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Airbnb renting crackdown is a breakthrough for NSW

June 6, 2018 Headline News No Comments Email Email

The New South Wales government will today formally announce what it calls the “toughest laws in the country” governing apartment letting through so-called “sharing economy” platforms such as Airbnb.

Strata corporations will be able to vote to ban Airbnb-style letting in their buildings, and a cap of 180 nights in any one year will be imposed on the number of days properties can be rented in Sydney. Hoteliers, and many Sydney apartment dwellers, are likely to welcome those two developments.

Some may regard the 180-day limit as too generous, though NSW Better Regulation Minister Matt Kean has described the provisions as the toughest laws in Australia.

Alex Greenwich, Independent MP for Sydney, told the strata-dwellers’ website that the changes do not go far enough to protect buildings from turning into quasi hotels because owners’ corporations will have no say when short term letting is less than 180 days a year.

He said 180 days could easily be used as a commercial model and did not truly reflect the sharing economy.

“180 days could be all of summer and most weekends; it could be every weekend with a day or two on either side. Letting a home for 180 days a year in areas of high tourist demand could be more profitable than letting out to long-term tenants.”

Greenwich said the cap in London, San Francisco, New Orleans and Reykjavik was 90 days – half the proposed NSW model. New York had gone further and simply banned all short-term letting in apartment buildings.

The NSW government’s inquiry into sharing-economy-style letting has rumbled on for almost three years. Various lobby groups and tenant associations have pressed their cases.

Hoteliers regard “sharing economy” letting, which is sometimes run on an almost industrial basis, as unfair competition. They say some “hosts” are competing with hotels but avoiding the overheads, not needing to meet the safety regulations that hotels must comply with.

The NSW reforms reportedly include a new mandatory Code of Conduct and a two-strike policy, under which hosts or guests who commit two major breaches of the code within two years will be black-banned – prohibited from letting – for five years. Fines of up to AUD 1.1 million for businesses, and AUD 200,000 for individuals, are reported to be in the wind for transgressors.

The regulations are a compromise. They will go some way to meeting the grievances of apartment dwellers living in blocks where the great majority of owners don’t want short-term holiday lets operating near their apartments or shared facilities.

Airbnb has been lobbying, saying that the great majority of people want Airbnb and that restricting it in apartment buildings would be unfair, disadvantaging apartment owners compared with the owners of freestanding houses.

The other side has pointed out that apartments are, by their nature, different. They have common walls, ceilings and floors, and sometimes share facilities, such as laundries.

Granting power to strata committees to ban sharing economy letting in their buildings is a measure forced through by backbenchers after a revolt two weeks ago. They wanted stricter measures.

Although strata committees will not be able to prevent owner-occupiers from renting rooms within their units, the revised policy will impose the 180-day cap on properties used for Airbnb-style letting in greater Sydney. No caps apply across the rest of the state.

The NSW government will review the changes in 12 months’ time to see how well they’re working.

Written by Peter Needham

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