Australia’s NSW Parliament gives the nod to Airbnb

In the week after New York City required all short term rental organisations like Airbnb to provide lists of names of their renters (effectively curtailing their activities), Australia’s largest state has given the nod to the operation – although it offers less than total clarity on details. The general feeling is however that a reasonable compromise has been struck between polarised views.

See related report: The (New York) Empire strikes back: next move, Uber and Airbnb

The NSW Legislative Council on 14-Aug-2018 passed the Fair Trading Amendment (Short-Term Rental Accommodation) Bill 2018.

The Bill will be followed by the NSW Planning/Housing Minister’s changes to the State Environmental Planning Policy [SEPP].  The SEPP will allow short-term rental as exempt development in all residential premises.  The SEPP will not be subject to review by Parliament; it is a planning instrument that will override all previous Local Council zoning. That is, the policy is to be implemented by regulation rather than legislation, where every council can establish rules – within the broad guidelines set out in the Act.

As one parliamentarian succinctly noted, “At the centre of the short-term holiday letting debate is a conflict between two rights: the right to do whatever you wish with your property versus the right to quiet enjoyment of your property. There are two liberties, negative and positive—freedom to as opposed to freedom from.”

Introducing the Bill to the NSW Upper House, the government noted that “…in line with the other measures in the bill that will help address negative impacts of short‑term rentals, we are introducing an amendment to the strata scheme management laws. This amendment will allow the adoption of by-laws to prohibit the use of lots for short-term rental accommodation, but only when the lot is not the principal place of residence of the person who is letting out the lot. This approach will ensure that lot owners can let out their properties when they are on holidays or when they are present and are sharing their home. However, it will also allow owners corporations to prevent short-term letting which is carried on year round as the primary purpose of a property. That is, owners corporations will be able to decide that they do not want their strata schemes being used as hotels.”

Under the new legislation short-term letting will be capped at 180 days in Sydney, Wollongong and Newcastle, the state’s three largest cities. Strata corporations will be able to vote to ban Airbnb and other short-term rentals, but the restrictions will only apply to investors who own and let apartments in the building. Owner-occupiers and tenants will remain able to rent their properties as they please.

This has to be seen as a victory for Airbnb, which predictably has lobbied hard for a liberal approach.