A leading industry body has slated the NSW government’s new cap on Sydney short-term letting, saying it will cost regional jobs and compromise guest safety.
The Accommodation Association of Australia has labelled the plan a “cosy deal between Airbnb and the NSW Government for weak regulation of short-term letting”.
The state government announced the crackdown on Tuesday following intense lobbying by the accommodation industry urging members to consider the safety dangers, housing shortage issues and lack of fairness created through an unregulated short-let system.
The reforms introduce a 180-day cap on the number of days empty properties can be rented in Sydney, and give strata corporations the power to ban Airbnb in their buildings.
They include a two-strike policy through which hosts or guests who commit two serious breaches of the code within two years will be banned from using short-let platforms for five years and placed on an exclusion register.
Investment properties will only be able to host Airbnb-type lettings for 180 nights a year, and will give strata companies the power to ban the practice in their buildings.
But AAoA chair Richard Munro said the laws will allow ‘quasi-hotels’ to flourish in Sydney and place even greater pressure on housing affordability.
“This is a very disappointing outcome for the accommodation industry, particularly the way it seemingly thumbs its nose at operators of accommodation businesses in regional NSW,” he said.
“On the surface, it appears a cosy deal has been struck between the minister for innovation/better regulation and Airbnb, with little or no input from our members.
“The 180-day cap for short-term letting in greater Sydney is nowhere near enough to minimise the incidence of residential apartment blocks quietly becoming quasi-hotels – and the reality is any consumer who stays in such properties faces a much higher safety risk because of the lower standards which are in place.
“Of major concern to our industry is the jobs this dodgy deal will cost in regional areas as a result of there being virtually no cap on the amount of time short-term letting can take place outside greater Sydney.”
Better regulation minister Matt Kean described the reforms as the “toughest laws in world to crack down on bad behaviour” in the short-term letting industry.
“We’ve got the balance right between protecting people’s property rights, between recognising owner’s corporations have a role to play in the governance of strata schemes, and ensuring people who want to use these platforms like Airbnb are able to do so,” he said.
The new laws, which will be introduced in coming months, impose the cap on properties used for Airbnb-style letting in greater Sydney when hosts are not present, but there are no caps across the rest of the state. Councils outside of greater Sydney will have the power to impose their own caps, no lower than 180 days per year.
Tourism Accommodation Australia CEO Carol Giuseppi welcomed the crackdown, but said it did not go far enough.
“While the accommodation industry recognises the settings are a step in the right direction, and do provide strata controls, we believe the key to getting the settings more balanced is ensuring the mandatory Code of Conduct is properly enforced,” she said.
“We believe the key to actual implementation will be ensuring the Code is developed with stronger controls – beyond that of regulating bad behaviour.
“To protect both visitors and communities the proper insurances, fire and safety protections and security need to be put in place.”
The policy will be reviewed in 12 months.
The reforms also include changes to strata legislation to empower owner’s corporations to pass bylaws banning short-term letting in their buildings, but not on properties which are owner-occupied. Strata committees will not have the power to prevent owner-occupiers from renting rooms within their units.
As a compliance mechanism, Airbnb and other operators will be required to sign up to the code of conduct, and share their data with the NSW government.
The Department of Fair Trading will also be given new powers to police the online platforms and letting agents, and will use the data supplied by the platforms to assess complaints to determine whether a strike should be issued.
Companies which breach the code of conduct or the strikes policy will face significant financial penalties, including fines of up to $1.1 million for corporations and $220,000 for individuals.
Airbnb’s Chris Lehane hailed the reforms as a potential “world model” for the industry, describing them as “fair and balanced”.
However, rival holiday-rental platform HomeAway argued it could lead to a patchwork of regulation across the state. Director of corporate affairs, Eacham Curry,told Fairfax Media the government was seeking “to arbitrarily impose restrictions on the use of private property” and labelled the new strata powers a “retrograde step”.