The NSW Government encourages short-term holiday lettings because they broaden the economic benefits of tourism in NSW.

It is looking at options on how best to provide a legal framework for the providers to work within.

The regulatory framework that it puts into place will need to encompass a diversity of providers: online booking agents such as Airbnb and Stayz, traditional holiday accommodation providers; and forms of accommodation such as rooms in a home, an empty apartment, bed and breakfast places, and so forth.

The regulatory framework will give Local Councils new planning guidelines for administering short-term holiday lettings.

The NSW Government response to the Parliamentary Inquiry

On 19 April 2017, the NSW Government issued its formal Response to the final report of the Parliamentary Inquiry into the Adequacy of Regulation of Short Term Holiday Letting.

This is the introduction:

Short-term holiday letting has been carried out in coastal and other tourist destinations in NSW for many years, often without planning approvals or incident.

The emergence of online booking services and the development of the sharing economy has seen short-term holiday letting expand significantly in Australia and overseas. Internet platforms have generated new marketplaces for short-term holiday letting, benefitting consumers and providers by lowering transaction and accommodation costs, and providing opportunities to earn income from unused assets; and broadening the economic benefits of tourism.

The NSW Government welcomes the final report into the Adequacy of Regulation of Short Term Holiday Letting, and accepts many of its recommendations. The Government will be releasing a consultation paper on potential regulatory approaches to short term holiday letting in the near future.

The NSW Government’s responses to the recommendations

The Response proceeds to detail the NSW Government’s responses to each of the 12 recommendations made in the final report of the Inquiry. This is a summary:

Town Planning (Recommendations 1, 2, 3, 4, 8 & 9)

The NSW Government will consider putting into place planning controls which are to be administered by Local Councils for these situations:

  • Short-term letting of rooms in any property where the landlord or host is present be permitted as exempt development.
  • Short-term letting of a principal place of residence be permitted as exempt development.
  • Short-term letting of empty properties be permitted as exempt development where the development does not exceed applicable development thresholds, and complying development where it does.

Note: ‘exempt development’ means the use of a property which does not require development consent from the Local Council; ‘complying development’ means the use of a property which requires development consent, but where the consent is ‘streamlined’ if it complies with the guidelines.

Local Councils will be responsible for communicating to land owners their rights and obligations once the changes which will apply to short-term rental accommodation are outlined by the NSW Government to the councils and to the community.

Compliance (Recommendation 7)

The NSW Government will consider whether the existing ‘strong compliance system’ under the Planning Law as used by councils is adequate, and the effectiveness of the industry code of conduct in terms of monitoring and responding to complaints and compliance issues.

Specifically, it will consider if the existing system and code need to be supplemented by a compliance system for short-term rental accommodation which considers:

(a) The use of investigative powers under the Planning Law

(b) Streamlined development assessment for complying development

(c) The Holiday and Short-Term Rental Code of Conduct

(d) ‘party house’ provisions

Traditional accommodation operators (Recommendations 5 & 6)

The NSW Government will be looking to ensure that the principles for regulating traditional accommodation operators and short-term holiday letting providers are: aligned, fit for purpose and focused on consumer safety and amenity.

The Holiday and Short-Term Rental Code of Conduct will remain industry-led and voluntary, and be overseen and enforced by the industry. The NSW government will support the implementation of a national code when and where possible.

Strata Schemes (Recommendations 10 & 11)

The NSW Government will consider amendments to the strata regulations to give owners more powers to manage and respond to adverse behaviour resulting from short-term lettings in their buildings.

Note: It is not proposed to allow owners corporations to ban or restrict the use of apartments for short-term letting.

The on-going impacts of short-term letting in strata schemes will be assessed as part of the review of the Strata Schemes Management Act 2015, which will take place after 5 years have passed since the Act came into effect (i.e. after 30 November 2021).

Economic contribution (Recommendation 12)

The NSW Government will analyse the National and International Visitor Survey data and other available data to help consider the economic contribution of short-term letting and its impact on housing affordability and community viability.

Comments

The NSW is keeping all options on the table, but is committed to permitting short-term lettings in houses and strata apartments, subject to appropriate planning controls which are to be the legal framework to be enforced by Local Councils.

Interested parties should keep an eye out and make contributions when the NSW Government issues its consultation paper.

For more information on the legal aspects of short-term letting, click upon my previous articles:

The law is catching up with short stay - Airbnb style accommodation in Australia

There is welcome clarification to the laws on short-term letting for Airbnb hosts in Australia

How Airbnb is empowering boutique hotels and B&Bs to build their businesses