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Hot air and cold facts as Sydney chills out with Airbnb

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airbnb cartoon

A Tribunal decision on Airbnb lets in Melbourne has sent a chill through permanent residents of apartment blocks here in Sydney but it also created a wave of optimism, if not opportunism, among both tenants and owners who are drawn to the idea of renting their homes to tourists.

The Victorian Civil Administration Tribunal had ruled that tenants renting out their entire homes on Airbnb technically weren’t subletting, and therefore weren’t in breach of their leases.

As one of the most read online items on Domain last weekend, the story clearly got people’s attention in both states. And while we are yet to see a similar challenge under NSW law, it’s another indication that regulations have failed to keep pace with the so-called “sharing economy”.

If the UberX private taxi experience is replicated – enough people openly break the law, and enough members of the public use their services – then the laws will be changed.

Last month the NSW Legislative Assembly’s Planning and Environment committee held two days of public hearings into whether or not current laws are appropriate in the age of online letting agencies.

The 210 written submissions available on the Legislative Assembly’s website, with a few notable exceptions, are a litany of disappointment, despair and disgust, not only from apartment residents and, to be fair, not exclusively directed at Airbnb.

House owners in Byron Bay, Lake Macquarie and even Canada Bay, along with unit dwellers in our city centres and beach suburbs, complain about holidaying hoons, bucks nights with strippers and hookers, and huge groups of friends who blithely ignore the “no parties” clause in their leases.

And it’s apartment residents who are most directly affected.  In one submission after another, they complain about noise, overuse of and damage to common property, mess, by-law breaches, parking problems, apathetic councils, abusive renters and aggressive short-stay landlords.

It’s all very different from the laid-back, cool image presented by Airbnb which was started, according to legend, by a couple of hip California dudes who rented out an airbed on their lounge floor.  Even now as it explodes into a multinational megabusiness, it presents itself as a kind of global, sharing, hug-fest. That, of course, is largely a myth.

For the majority of Airbnb lets in Sydney – and elsewhere across the world – “sharing” means letting out an entire house or apartment and barely meeting the guests, let alone sitting down for a cosy breakfast of muesli and toasted croissants to help them plan their day.

In fact, there are agencies that will help you avoid contact with the visitors entirely, handing over and collecting the keys, changing the sheets and cleaning up between visits.

According to consumer watchdog Inside Airbnb, 60 percent (6,645) of Airbnb’s Sydney rentals are for whole apartments and more than a quarter of those are hosted by people who run more than one property.  The figures for Melbourne are 57 percent and 4,700, respectively

In other words, for the majority of Airbnb hosts it’s all about the money.  But there are wider economic benefits.  Airbnb claims that, through them, more visitors come to Sydney, they stay longer, spend more and benefit the communities where they are staying which tend to be outside the normal hotel areas.

None of which cuts much mustard with beleaguered strata residents whose frustrations surfaced at the Legislative Assembly hearings. Michael Heaney, owners corporation chairman of Maestri Towers on Kent St, says he was given only 13 minutes to summarise a 6000 page report.

“The corruption that exists in strata buildings … resulted in the large scale running of illegal, damaging short term letting,” he writes in a subsequent complaint to the committee. “Yet [the document] which addressed this issue was discussed for barely two minutes.”

Mr Heaney’s committee spent $10,000 on their submission but other home owners don’t have the time, money, facilities or, in many cases, communication skills of industry professionals.

“I’m told it was excruciating,” says Karen Stiles, executive officer of strata owners’ lobby group the Owners Corporation Network. “Some of the home owners were so angry they could barely speak, while the holiday letting people were just so cool, slick and well-prepared.”

Apartment residents should probably get ready to be angrier. Anyone thinks the move to legislate and regulate this area of the “sharing economy” means it will be effectively banned, is living on a different planet.

So what form should the regulations take? One submission suggests simply banning whole-unit rentals in apartment blocks.  Another suggests hanging a notice on the front of a holiday home with a 24-hour telephone number in case of complaints.

City of Sydney planners have proposed a surprisingly pro Airbnb model for new legislation on holiday letting, making short-term letting a “complying development”, meaning no change of use development approval was needed.

“Permitting short term holiday letting without the need for council approval – providing the appropriate controls are met and maintained – would allow this occasional activity in residential zones while protecting neighbourhood amenity,” says a City of Sydney spokeswoman.

It seems like a stunning about-face, considering that only a year ago the city fought and won the landmark Land and Environment Court case against holiday rentals in the Bridgeport apartment block in the CBD.

“What does this mean,” asks Bridgeport resident Trish Burt, who campaigned long and hard against the illegal short-term lets. “Are we about to have our building rezoned, opening it and every other building zoned ‘permanent residential’ to large-scale short-term letting?”

Not quite.  Under the CoS model, there would be a limit on the number of days a year an entire dwelling could be let but no limits on rooms let in an occupied home.

The number of visitors would be restricted to two adults per bedroom, fire safety standards in the building would have to be “appropriate for risk” and owners corporations would be allowed to ban short-term lets through their by-laws, where that was appropriate.

The limit on the number of days per year would certainly curb commercial operators but the obvious question is, who’s going to count them and then who will enforce it? Evidence from overseas suggests the day limit, where it exists, is largely ignored.

“Expanded investigation powers that have been made available in recent amendments to the Environmental Planning and Assessment Act 1979 will regulate activity,” says a CoS spokeswoman. “Investigation officers could use this power to obtain records as to how many days a premises has been let for in a particular period.”

Which is all very well until you look at the problem Sydney as a whole has with overcrowding in apartment blocks and the ways landlords ruthlessly exploit loopholes in the law.

However, the Sydney proposal is an acknowledgement that internet holiday lets, most prominently through Airbnb, have created a new paradigm in the world’s major cities. You can’t beat them so you may as well try to control them. Just like the government did with UberX.

Why? Well, City of Sydney contains one of the highest proportions of apartments and long-term renters in the country. Those hipsters who rented out their air bed and blew up the world of budget travel would fit right in.

This article first appeared in the Sydney Morning Herald. Jimmy Thomson has used Airbnb accommodation “where it is legal.”

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