After more than two years of delay and political indecision, the NSW government finally laid out its plan to regulate Airbnb today in what has been described as “a party-room compromise“.
Airbnb’s global head of policy, Chris Lehane welcomed the regulations, as “fair and innovative” at a press conference in the Domain today. Airbnb’s country manager for Australia, Sam McDonagh described the ruling as a “watershed moment for our community and for travellers from around the world who want local, authentic and unique experiences”.
However, on the face of it, Sydney apartment dwellers supplementing their income on the home-sharing app potentially stand to lose significant income, as a result of the new regulations.
Under the new provisions, Airbnb hosts in the greater Sydney area will only be allowed to rent out their homes for 180 nights a year.
Dwellings in regional or rural areas are not subject to the 180 day limit, however, local councils can still choose to impose their own caps.
The regulations also give strata corporations the power to ban Airbnb rentals in their buildings with a 75 per cent majority vote. They are also empowered to pass by-laws preventing short-term rentals in apartments let by owners not living in the dwelling.
The NSW government will also develop a mandatory code of conduct for online accommodation platforms to address issues like noise levels and unruly tenants.
Hosts and guests face a ban of five years from the platform for two or more serious breaches with fines of up to $1.1 million for businesses, and $200,000 for individuals.
Airbnb’s Chris Lehane, pictured above, also said it would work with hosts to review potentially unfair decisions, though he did not go into detail about the formal routes for appeal.
Christopher McManamon, an owner-occupier from Elizabeth Bay told Which-50 that for individuals, the new penalties are a “liability to be wary of”.
“It is a prospect I take very seriously,” he said. “In saying that, it is fair to have some accountability. Often that is achieved through penalties. I take that very seriously, but it might make me reconsider hosting.”
He hopes that a mechanism to review unfair decisions has the potential to balance out those risks.
“I am hoping that body that has a role in making the decisions are properly informed, with balanced views, and have various stakeholders that are involved with a transparent decision making process,” he said.
McManamon first began letting his property on Airbnb about three years ago after he and his partner moved from Melbourne to Sydney to be closer to family. He said the platform actually stopped them from going backwards financially.
“My partner’s income fully covered our mortgage and a bit of our strata fees while I setup a consultancy. But in every other sense we were going backwards,” he said. “So Airbnb was the income that stopped us from going backwards.”
Extrapolating their potential losses over a longer period of time, without Airbnb McManamon says they would have have had to sell their place and move out.
“It helped us to survive and not go backwards financially,” he said.
McManamon said the new regulations “seem positive” but he couldn’t say whether the new regulations would impact his earning ability, and that he would first need to look at the finer details.
With regards to the way the new provisions empower stratas, he said it is possible it could have “unforeseen consequences”.
The not-for-profit superannuation worker said it is really important to maintain a “fair and balanced but weighted liberty” for people who own in strata incorporated apartment blocks.
“We are all responsive to federal, state and council rules,” he says. “Strata adds another layer that is much more difficult to navigate, and the people who are executing it are good people with the best of intentions.
“I am on two stratas, actually, but it is not as transparent, and it isn’t accountable. So to put more power in that environment, to me, would be something you would have to do very carefully.”
McManamon says people need to have “fair liberty” over the way they use their homes respectfully around their neighbours.
“The parallel I draw, is if you’re in a detached house, you still have to respect your neighbours and abide by the law,” he says. “But in a strata it adds another layer of people who can add new laws on top of what already exists. That could have much wider-reaching effects. Because if strata properties become less attractive for that reason, then valuations, saleability and people wanting to live in them, it could have unintended consequences.”
Sydney is different
NSW is one of the last states in the country to regulate Airbnb use. South Australia recently passed regulations that have no caps on how many days a year hosts are allowed to let their homes, along with Tasmania.
Airbnb’s McDonagh told Which-50 that “Sydney is different”.
“Sydney is a top-10 city globally for Airbnb, so what the government has come up with in terms of the 180-day cap within the city makes sense. A big part of that, is if you think about weekends, public holidays and school holidays, that broadly fits into that 180 days, and it fits into the philosophy that we have.
“Of course we have hosts, many of them hotels and other traditional operators sharing their properties for more than 180 days, and many of those already have approval to do that and act in a commercial sense. To the extent we will see more of that happening, we will certainly support it.”