Airbnb permits stir debate: Industry experts share mixed reactions

In a bold effort to address Brisbane’s escalating housing crisis, landlords will soon need council-approved permits to list their properties on short-term rental platforms like Airbnb. This week’s announcement by Brisbane Lord Mayor Adrian Schrinner sent ripples across the accommodation industry, with leaders weighing in on the potential impacts of the new regulations.

AccomNews reached out to accommodation industry experts who have very different opinions regarding the council’s plan, which aims to reclaim hundreds of homes for the long-term rental market.

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Key details

Permit requirements:

Brisbane property owners will need to secure a permit before listing their homes on Airbnb. Permits will only be issued if landlords have appropriate planning approvals, body corporate support, and a 24/7 property manager. Properties that do not meet these requirements must revert to long-term rentals to help meet the city’s rental demand.

Rationale:

Mr Schrinner explained that the council’s plan is to prevent properties from being used as “mini-hotels,” thus returning them to the long-term rental market. This is part of a broader strategy to address surging house prices and rental demand in Brisbane, which now has the second-highest property prices in Australia and a rental vacancy rate of just 0.9 percent.

The Lord Mayor says council will only issue a permit if they [landlords] have planning approvals in place, and if it’s appropriate, and if it has the support of a body corporate and calls on the state government to allow body corporates to pass by-laws that prohibit and restrict short-stay accommodation in their buildings.

“People in a building will have a view on whether this is a good thing or not, [but] at the moment they don’t have the power to stop it,” Mr Schrinner said.

Industry perspectives:

Strata

Chris Irons, former Queensland’s Commissioner for Body Corporate and Community Management, and current director of Strata Solve, says the proposed requirement for lot owners to gain body corporate consent for short-stay letting permits will not only mean big changes for the strata industry but also big disputes!

He said: “The council is advocating for changes to Queensland strata legislation to allow a body corporate to prohibit, or strongly regulate, short-term letting in a building.

“These are significant developments because as it stands, a body corporate cannot prohibit short-term letting.

“It is a position confirmed in several legal cases over the years, stemming from adjudications (and appeals) based on section 180 of the Body Corporate and Community Management Act 1997, and in particular, subsection (3): ‘If a lot may lawfully be used for residential purposes, the by-laws can not restrict the type of residential use’.

“If the state government agrees to council’s changes, it will mark a major policy shift and set the scene for battles within bodies corporate. You will on the one hand have owners who let out their property on a platform like Airbnb, facing the prospect of that business ceasing unless they can convince other owners or a strata committee otherwise.

“Then you will have some owners and some committees who are ideologically opposed to Airbnb, and the like, and who would never approve a permit in a million years, just on principle.

“While giving bodies corporate the right to decide what works for them is a positive step, it has to come with fair and reasonable guidelines and based on what council is saying so far, it seems tipped too far in one direction.”

Strata Community Association Queensland (SCAQ): Queensland’s organisation for professional body corporate and community title management.

Strata Community Association Queensland (SCAQ) general manager Laura Bos says she is backing calls to let body corporate committees make their own rulings to ban or allow short-stay accommodation (SSA).

On Brisbane City Council’s Short-Stay Accommodation Taskforce’s report Ms Bos noted, short stay accommodation is a vital component of the future – especially looking to the 2032 Brisbane Olympics and Paralympics  – its key focus was to outline a management framework to balance the needs and rights of property owners with those of their neighbours.

“In framing our recommendations to the taskforce, we had a unifying view – that it’s not about putting an end to short-stay accommodation as an industry, but about finding a way to manage it appropriately,” she said.

“Part of that is recognising that it takes different forms of accommodation option in different locations.

“In the heart of cities, for example, where short-stay accommodation is most often in strata complexes, people may treat their letting as a destination and getaway, shedding their usual inhibitions on noise and privacy to the detriment of neighbours who call the complex home.

“That’s why it’s critical for individual body corporate committees to have the right and freedom to make that decision for their own complex, especially given the ever-growing number of people who call strata communities home.”

Ms Bos added: “Ultimately, state legislation has not kept up with the disruption caused by the evolution of the short-stay accommodation sector, and it’s something they need to look at and fix – immediately.”

ARAMA: Represents resident accommodation managers

“Hang on! There isn’t an apartment crisis – there is a housing crisis,” says Trevor Rawnsley CEO of the Australian Resident Accommodation Managers Association (ARAMA), who is concerned about “over-regulation” in the industry.

“The latest moves by Brisbane council will not solve the housing crisis”, said Mr Rawnsley who has previously called on governments to ban detached houses from the holiday and short-term rental market.

He said the current housing crisis was largely caused by a combination of overseas-owned online travel agencies (OTAs) like Airbnb taking family homes out of the long-term rental or owner occupation mix, plus harsh rental tenancy laws.

Brisbane council’s stance on raising rates is not unexpected, he says other councils have also taken this stance and it has not solved the problem.

“ARAMA has been involved in discussions with governments over housing and short-stay accommodation for many years but Brisbane’s council has now gone further than just increasing rates and introducing permits,” he said.

Mr Rawnsley clearly supports the principle of registration through licencing with management rights businesses ideally placed through their letting agreements but he says he finds the “scary” recommendation of giving one lot owner power over another – “offensive”.  

He is concerned that giving bodies corporate (usually dominated by owner occupiers) the power to control other unit owner investors by restricting or banning short-term letting in strata is “un-Australian”.

“What about giving people a fair go? This is not ‘The Castle’,” he said. “It’s the thin edge of the wedge, what’s next? banning singing in the shower or whistling on a Tuesday?

“For harmonious community living in schemes, it is the behaviour of the occupants that is important. Good communication between the body corporate, onsite manager and unit owners is vital, giving one party more power than another is a really dangerous path to take and where will it end?”

Instead, the solution according to ARAMA is for governments to provide investors with incentives to switch their housing investment portfolio to long-term rentals. “Use a carrot and not the stick”.

Mr Rawnsley said some of his members who manage unit blocks use OTA platforms to market their holiday apartments, but this was far different to listing traditional suburban family homes on Airbnb and other OTAs.

“Unit blocks must have short-term letting as part of the mix because tourism is also important, and most units that have holiday letting are in tourist areas.

“High-rise apartments are perfect for short-term letting and long-term letting and can segway between the two types depending on market demands.”

Australian & New Zealand Short Term Rental Association (ASTRA): Representing the short term rental industry

ASTRA CEO Mitchell Price told us: “We too, strongly oppose giving bodies corporate or strata the power to make decisions that affect property owners. This strips away the rights of ‘mum and dad’ owners to occupy or rent for short, medium or long term.

“A robust code of conduct and registration is essential for the property along with a rigorous accreditation/license for the owner and property manager.”

In a statement, ASTRA outlines what it does support…

It welcomes the commonsense approach of “NO caps”. 

Stating: “All evidence supports that caps don’t work. We support local laws with a 24/7 property manager. We support a registration system and a code of conduct.

“40 percent of STRA stays are non-leisure, for instance, people from the construction sector building bridges, roads, housing and so on. People and families visiting friends and relatives in hospitals and other medical facilities, essential workers for health and police—disaster accommodation for displaced families, corporate employees relocating for short to medium length project work and more…”

Accommodation Australia (National) peak industry body representing all sectors of tourism accommodation businesses in Australia.

AA, CEO Michael Johnson welcomes Brisbane council’s stance on short term rental accommodation.

He says there will always be a place for these sorts of accommodation offerings in the industry, but they are currently “unfettered and under-regulated”.

Therefore, he is happy to see recent movement towards control across all states and territories, and that the Federal Government has requested ministers look at STR regulations.

He pointed out the example of Western Australia, which now has a state-wide registration process, a 90-day cap beyond which a DA is needed as well as a financial incentive of $10,000 for Perth owners to revert to long-term rental. However, he says “enforcement will be the key” and short-stay platforms such as Airbnb must also take responsibility.

“Last thing we want to see, though, is a levy on all accommodation,” he emphasised.

Accommodation hotels do not contribute to the removal of housing stock from the long term rental market and should not be levied with a tax to address rising rental costs.

“We do not support a levy on any accommodation. We do not support it because it will simply be passed on to consumers, damaging tourism further, and because in the end it will not reduce STRA listings or return properties to the long-term rental market.

“We believe a more stringent multifaceted regulatory approach which includes caps and better enforcement of STRA registration, as well as data sharing by the platforms, will deliver the outcome the government and our industry need.”

Read more from Michael Johnson on this issue HERE

Airbnb’s response

In a statement Michael Crosby, Head of Public Policy for Airbnb, Australia and New Zealand said: “Given 40 percent of Aussie Airbnb hosts rely on the money they earn from hosting to make ends meet, it’s crucial that any permit system introduced by Brisbane City Council doesn’t limit the ability of residents to turn their primary asset into a vital income stream. 

“A permit system does not necessarily mean any short-term rental properties will be placed into the long-term market, given many properties used for short-term rentals are someone’s own home. The council’s own report also found Airbnb properties make up less than 1 percent of available housing stock. 

“We want to play a role in finding sensible, long-term solutions to help increase the housing supply and work with cities like Brisbane to balance the benefits of home sharing with the needs of communities.

“A report by Oxford Economics shows in the 12 months to March, 2023, Airbnb guests spent nearly $700 million in the Brisbane region, supporting over 4000 jobs across industries such as tourism, hospitality and retail. 

“The council’s report acknowledges short-term rentals play a vital role in providing flexible accommodation options, during major events such as NRL Magic Round or Brisbane Festival, the latter of which Airbnb is a proud partner.

“It’s critical we get the balance of rules and expectations right, because short-term rental accommodation will be vital to the success of the Brisbane Olympic Games in 2032. 

“We look forward to continuing working with Brisbane City Council on measures to help set appropriate expectations for hosts or guests.”