Yesterday’s Australian Financial Review asked a question we have been posing for a long time: how much money are Airbnb and Expedia/(Stayz) throwing at winning legislative access to our homes?
In our Response to the NSW Parliament’s ‘Options Paper’ on short-term rentals we named Airbnb’s most prolific operators around Sydney and Byron Bay; they advertise and control literally hundreds and hundreds of homes. Soon after came Media reports of Airbnb’s “blunt message to NSW legislators”, that the company’s business model is here to stay. Consider: Sydney’s top landlords made between $2 and $5.3 million in the year to October 2017. Byron’s top ‘Mum&Dad’ operator earned $3.7 million.
In the financial quarter that ended in September, Airbnb itself “pulled in about US$1 billion, up from US$500 million in the same period last year”.
In response to University of Sydney research, on 20 January 2017 City of Sydney Councillor Philip Thalis wrote: “The loss of housing for rent posed by unregulated sub markets like Airbnb are a big issue. We don’t need to further inflame housing affordability.”
Sydney Lord Mayor Clover Moore gave the issue of short-term rentals priority when, on 05 March 2008, as State MP for the seat of Sydney she asked Parliament:
Given the 2007 Land and Environment Court determination that there is a fundamental incompatibility between a mix of residential and serviced apartments that share the same floor and access points due to the difference in behaviour, living and activity patterns between short-term and long-term occupants:
What consideration has the NSW Government given to the following measures to prevent overcrowding and short-term occupancy in residential apartment blocks:
1. Restricting the number of adults on residential tenancy agreements to two adults per bedroom, with the maximum number of adults allowed equal to two times the number of bedrooms?
2. Banning residential tenancy sub-leases?
3. Setting minimum residential tenancy leases to three months?
What other measures are being considered by the NSW Government to reduce short-term/serviced apartment occupants letting apartments in residential blocks?
The answer provided by the Minister for Fair Trading was clear and concise:
The Office of Fair Trading advises me that:
(a) to (c) The Residential Tenancies Act 1987 is currently being reviewed. This review is examining many matters, including the issues around short and long term accommodation and the duration of leases.
Changes have already been made to the Strata Schemes Management Regulation 2005. These changes amended the model by-laws for strata schemes so that owners must comply with all relevant laws, including planning requirements. This means that owners or occupiers must ensure that a strata residence or apartment is not used for any purpose that is prohibited by law. In addition, a residence or apartment cannot be occupied by more persons than is allowed by law. Limits on occupancy and usage of dwellings are not regulated under Fair Trading legislation, but fall under the relevant planning laws. Real estate agents are generally responsible for arranging leases of strata dwellings or apartments, and are licensed under the Property, Stock and Business Agents Act 2002. The Office of Fair Trading would examine any improper or questionable actions undertaken by a real estate agent, including actions that would be in breach of the consumer protection provisions of that Act or the strata or tenancy legislation. Penalties for breaching the legislation include a range of disciplinary actions from a reprimand to cancellation of a licence and disqualification from involvement in a real estate business. (Our emphasis.) Has any Agent been disqualified?
Also contained in our Neighbours Not Strangers ‘Response’ to Parliament’s ‘Option Paper’ was a call to cancel and/or disqualify those real estate businesses involved in channelling homes away from residents for short-term tourist/visitor rentals and to review Airbnb and others’ licenses to operate in NSW, as per Transport for London’s recent withdrawal of Uber’s license.
The Council for the City of Sydney has now echoed the Parliamentary Coure Inquiry’s recommendation - that short-term tourist/visitor rentals be deemed ‘exempt or complying development’, with the activity confined to residential dwellings only. A ‘tag’ to distinguish between those tourists/visitors staying in licensed Hotels etc and those staying in residential housing is yet to be determined.
In a meeting with City of Sydney representatives this week it was confirmed that the proposal to grant ‘exempt development’ would effectively give short-term operators permission to Airbnb class 1(a) and class 2 dwellings without triggering a ‘change of use’. We stated that this will very effectively circumvent Building Codes of Australia/National Construction Code regulations, Commonwealth Disability Access Legislation, Fire and Rescue NSW requirements, (the Food Regulation Act, Internal Signage Occupancy Schedule, Pool Safety Regulations, Land Tax, ABN Registration, GST, the need for employees to be paid under the Hospitality Industry (General) Award,) and indeed the City of Sydney’s own Visitor & Tourist Accommodation Development Control Plan.
We pointed out to Council’s representatives that Airbnb alone, with some 6,579 listings in the Sydney Local Government Area, makes a mockery of the City’s Affordable Housing targets plus their Affordable Housing Levy. Those present acknowledged this.
The time allocated did not permit discussion of NSW Land and Environment Court judgments on mixing short-term tourist/visitor rentals with permanent residents, where Council has a 100% success rate: combining the two is “fundamentally incompatible”.
The City of Sydney Council’s Woolcott Research survey contacted 1,000 people. Among them they found some 540 individuals who say they are in favour of Airbnb-type rentals. In turn, Council has based its Response to Parliament on the preferences of these 540 individuals.
A follow up letter to Lord Mayor Clover Moore asked Council to please consider that the Neighbours Not Strangers group alone (we are members of an alliance of other Residents Action Groups) has more than 900 signatories, who range from Tweed in the north to Albury in the south. All are emphatic: the need to uphold the rights of residents and land title holders is paramount; and so too the need to acknowledge the severe, damaging impacts of the explosion of short-term letting in unregulated premises.
We have pointed out, both to Parliament and the City’s Lord Mayor, that the City of Sydney continues to issue Determination of Development Applications (DAs) with ‘Restrictions on Residential Development’ that specifically prohibit short-term rentals “and the like”. What does this say, not only for current residents/rate payers/property owners, but also for those who are contemplating purchasing property in the City of Sydney and are basing their decisions on the DAs Council is issuing on the residential properties under consideration?
We ask: Would it be fair to say that our life savings have gone into investing in and purchasing homes in buildings or suburbs zoned residential, and now all that is to be of no consequence? Consider too those who are trying to operate approved Bed & Breakfast, and other types of accommodation. Airbnb et al trump us?
Our rights as residents, and our property rights and the titles on the dwellings we own are to be set aside. Effectively, it would appear that these rights will be removed and we have no say in this. It was also made plain to us by the City of Sydney’s representatives that compensation of any kind "is off the table". Plus, no properties, no ‘areas’ are being designated for those whose desire it is to live in a residential environment.
It is our opinion that the City's recommendations do not acknowledge our National Construction Codes, our Planning System, NSW case law and other areas of Federal/Commonwealth/State/ Local Government legislation. One will be forced to live in unregulated hotels and transit zones.
The City of Sydney, in its response to Parliament, appears to have ignored that which is occurring the world over – plus Airbnb’s claim that we are their “most penetrated market in the world” – and is bending to the wishes of those who reject residents as suitable tenants and in lieu price gouge short-term tourists/visitors. Experience clearly shows that such individuals have absolutely no respect for their neighbours’ rights.
We are talking about our homes and our communities, so this issue is critical to all who have or currently are being forced to endure short-term rentals. It will also effect those whose neighbours suddenly convert a neighbouring property into a short-term rental.
Meanwhile, international Media continues to report on Airbnb’s links to Russian Money Laundering Operations, Drug Lords using Airbnb for Hideouts, and a Chinese version of Airbnb heading our way.
If you have stayed with us and read this text through to its conclusion, thank you.