hotels where none were expected or even permitted.”

Mr Morton said that owners who opposed short-term letting were concerned about a number of problems including security risks, over-crowding, noise, anti-social behaviour, and increased wear and tear on the common property to which the short term letters don’t contribute a fair share.

“Short-term letting is an economic activity.  For government, that means revenue; there’s not just the opportunity, but the social obligation to tax Airbnb’s Australian revenues,” said Mr Morton. “With that tax comes the government’s responsibility to properly regulate this new sector. “

Mr Morton said the issue could be resolved if government was willing to consider the following five points:

  • Allow each body corporate to determine whether or not individual units can be let on a short-term basis.
  • Set up a system to categorise the types of short-term rental properties and let strata owners vote on the category for their building.  Unlimited short-term letting could be at one end of the scale and a complete prohibition at the other end.  There could be several intermediate categories with increasing requirements for security and temporary guests’ behaviour.
  • Ensure that short term landlords don’t get a free ride on the use (or abuse) of the common property and instigate a system of appropriate payments by the individual landlords for the increased use of common property.  This could take the shape of a percentage of the short term letting revenue payable to the owners’ corporation, a fee per lease or a bond to be placed prior to any rental start.
  • Further regulate and enforce existing guidelines on tenants’ behaviour in regards to use and noise.
  • Ensure appropriate controls over sub-letting – owners of rental properties should have a say in whether their investment is available for short-term letting.

Currently there is "1 comment" on this Article:

  1. Chris Wilson says:

    Residential Housing is for the housing of Residents. Airbnb commissioned a Deloitte Report and claims they’re contributing $1.6 billion a year in tourist revenue. Were Airbnb to disappear from NSW, would tourists stop coming? No. They’d still come and stay in licensed accommodation. And produce jobs and tax revenue. And they’d stop robbing residents of housing. Using San Francisco Financial Controllers’ modelling, Airbnb’s control of 38,000 NSW homes is creating a LOSS of AUD13,680,000,000/year. SFO again: “Even when properties generate visitor income, the economic harm associated with higher housing costs is severe and exceeds any benefits from spending/income.”
    The NSW Land and Environment Court has consistently and repeatedly judged mixing short-term lets with permanent residential occupancy “fundamentally incompatible”.
    It’s NOT just Airbnb. It’s Expedia, Agoda plus thousands of other Internet Platforms.

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