Illawarra councils to decide on caps for short-term holiday letting in their communities

Illawarra councils will be able to decide if permitting short-term holiday letting (STHL) for the entire year is acceptable for their local communities. 

Guests and hosts of Airbnb-style letting will also be banned from short-term rentals for five years if they repeatedly disrupt neighbours, after the NSW Parliament passed the government’s plan for the STHL industry this week. 

When the host is not present, there will be a limit for hosts to rent out properties via STHL of 180 days in Greater Sydney, with 365 days allowed in all other areas of NSW.

Councils outside Greater Sydney will have the power to decrease the 365-day threshold to a cap of no lower than 180 days per year.

Minister for Better Regulation Matt Kean said NSW Fair Trading and industry stakeholders were developing a new Code of Conduct to manage noise levels and disruptive behaviour.

The mandatory code will come into force next year, and will apply to online accommodation platforms, letting agents, hosts and guests across the state.

Under the new “two strikes and you’re out” policy, hosts or guests who commit two serious breaches of the code within two years will be banned for five years, and be listed on an exclusion register.

REGULATION: Anthony Houghton (inset) and partner let out suites at their property, Mt Hay Retreat at Berry, year-round via platforms such as Airbnb. Pictures: Supplied

REGULATION: Anthony Houghton (inset) and partner let out suites at their property, Mt Hay Retreat at Berry, year-round via platforms such as Airbnb. Pictures: Supplied

Banned users would be included on the register to prevent the ability to “platform shop”.

If complaints refer to a specific property, the host could still be able to keep letting other properties.

Amendments to the Strata Schemes Management Act are also being made so owners’ corporations can pass by-laws to ban short-term letting in their block, if the host is not present, and they get a 75 per cent majority vote.

Anthony Houghton and partner let out suites at their property, Mt Hay Retreat at Berry, year-round via platforms such as Airbnb. 

He felt the changes are largely positive, and said it was now up to local councils to decide what cap was required. 

Mr Houghton said he would like to see the 365-day threshold remain in his area.

“If someone has bought a property and wants to let it out 365 days a year, they could take that ability away from them, which I don’t think is right,” he said. 

Eacham Curry.

Eacham Curry.

HomeAway (formerly Stayz) director of corporate and government affairs Eacham Curry said short-term rental accommodation is an important driver of economic growth and jobs for the Illawarra. 

HomeAway currently lists 187 properties in the Illawarra region and has 4185 across the NSW South Coast.

“Short-term rental accommodation ensures that destinations like Wollongong and the South Coast have the capacity to meet tourist demand during peak holiday season,” he said. 

“HomeAway wants to partner with local governments across the Illawarra to ensure that short-term rentals remain an integral part of the tourism accommodation mix for the region.

“Following the passage of the legislation, HomeAway will be asking local governments to grasp the sector’s opportunity and refrain from setting restrictive night limits.”

The legislation will be reviewed after 12 months.

Local Government NSW says it is disappointed the NSW Government didn’t set stronger foundations for a short-term holiday rental market that meets the needs of all: owners, visitors, adjoining residents and local communities.

LGNSW president Linda Scott said the final legislation fell short on delivering a robust regulatory system, with one of the greatest disappointments the government’s failure to outline a clear path forward for registration and enforcement for short-term rental accommodation.

“A simple registration system for all short-term rental properties will allow data to be collected on the growth and supply of this market,” Cr Scott said. “This data could then be used to monitor and evaluate the costs and benefits over time, as well as assist with enforcement of the yet-to-be-developed Code of Conduct.

“We welcome the fact that councils in regional NSW have some say on the caps, although we maintain that to truly customise the system to individual areas all local councils should be able to reflect their community’s wishes by determining all caps.”