Holiday rental provider Stayz has hit back at suggestions that caps on the number of days a home can be rented out in a year would lead to more long-term rental accommodation in tourist hot spots such as Kiama and the Shoalhaven as Kiama councillors call for more powers to regulate short-term rentals.
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The NSW government last week signalled it was looking to review policies for short-term holiday rentals, as the state continues to grapple with a rental crisis, with rents in many holiday destinations unaffordable for the retail, hospitality and essential workers the towns rely on.
In the Northern Rivers, Newcastle, Dubbo, the Bega Valley and Sydney properties can only be leased for 180 days a year and Victoria is considering an Airbnb tax of 7.5 per cent on short stay accommodation.
Byron bay Shire Council is introducing a 60-day cap in 2024.
Stayz director of corporate affairs, Eacham Curry said these measures would push more holiday rentals back into being privately used holiday homes, and not available for the long-term rental market.
"If the intention is to use night caps to try and drive people to turn their property over to long-term letting, that's unlikely to happen," he said.
"What's more likely to happen is it'll simply be removed from short-term letting, but it will remain a holiday home for the owner."
In practice, Mr Curry said, owners were more likely to sell the property if it was unviable to rent it out via platforms such as Stayz or Airbnb.
"What we have seen is that where restrictions are imposed ... in the current environment with increasing interest rates and economic pressures, what's more often happening is the owners of those properties are selling them."
Kiama Deputy Mayor Imogen Draisma said that anecdotally long-term rentals were being converted into short-term properties in her LGA.
"We have seen stories from locals, particularly over the COVID period, where people who've lived in long-term rentals for many years were told that they were going to be evicted at the end of their lease, and the purpose would be that [the property] becomes a short term rental accommodation."
The latest figures show that 5.46 per cent of all homes in Kiama are non-hosted holiday rentals, 546 dwellings in total.
Mr Curry said that many of those dwellings would not contribute to reducing rents in Kiama - one of the most unaffordable suburbs in the Illawarra - due to being at the higher end of the market.
"The problem is actually that there's not enough [housing] at the lower level, so there's a distinct lack of affordable housing, and the properties that we're talking about are frequently not in the areas where the housing need is greatest."
With strong opposition in Kiama to new housing developments on former farmland, Ms Draisma said the council was looking to increase density in existing areas, however current planning laws meant housing designed for short-term accommodation was being submitted as residential developments.
Ms Draisma cited the example of a multistorey development facing towards Loves Bay in Kiama Heights, which councillors discovered was being built for the purposes of short-term holiday accommodation.
"There was a conflict between what was provided to us as a DA for residential development, and the intended purpose of that build to provide short term rental accommodation."
Ms Draisma said in these instances, properties should be dealt with under commercial zoning laws, similar to motel or hotel-style accommodation, which would allow council to manage the additional impacts that come with short-term holiday letting.
"When you've got those large-scale operations, where there's a third party who is actually facilitating multiple properties on behalf of one owner, then it gets a bit more complex because it isn't for the purposes of providing residential property, it's a business venture."
