Penetration of Residential Housing - Does a $10,000 Dinner Deliver $ Millions?

In a landmark 2013 NSW Land and Environment Court (LEC) case law judgement, Justice Rachel Pepper found that the action of landlords in letting residential housing as short-term holiday rentals “offends and undermines the planning regime of the…(Local Government Area) LGA and ultimately of the State”. Gosford Council’s failure to enforce residential zoning left the applicants, John and Rosemary Dobrohotoff, to seek relief from the Court over their neighbour Rhonda Bennic’s use of a residential dwelling as a Stayz holiday rental. The respondent readily agreed that she could not guarantee compliance with the House Rules or the Code of Conduct. Bennic stated, "I have no control over any other person do I really, in realism [sic], I can only control my own conduct I can't control other - other people's conduct”. Justice Pepper declared: “…the adverse impact on the amenity and wellbeing of the Dobrohotoffs has been, as the evidence overwhelmingly demonstrates, severe”.

Gosford Council’s failure to resolve the issue forced the Dobrohotoffs to bring the matter before the LEC. Justice Rachel Pepper: “It appears that the council has been content for the Court to resolve the matter. On any view, this is unsatisfactory and amounts to an effective abrogation by the council of its fundamental duties and responsibilities. These duties include, amongst other things, to manage development and coordinate the orderly and economic use of land within the area under its control. By leaving it to the Court to determine this important issue, the council, by its inaction, has, in my opinion, failed to fulfil its core functions and has failed its constituents.” Following the Dobrohotoff v Bennic judgement,

Gosford Council, perhaps in a sign of clear contempt for the Court's ruling, subsequently changed its Local Environment Plan to permit the short-term rental of all housing.

During a 2016 NSW Parliamentary Inquiry into the Adequacy of Legislation of short-term holiday letting in NSW, there was no review of the many LEC case law judgments on this issue. Instead, in the corridors of Parliament House, advice was given to Expedia and HIRA/ASTRA representatives to push NSW Planning to amend the State Environmental Planning Policy [SEPP], which would automatically trigger complete access to all housing for all agents and online booking platforms.

December 2017, Senior Customer Service Officer - Real Estate & Property Division NSW Fair Trading - contacts Neighbours Not Strangers on behalf of Minister Matthew Kean, requesting “proof of collusion” between Airbnb and Expedia/Stayz and Agents. The Department was provided by multiple examples of Agents from across the State, the worst offender in terms of 'collusion' and numbers being the State Government’s DestinationNSW.

DestinationNSW ‘officially’ partnered with Expedia/Stayz in 2017/2018.

In 2018/19, Airbnb registered as a Third Party Campaigner for the NSW State Elections. Their total spend of $250K went predominantly to advertising. A mere pittance, given that in 2015 Airbnb reportedly spent US$8 million to defeat legislation in San Francisco.

Having failed to disclose links with DestinationNSW during the 2016 Parliamentary Inquiry, in May of this year, Expedia/Stayz threw in $10,000 to earn the title of ‘Elite Sponsor’ of Local Government NSW’s 'Destination and Visitor Economy Conference' in Port Macquarie. Co-Sponsors included DestinationNSW and Tourism Australia. On the opening night of the conference, Expedia/Stayz hosted dinner for all Local Government attendees. Well watered and fed, NSW Local Governments have since happily ‘abrogated their fundamental duties and responsibilities’, in terms of the “illegal use” of residential property by Stayz and Airbnb.

According to Dun & Bradstreet, Airbnb Australia’s revenue, Fiscal Year End December 2020, was $6.84 million. Stayz revenue, Fiscal Year End December 2020 was $24.18 million. Should one ask if Airbnb is channelling $ millions earned in Australia out to its low-tax Irish haven?

July 2021, NSW Planning Minister Rob Stokes uses ministerial discretion to alter the SEPP, allowing Expedia/Stayz and Airbnb, plus an unlimited number of Agents and other online booking platforms, unfettered access to housing.

Except for the Byron Shire, as of 01 November 2021, all short-term rental properties in NSW must be registered on the Department of Planning’s website. For as little as $65 per property, Federal Building Codes and Disability Access Legislation, along with compliance with Residential Zoning, can all be circumvented.

Raw data provided by Murray Cox, Inside Airbnb, showed that for the City of Sydney there was relatively low compliance, where the ‘host’ had entered at least something as a license number. If platforms, such as Airbnb/Stayz, are mandated under legislation to remove unregistered listings, greater than 50% of City of Sydney's Airbnb listings were unregistered (06/11/21).

As has been the case elsewhere when such a registration ‘fix’ is implemented by legislators, some Sydney listings were showing the same license number, with in some cases up to 15 properties displaying the same number. The focus though is very much on the number of unregistered or those claiming an exemption.

NSW, we have a problem! If landlords or tenants subletting are able to self-select that they are ‘exempt’, without any verification whatsoever, how are public servants able to know the location and identity of those claiming an exemption?

Another example: Inside Airbnb has noted that the Tasmanian registration scheme currently has 57.4%, or 2,284 of their 3,978 entire home listings, claiming an exemption. And 1,009 of those 2,284 homes were part of a 'property portfolio'.

In London, entire home Airbnb listings have increased 571% in five years. New York City is poised to adopt a platform accountability model for regulating short-term rentals. Airbnb/Stayz and others can be fined $1,500 per transaction for collecting fees from short-term rental listings that are not registered with the city.

It is possible for NSW Councils to take short-term rental agents to the NSW Land and Environment Court and obtain Orders/Penal Notice banning the listing and use of housing for commercial purposes - see these Orders which snagged NSW MPs. Having been wined and dined by Stayz, and with so many Airbnb ‘friends’ in decision-making positions, will anyone anywhere in a Local NSW Council act?

As of November the award for the ‘most penetrated’ NSW Local Government Area, in terms of Airbnb listings, goes to the Council whose staffer suggested that platforms push NSW Planning to alter the SEPP. Shoalhaven residents, we are so very, very sorry for your serious loss of housing and loss of neighbourhood amenity.