Sydney: Short-stay rentals flouting registration rules

The City of Sydney plans to advocate for significant reforms in the short-term rentals sector due to concerns that many properties listed on platforms like Airbnb are operating without proper registrations. Research commissioned by the city revealed that while New South Wales government data indicated around 2,500 active properties in Sydney’s local government area (LGA) last year, data from the US-based rental insights company AirDNA showed approximately 5,500 active properties.

The report, prepared by urban planning consultancy Mecone, highlighted that despite state laws requiring accurate registration information for bookings, some people are bypassing these requirements. This research follows Brisbane’s announcement by Lord Mayor Adrian Schrinner that permits will soon be required for Airbnb properties in the city. Similarly, Victoria announced a 7.5% levy on platforms like Airbnb and Stayz to raise $70 million annually for affordable housing.

Sydney Lord Mayor Clover Moore is advocating for stronger regulation, including a 90-day annual cap and up to a 10% levy on all bookings, with the revenue directed toward social and affordable housing. Moore emphasized the need for a balanced approach that differentiates between occasional short-term rentals and commercial tourist accommodations to avoid negatively impacting rental housing supply. She supports a regulatory framework that balances the sharing economy’s benefits with housing affordability, safety, and amenity concerns.

The research suggests that a state-wide levy could generate significant revenue to address critical housing needs and found the current 180-day cap ineffective in preventing the conversion of long-term rentals to short-term listings. Currently, only Byron Shire can enforce a stricter 60-day annual limit on short-term rentals, sanctioned by the state’s Independent Planning Commission last year.

The report also noted that policy enforcement is fragmented and inadequate to counterbalance the financial benefits of non-compliance. Since 2021, the state government requires all short-term rentals to be registered. Planning officials have discussed non-compliance concerns with the council, with referrals to the NSW Fair Trading Commissioner for further investigation if necessary. The department is committed to enhancing compliance enforcement and is reviewing the sector, with findings expected in the coming months, aiming to encourage long-term rental use of properties.

Airbnb’s Head of Public Policy in Australia, Michael Crosby, challenged the Sydney council’s figures, stating that the registration scheme should provide accurate data on listings. He criticized the use of third-party scraped data and argued that night caps have not improved housing costs or supply. Mitch Price, CEO of the Australian and New Zealand Short Term Rental Association, also expressed concerns about the AirDNA data, arguing that caps would not be effective and that flawed data could lead to misguided policies.

According to the government, there are currently 50,079 registered short-term rental properties across the state, with nearly 32,000 non-hosted, allowing renters to occupy the entire property. Official data shows an increase of almost 1,000 registered properties between June 2023 and June 2024, with over 3,000 in the Sydney LGA.

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