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Politicians and the myth of the vomiting bridesmaid

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Airbnb and the battle for your blocks: Part 3

Last week Jimmy Thomson looked at the appeal of “free money” and the push to allow holiday rentals to have greater access to apartment blocks with little concern for the potential disruption to communities. This week he examines why some MPs find the idea so attractive when there seems to be, politically, nothing but downside with huge swathes of the electorate.

It was newspaper headlines that prompted MPs in both Sydney and Melbourne to examine the laws on short-term letting, although it was for very different reasons.

In Melbourne, tales of all-weekend parties, complete with strippers, hookers and drug dealers had led the city council to support residents’ efforts to ban holiday lets in the notorious Watergate building in Docklands.

In Sydney it was reports of over-zealous council officials threatening residents with million-dollar fines for letting their spare rooms; just like bed and breakfasts, only without planning permissions (not to mention insurance, fire and health approvals).

Back then, Airbnb was just a quirky American idea launched a couple of years earlier by a couple of dudes in San Francisco who had an airbed and needed help with their rent during a serious shortage of hotel rooms.

That would change a lot, very fast and, faced with the rapidly growing challenge of online holiday letting agencies, in September 2015 the NSW government launched an inquiry into the state’s holiday letting legislation.

The inquiry was initiated by Balmain Greens MP Jamie Parker who had been alarmed by room-letting, house-dwelling constituents suddenly finding themselves on the wrong side of planning laws, and threatened with million-dollar fines by local councils.


If permanent apartment residents
thought normality would soon be
restored to their homes, they were
about to be deeply disappointed.

Meanwhile, after Melbourne City discovered their zoning could not prevent short-stay and holiday lets in apartment blocks, the Victorian parliament began devising its own legislation.

If permanent apartment residents thought normality would soon be restored to their homes, they were about to be deeply disappointed. In one of her last acts as Victoria’s outgoing Fair Trading Minister, MP Jane Garrett tabled a new law that enshrined the “right” of apartment owners to let their units for periods as short as one night at a time.

Back in Sydney, a few months later, Parker would find himself seriously considering issuing a dissenting report as he watched the rest of holiday letting committee promote the removal of the last protection available to apartment blocks.

Seeking a simple solution involving minimal red tape, the NSW inquiry had latched on to a City of Sydney suggestion of ‘complying development’ which would mean home owners wouldn’t need planning permission to let out their houses as holiday rentals, provided they didn’t exceed a certain number of nights a year.

This seemed reasonable for the bona fide Airbnb house sharers but the majority on the committee saw no reason why apartments should be treated any differently, effectively removing the protection that their residential only zoning had provided.

Just to get technical for a moment, strata schemes can’t pass by-laws that interfere with the “dealing” with individual lots, including their sale or rental.  But, while they can’t directly ban short-stay lets, they can pass by-laws saying you must adhere to the council zoning.  That means they can issue breach notices without having to wait for council to do something.

In many council areas that can be a very, very long wait. So it’s an imperfect system but it works well where the majority of owners want it (as well as where they don’t). The NSW proposal would remove that zoning requirement, meaning strata schemes didn’t have a council regulation to support.

The NSW committee’s report acknowledged that short-term lets could cause greater problems for strata neighbours than residents in neighbouring houses, but decided they didn’t merit separate treatment. Instead they recommended enhanced penalties for badly behaved guests and serial miscreant hosts, as proposed in Victoria.

However, shortly thereafter, the Victorian Upper House kicked its proposed legislation back downstairs for a major re-think, largely on the basis that there needed to be more consideration given to permanent strata residents.

Oops!

But the question remains, why were Labor politicians in Victoria and (largely) Coalition politicians in Sydney so keen to override apartment owners’ desires to live in residential blocks rather than the de facto holiday hotels they feared?

Most logical onlookers could see there was a need for new legislation. Websites, emails and social media have changed the world in ways that could not even have been imagined when our planning and residential tenancy laws were first drafted. Even NSW’s brand spanking new strata Act doesn’t so much as mention online short-stay letting.

But, according to members of last year’s committee of inquiry in NSW, their task was much more complicated than they ever thought it would be, as they assessed the conflicting demands of a stack of frequently competing situations, including:

  • occasional lets of private rooms in a home while the owner is there
  • commercial lets of houses or apartments while the owner isn’t there
  • occasional lets of whole homes while the owners or tenants were away on holiday or for work
  • commercial lets of whole houses and flats, with the owner or head tenant running several properties
  • holiday beach houses in places like Byron Bay and the Central Coast
  • apartment blocks in and around the city centres and beach suburbs
  • party flats and houses set up specifically for large group events and functions that would not be governed by licensing laws.

Strange, then, that its members reached for a ‘one-size-fits-all’ solution rather than a complex and nuanced micromesh of regulations.

In its final report issued late last year, the committee gives the impression that it has heard all the arguments and weighed them up. But then it effectively turns to the short-stay letting industry and tells it to fill its boots.

The last issue in our bullet points – party houses and flats – is probably the least common problem, by a long chalk, but it’s the one that grabbed the committee’s attention. Why?  Possibly because, unlike the myriad other combinations of occasional, semi-regular, part or whole-home lets, it was easy to identify and fix. And it was sexy.


The media dutifully wrote about
‘vomiting bridesmaids’, as if
they were the only problem

“The committee of inquiry members leapt on the Party House issue when it came up,” Jamie Parker told this writer shortly after the committee’s report came out last year.  According to the Balmain MP, it was a no-brainer – the miscreants were clear-cut and obvious and there was already legislation they could follow in Queensland, so it ticked all their boxes.

When the committee released its findings, we in the media dutifully wrote about ‘vomiting bridesmaids’, as if they were the only problem with holiday lets in apartment blocks. Strata residents and managers issued a deep collective sigh: if only that were so.

Inevitably, there have been claims of preferential treatment for the short-stay industry proponents. Several NSW inquiry participants referred to cosy chats between committee members and holiday letting lobbyists during coffee breaks at the public hearings.

In Victoria, anti-short-stay activists raised questions over Premier Danial Andrews recent visit to Airbnb’s San Francisco HQ and Jane Garrett appearing on the steps of Parliament in a group shot with the agency’s local employees.

But why would our MPs apparently trip over themselves to please a small minority of residents to the potential detriment of tens of thousands of voters?

“In politics, money is power,” says Jamie Parker, noting that global entities like Airbnb were flying in executives from overseas to plead their case while the alternate view was presented by traditional B&B operators and the volunteer members of owners corporations.


‘Untrammelled access can
lead to very poor lifestyle
and living outcomes …’

But not all MPs have drunk the Airbnb kool-aid. In rejecting the Victorian Government’s holiday letting Bill late last year, Shadow Planning Minister David Davis told Victoria’s Legislative Council that holiday letting was “a very important part of our tourism industry, but it is an area where there needs to be better regulation.”

“Untrammelled access can lead to very poor lifestyle and living outcomes for many occupants of some of the large towers that we now have,” he added. “We need to find a better way forward.”

He is not alone. Alex Greenwich, state MP for Sydney, more than half of whose constituents live in apartments, believes the problem needs a nuanced response on a building by building basis.  The best way to do that, he says, is to permit strata schemes to pass by-laws allowing or banning short-stay lets.

“There is significant concern that if all recommendations of the recent inquiry are adopted, that apartment buildings will be turned into quasi hotels, creating impacts and reducing the sense of community,” he told Domain last year.

“Owners corporations should have the power to ban the practice in strata or impose additional conditions.”

Airbnb’s response was to point out that Mr Greenwich didn’t make a submission to the inquiry while they participated in the whole process.

This snide comment is a typical indication that the $50 billion global company may have started with two guys and an airbed but they are prepared to go to the mattresses if their fourth biggest tourist market, right here in Australia, is threatened in any way.

Next:  The selling of sharing – the facts, the figures, the flim-flam.

Previously:      Part 1 – Holiday lets … opportunity or threat?
Part 2 – Free money and castles in the air

Jimmy Thomson writes the Flat Chat column in the Sydney Morning Herald and edits this Flat Chat website.

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