‘Dob in B&B breachers’ plan could boost housing

We are barely into spring but the annual summer short-term rentals spin-fest, postponed for a couple of years by Covid-19, is cranking up already.

On one side you have Brisbane City Council hiking rates by 50 per cent on whole homes, many of them apartments, let out to tourists for more than 60 nights a year.

As ABC radio reported last week, Brisbane council is actively encouraging residents to dob in neighbours who are letting their homes too often, and are therefore liable for higher rates.

Meanwhile, Randwick City councillors want to do something similar in Sydney. The Sydney Morning Herald reports they voted to investigate raising rates “or other appropriate responses” for residential homes used for holiday rentals.

Their concern is that rents in the Randwick area have risen 25 per cent in the past year, at a time when more residential properties were converted to holiday lets.

But this is not one-way traffic. Tourist operators and property investors in Byron Bay are trying to head off moves by Byron Shire council to limit holiday lets there to a maximum of 90 nights a year.

A “coalition of local ratepayers, families and business owners” has sent out emails saying the cap would “crush local businesses and destroy jobs without fulling its stated purpose, increasing the rental pool.”

Exactly what brand of crystal ball they are consulting for this dire prediction is not revealed – but the opinions of a couple of “travel industry professionals” have to be taken with a pinch of salt.

The problem for the Byron council is that the workers who keep the tourist wheels turning can’t afford to live in the town. It’s bad enough for the baristas, waiters and yoga teachers on minimum wage – don’t even ask about the teachers, firies, cops and nurses. 

In many traditional holiday destinations, as has been proven by a number of academic studies, short-term rentals price residential tenants out of the market. 

State governments seem content to let market forces determine the outcomes, but when a holiday rental apartment in an inner-city or seaside suburb can attract two to five times as much as a residential let, things are likely to get out of kilter.

Meanwhile, the Byron pro-holiday let group says council’s claims that the 90-day cap would return 1,500 homes to the permanent rental pool would be “impossible” as there are only 1,136 homes on the official NSW short term register in the Byron Bay area.

But that brings us back to Randwick where councillors, who’ve been told that under state laws they can’t have differential rates for holiday homes, say that many of the short-term lets there are not on the NSW’s “compulsory” holiday register anyway.

As an aside, is anyone checking the register? It was, after all, a central pillar of the NSW government’s holiday letting legislation. Maybe councils should be asking neighbours to dob in holiday let hosts who aren’t on the register.

OK, the big players like Airbnb and Stays won’t list a property in NSW unless it has a registration number. But what about the minor, boutique and specialist sites, and the return visitors who book up for the same properties year after year, or the short-term lets handled by local real estate agents?

Australian cities are rapidly getting left behind places in America and Europe where councils and governments have realised they should be putting local people ahead of carpet-bagging investors and overseas visitors.

To put all this in some kind of context, a limit of 90 days – which Byron Shire wants – is an entire summer peak season. Currently the limit is 180 nights, or six months, which also applies in Greater Sydney, including beach suburbs like Randwick.

Even in Sydney where strata schemes can elect to ban short-term lets, restrictions don’t apply to apartments that are the owners’ principal place of residence.

That means your neighbours can let their flat for six months a year while they go travelling. Ironically, this is a preferable arrangement as they’re really not taking property out of the housing stock.

What’s missing in all this to and fro is an honest appraisal of the benefits and drawbacks of short-term holiday lets. And let’s not forget that we are in the midst of both national debt and housing crises. No state government is going to turn its back on overseas tourist dollars any time soon.

For the record, Stayz characterises anti-holiday let moves as “knee-jerk reactions” and Airbnb pleads the case for families needing to rent out their homes to make ends meet (no mention of families who need somewhere to live as well as struggling to keep up with the cost of living).

But perhaps Brisbane has sown the seeds of a more equitable arrangement.  With state government blessing, councils could impose higher rates on holiday lets to calm the market and use the funds raised to subsidise rents, especially for essential service providers.

As we discuss in this week’s podcast, governments are loath to build anything that has the slightest whiff of social housing and, especially in these post-covid times, they are even more reluctant to do anything that might deter foreign tourists.

The NSW government is talking about build-to-rent and affordable housing (is there an election soon or something?) but how long will it take to build these places?

Again, as we discuss on the podcast, there is a tsunami of south-east Asian students heading this way. Can we expect, once more, to see overcrowded flats and girls having to agree to sex with landlords’ thugs just to get a bunk in an overcrowded bedroom?

It’s all very well to see out governments wringing their hands about affordable housing and homelessness and how supply chain issues are holding up building. They could put 50,000 homes or more back into the accommodation pool right now by putting a lid on holiday lets and a tax on empty homes.

A shorter, edited version of this column first appeared in the Australian Financial Review