Is The Airbnb Crackdown Going Too Far Or Not Far Enough?

The debate continues around the regulation of short-term rental accommodation and its place in our cities.

Earlier this week the NSW government imposed new restrictions on short-term holiday letting in an attempt to come down hard on an industry that has come under mounting scrutiny in recent years.

Under the new laws, owners that don’t live in their property will only be able to rent out the space on Airbnb for 180 days per year within the greater Sydney area. Strata owners corporations will also be given power to block apartments from being used as Airbnbs, and a new code of conduct for online rental platforms will be enforced to hold accountable disruptive guests.

Airbnb welcomed the changes, heralding the government’s decision as the “right balance” between protecting the rights of responsible home sharers while cracking down on bad behaviour.

But not everyone has shared the same enthusiasm for the reforms.

Rival short-term rentals site Stayz, which is now owned by HomeAway, said the NSW government’s plan was an infringement on individual property rights.

"Holidaying at a beach shack, country cottage or city apartment has been an Australian pastime for decades,” HomeAway Director of Corporate and Government Affairs Eacham Curry said.

"We fear these proposals will lead to a patchwork of regulations across the state, drive up the cost of accommodation and curtail the economic potential of the short-term rental sector.”

Online booking platforms including Airbnb and Stayz contribute an estimated $31 billion to the Australian economy each year.

The Problems With Airbnb

Sydney isn’t the first city to bring in short-term holiday letting regulations, and it isn’t the only city to experience the problems associated with the “share economy”.

The issue of “party houses” has proved a problem not only for hosts, who in cities where online platforms remain unregulated have little to no way to reprimand destructive guests, but for the neighbours who live permanently near the listed properties.

“I just had a guest check out and they destroyed my house, causing over $3500 in damages and lost bookings. The list of things wrecked is so extensive, it's not even worth going into exhaustive detail,” one host posted to the Airbnb Community page.

Several comments on the Airbnb Community site detail horrific cases of destructive guests. Image: Airbnb Community

One of the biggest concerns connected to Airbnb and its equivalents is that the platforms enable tourism accommodations to penetrate residential neighbourhoods, therefore reducing the permanent rental housing supply in high-demand cities and increasing rental prices.

On the NSW north coast, Byron Bay and its surrounding areas are a go-to tourist hotspot, and there are concerns that online rental platforms are leading to an erosion of the region’s communities. There are over 2,600 Airbnb listings in Byron Bay, of which over 2,000 are whole houses.

"Airbnb is having an incredibly corrosive affect on our community," Byron Shire Mayor Simon Richardson told ten daily.

"You can't have a community if people aren't living together. If we want people to keep volunteering at Nippers, to keep sending their kids to school and to have teachers to teach those kids at school they need a place to live."

During peak periods, tourists in Byron Bay outnumber residents 70 to one. Image: Airbnb

Short-term rental properties have also been scrutinized as having an unfair advantage over traditional accommodation providers, including hotels, who have costs and obligations reflecting their commercial status that hosts on home-sharing platforms do not.

"The Toughest Laws In The world"?

Minister for Better Regulation Matt Kean believes NSW’s new reforms will effectively address the impacts of disruptive guests, while Planning Minister Anthony Roberts says the 180-cap will ensure home-sharing does not harm rental affordability.

Lobby group Neighbours Not Strangers condemned the decision, saying the reforms will “facilitate the financial objectives” of short-term holiday letting platforms and did not meet the needs of Sydney residents.

“NSW Residents certainly aren’t [happy]. There is no platform accountability, no licensing oversight, no mandatory reporting or need to observe Residential Zoning,” the group said in a statement.

Lobby group Neighbours Not Strangers have been calling on the government to enforce strict regulations on short-term rental properties on the basis that communities are being degraded due to the constant comings and goings of tourists. Image: Neighbours Not Strangers

Compared with recent changes to international laws, the reforms are relaxed.

Beginning June 15, new laws in Japan will require property owners to obtain a government registration number before they can list their homes on platforms including Airbnb. As a result, the company has dropped nearly 80 per cent of its listings over the past three months, and are unable to advertise them again until homeowners prove they have official permission to operate.

While the extent to which the sharing economy is degrading communities and impacting on Sydney’s fragile housing market remains contentious, the opposition to platforms like Airbnb is undeniably growing Australia-wide.

Melbourne property developer Capital Alliance is set to ban short-stay holiday letting in its new apartments, while on Monday WA Tourism Minister Paul Papalia made calls for an assessment into Airbnb rules amidst concern for the state’s hotel sector.