Confused About Airbnb? So Is the NSW State Government
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Confused about Airbnb? So is the NSW state government Airbnb challenges the figures on whole home lets but is reluctant to open its books to detailed scrutiny, citing privacy issues. Ryan Stuart by Jimmy Thomson The NSW government's announcement that it planned to "crackdown" on short-term holiday letting – as epitomised by Airbnb, the biggest but not the only player – left many observers confused. Why? Because the mooted crackdown could in fact have been the almost total removal of existing controls on short-term holiday lets (STHLs) in what were intended to be residential-only premises. But now the NSW state government has again thrown the whole issue into disarray – by cancelling, at the last minute, its planned announcement on Tuesday afternoon about the future of Airbnb in NSW. Speculation is now rife that the Liberals just weren't satisfied by the softly-softly approach being recommended by Cabinet, and wanted more meaningful action – just in case the controversy over Airbnb spilled over to become an embarrassing election issue. In a nutshell, the smart money was on the NSW state government deciding that anyone who wants to let their home, their investment properties or rooms in their house to tourists for periods as short as one night could do so, regardless of whether their apartment block or local area is zoned residential-only. In apartment blocks it was thought it would rule that the unit must be registered with the owners corporation as a holiday let. Further, there would be a "two strikes" code of conduct on party houses that would disqualify problem properties and "hosts" from short-term letting. However, there is a question over whether these regulations are necessary – unless it is purely to bow to the new "gods" of the so-called sharing economy. They are certainly more of a loosening up than a crackdown (apart from party flats and houses, which are a tiny part of the overall picture). Many of the areas where holiday letting is most prevalent already have planning controls that were put in place to protect permanent residents and limit non- residential lets. City of Sydney development approvals for apartment blocks, for instance, say units must not be let for less than 90 days. Those limits are about to be swept away, although it will make little difference as, of late, councils have been very reluctant to enforce them. Not just rooms Any lingering unease about letting Airbnb into Australian homes stems from a disconnect between what it says it is and what it does. The Airbnb sales pitch all over the media is that it is all about individuals letting rooms in their homes to visitors from overseas and interstate. It's an emotional argument that's been hard to ignore, with a parade of old, lonely people glad of the additional income and companionship that letting a room in their home brings. Even the most virulent anti-Airbnb campaigner would be hard-pressed to deny these people their enhanced home comforts. But organisations like Inside Airbnb (which campaigns against the global letting agency) and, at the opposite end of the scale, Madecomfy (which services homes for STH hosts) tell a very different story. Based on Airbnb's own online listings, Inside Airbnb claims about 60 per cent of its business in Sydney is entire homes (mostly apartments and predominantly in a small area in the eastern suburbs and northern beaches) plus pockets of traditional holiday areas like Byron Bay and Port Macquarie. Airbnb challenges the figures but is reluctant to open its books to detailed scrutiny, citing privacy issues. The online letting agency has also challenged figures provided in a study by Sydney University that claimed its activities had taken 6000 homes out of the Sydney rental market. Again, efforts to get Airbnb's "true" figures have, according to the academics behind the study, been stymied by privacy concerns cited by the $30 billion holiday rental global power house. "Whole home" skew Meanwhile as an indication of how successful the "whole home" market is, Madecomfy (which manages the properties – from handing over the keys to changing the sheets) recently said property investors should switch to holiday rentals instead of long-term tenancies if they wanted to maximise their profits. With claims versus counter-claims, horror stories of trashed apartments versus fairytales of Airbnb millionaires and reports that the centres of some European cities have been "cleansed" of all but the wealthiest locals, it has been a very confused picture. There are also claims that NSW has benefited greatly from additional tourist traffic thanks to non-hotel accommodation. That said, you have to ask how the STHL lobby's claims of such a massive boost to tourism tallies with its insistence that it has had no impact on local housing. Tourists aren't all renting rooms from lonely old ladies, that's for sure. Nevertheless, our MPs will vote to ease the restrictions on holiday letting because, according to Airbnb, most people in NSW like the idea and because, for the vast majority of the members, it has zero impact on their constituents. Add in the recent threats that voters could turn against any MPs who voted against STHLs, backed by an impressively organised campaign of pre-written submissions to the recent review into STHLs, and you can see why MPs might let the unshackling of holiday lets through on the nod. Most active parliamentary seats The easiest way to understand this is to look at the map of Sydney on InsideAirbnb.com, specifically the parliamentary seats where Airbnb is most active – Sydney, Vaucluse, Manly, North Shore and Coogee. In Manly there are 1,600 listings, 74 per cent of which are whole homes. In Sydney city there are 8,000 listings, 63 per cent of which are entire flats or terraced houses. In Randwick there are 3000 listings, 58 per cent of which are entire apartments or houses. In the area around Bondi Beach there are 5,200 listings, more than 65 per cent of which are whole homes. Airbnb will dispute these figures, claiming that the "web-scraping" process employed to identify these properties doesn't take into account, for example, that many of these whole homes are just people renting their flats while they go travelling themselves (no doubt able to do so because of all the cash they are making on Airbnb). Inside Airbnb demurs – but that's another story. The most likely reason why our MPs would ignore the anger of apartment resident- owners who thought they were buying into residential premises and tenants who are being forced out by rents inflated by the STHL market is very simple. Only a tiny minority of MPs represent areas affected by the influx of holiday lets. Even then, for instance, James Griffin, the Liberal member for Manly is in a safe seat and it would take a 10 per cent swing to unseat Liberal member Felicity Wilson from the North Shore. Minister for Local Government Gabrielle Upton is rock-solid in her seat of Vaucluse although Bruce Notley-Smith might have a few nerves at the thought of a grass-roots campaign – genuine or otherwise – in Coogee. It has to be said that in all of these cases, the local voters might love the idea of making more money from holiday lets. It is understood that several other MP's voiced concerns about the relaxed rules, including Liberals Damien Tudehope, Melanie Gibbons, John Sidoti and Eleni Petinos. No party backing Finally, in the area where most people live in apartments and will therefore be most profoundly affected by neighbours switching from tenanted units to holiday rentals, there is no party backing for Alex Greenwich. The independent MP for Sydney, who has campaigned ferociously for apartment owners to be allowed to decide whether or not to permit STHLs in their buildings, hasn't enjoyed the levels of support he received when he led the same-sex marriage campaign. Regardless of what laws parliament passes, the apartment blocks that really, really don't want holiday rentals will find ways around them. Just as MPs in the notorious Bridgeport building near Macquarie St defied planning laws so that they could let their units to tourists while they were back in their constituencies, the smart, powerful and rich owners of apartments in the best buildings will find ways to make holiday lets so difficult and uneconomical that potential hosts will give up and go selsewhere. But that's how city living works in the modern age. As Airbnb and Uber have shown, if enough people openly defy the law, then the law gets changed. Jimmy Thomson edits the flat-chat.com.au apartment living advice website and is a long-time critic of Airbnb. AFR Contributor .