NSW Crackdown On Short-Term Stay Gets Tick Of Approval From Parliament

The new policy will come into effect from 2019.

What you need to know
  • NSW Parliament has passed reforms to short-stay accommodation
  • The state government says the new regulations will crack down on bad guest behaviour
  • The policy will include a new code of conduct as well as reforms to allow owners' corporations to ban short-term letting on their block

The NSW Parliament has given the green light to the state government's short-term holiday letting reforms, with the new regulations set to take effect from next year.

Minister for Better Regulation, Matt Kean welcomed the decision on Wednesday, saying the reforms will bolster the state's sharing economy while cracking down on unruly behavior.

The push for better regulation in the industry comes on the back of growing problems with the sharing economy. The state government has said it is concerned platforms such as Airbnb are enabling tourist accommodation to penetrate residential neighborhoods, thereby removing rental properties from the market and potentially escalating affordability.

"It acknowledges the huge financial contribution online booking platforms make to the NSW economy, but also takes a zero-tolerance approach to raucous guests,” Kean said.

The issue of "party houses" has also proved a problem for the industry, with instances of thousands of dollars of property damage reported in various cities where short-stay accommodation is thriving.

The government has vowed its policy will incorporate the development of a new Code of Conduct to manage noise levels and disruptive behaviour being developed by NSW Fair Trading and industry stakeholders.

It will also see an amendment to the Strata Schemes Management Act which will allow owners' corporations to pass by-laws to ban short-term letting in their block, if the host is not present, provided they get a 75 per cent majority vote.

“Under our ‘two strikes and you’re out’ policy, hosts or guests who commit two serious breaches of the Code within two years will be banned for five years, and be listed on an exclusion register,” Kean said.

“I’ve asked NSW Fair Trading to develop ‘what you can and can’t do’ guidelines to help owners’ corporations set rules that suit their strata schemes.”

Industry response

The changes have been welcomed by Airbnb Australia which saw 1.6 million visitors to its New South Wales listings in 2017 alone.

A Deloitte study earlier this year found Airbnb guests contributed $1.6 billion to Australia's GDP in 2015-2016 and supported more than 14,000 full time jobs. 

Country manager Sam McDonagh labeled the reforms as a recognition by the government that the way people travel and use their homes has changed.

"The NSW Government's fair and balanced laws will protect people's rights and support healthy tourism," McDonagh said.

But Airbnb competitors HomeAway, who recently acquired Stayz, say there's still more that can be done to ensure that regulation is consistent state-wide without restricting short-term rental activity. 

“Packaged with the mandatory code of conduct, a proper registration system will ensure that home-owners subscribe to the ground rules for listing a property, and will give the wider community more certainty that complaints about noise, over-crowding or anti-social behaviour will be dealt with swiftly and decisively," HomeAway Director of Corporate and Government Affairs, Eacham Curry said on Wednesday.

Lobby group Neigbours Not Strangers slammed the decision to pass the legislation saying Parliament had rejected submissions, data and statements from residents "who have been forced to live with this illegal, short-term use of residential housing."

"The Government has failed to respect the proprietary rights of owners of existing residential property, their rights and privileges acquired under a statute or statutory rule – the conditions of development consent – that are there to restrict and prohibit short-term letting."

Airbnb Australia have welcomed the new regulations but their competitors say there's still more to be done. Image: Getty

The government's new mandatory code will come into force next year and will apply to online accommodation platforms, letting agents, hosts and guests across the State.

Minister for Planning and Housing, Anthony Roberts, said the state-wide planning rules will also detail how many days a year properties can be let beginning next year.