Podcast 98: A tale of two very different rentals

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We are looking at two very different kinds of rentals this week.  The first is build-to-rent apartments (which is definitely NOT affordable housing, regardless of what anyone else might tell you).

The other is short-term holiday rentals which are routinely and often erroneously called Airbnb. That’s the generic term but, in fact, we will be talking to Stayz, their biggest rivals in Australia.

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Build-to-rent is a new concept for Australia – the first in the country is having it’s inaugural “open house” this weekend – and it sees a developer build apartments specifically to let them out. 

None of them are sold to individual owners; they are all owned by the same entity so strata law doesn’t come into it (although residential tenancy laws definitely do).

As a result of the block being run in a sole owner-manager structure, the rules can be established for everyone and if your neighbours  don’t like them or consistently break them, they can presumably be asked to leave – something that never happens to even the worst-behaved owners in strata.

Upmarket

In the property in question, the Liv Indigo, the developers’ Mirvac are also the managers and they have gone for an upmarket lifestyle approach with the focus on this being your home and not just somewhere you rent.

As a result, there is no bond required, you can paint the walls, hang pictures and there’s an on-site café and children’s play room, a great gym and workspace.

The fact that there are long leases of at least 12 months and permission to keep pets as the default, all contribute to a living space that should appeal to those who see rental as a positive choice rather than sign of failure.

And there are flats of all sizes from studios for singles and start-up couples, to three-bedders for families.  It will be interesting to see how popular these are when availability in “normal” rentals is higher than it’s been for a while.

Build-to-rent builds a bridge between apartment developers and the ultimate residents.  More than half the residents in Australian apartment blocks are renters, but they are caught between strata laws and the whims of individual landlords, so you can see how a structured relationship with a single entity might appeal.  

Right now in Britain, build-to-rent projects are being viewed as potential saviours of inner-cities with one $400 million project in Glasgow’s West End just having been given the green light.

We’re heading to the open house at Olympic Park on Saturday and we’ll report back. You can book a viewing time for yourself at Livmirvac.com.

Holiday Rentals

If build-to-rent is one end of the spectrum, short-term holiday rentals are surely the other.  And with the government’s first instalment of it STHL code of conduct having been announced last week, we invited Eacham Curry, Director of Government and Corporate Affairs for Stayz, the holiday rental platform, to be our guest on the podcast.

And in case anyone thinks we’ve gone soft on holiday rentals in apartment blocks that don’t want them, we haven’t.  But it’s interesting to talk to someone froma major player in that market that doesn’t have Airbnb’s smug mendacity and flexible approach to facts as their default position.

In our chat we ask Eacham (pronounced HM, apparently) what is the main difference between Stayz and Airbnb, what effect Covid-19 has made to their business and if he thinks it will ever go back to what it was.

We aks him what he likes and dislikes about the new short-term letting laws brought in, in April, and what he loves and hates about the new code of conduct announced last week.

We ask about Stayz in apartments (not a lot but growing) and what are the biggest or most common mistakes owners – especially apartment owners – make when they start letting properties on Stayz?

Finally, in our Hey Marthas, Sue discusses the trauma of taking cats to a pet-friendly hotel and Jimmy is worried about America preparing for street violence in the aftermath of the most divisive presidential election in recent history.

Transcript, in full

Jimmy  00:00

We’re going to be talking about two very different kinds of accommodation today. You’ve got something coming up about a Build-to-rent. And we are going to be talking to Eacham Curry, who is ..

Sue

Director of government and corporate affairs at Stayz the short term letting people …

Jimmy

 …and you know how much we love short-term-letting on this podcast. I’m Jimmy Thomson.

Sue

I’m Sue Williams.

Jimmy

And this is the Flat Chat Wrap.

[MUSIC]

Jimmy  00:42

We’ll get to short term letting later. But what sold is about the build-to-rent project you’ve been following?

Sue  00:50

Well, you might remember we talked a bit about it a few weeks ago. And it’s Australia’s first build to rent apartment building. And it’s in that Sydney Olympic Park out west Sydney. And it’s, as I say, marowak built it. And this is the first time we’ve had a purely build to rent building built.

Jimmy  01:10

Now when I wrote about this a few weeks ago, in the Fin Review, somebody said, No, no, no, they’ve got them in Queensland, but they were talking about a totally different thing. They were talking about affordable housing. And this is not affordable housing. This is unaffordable housing.

Sue  01:27

Well, that remains to be seen doesn’t really we don’t know quite yet how much the rents are going to be. But affordable housing is kind of cheap housing for people whose skills we really need. And we need them to be close to the city, like nurses and firemen and people.  Build-to-rent is for people who choose to rent their accommodation rather than buy, they might be saving up to buy later. Or they might simply just prefer to rent as a lifestyle choice.

Jimmy  01:54

And because they’re maybe they’re mobile with their work and stuff like that.  Just occurs to me that your definition of affordable housing, I’m thinking, I’d like to live in a building where there was nurses and policemen and firies, I would feel so much more secure than being surrounded by website designers and lawyers.

Sue  02:19

Well, maybe hopefully, they would make better neighbors really.  In lots of new buildings, these days, there is an element of the building, maybe a few apartments reserved for affordable housing. So sometimes those people will be scattered around an apartment building, and you know, won’t know who they are know, they’ll just be there.

Jimmy  02:37

So getting back to build-to-rent.

Sue  02:39

This coming weekend, they’re having their first open day. And it’s for renters to come in and inspect the apartments and see what’s there. They’ve got amazing common facilities, apparently, they’ve got a great gym, they’ve got great pool, barbecue area, the gardens apparently is quite different to most other places that we’ve been used to renting in the past.

And I think a lot of renters get very, very tired, because when you go to an open for inspection, there might be 20 people trying to have a look and make an offer and, and trying to woo the real estate agent and giving them you know, references and everything.

But there, they seem to be organizing really well. They’re doing groups of four, I think at a time to go through and have a look in a really lovely way and actually giving them coffee and food as well. I think it’s like biscuits and cake.

Jimmy  03:36

It’s different from taking the fingerprints

Sue  03:40

Quite a different atmosphere, really. So it’d be nice. I’m gonna go along and have a look and I’ll report back.

Jimmy  03:47

We have spoken about this in the past, that the facilities, as you said, are possibly even better than a lot of residential apartment blocks in terms of the quality and the amount of the facilities.

Sue  04:03

And of course, it’s brand new, so they’ll be nice as well.

Jimmy

And they’re offering longer leases, is that correct?  

Sue

Yep. I mean, usually, as a renter, you might get three months you might get six months. , but I think these um if you want a longer term lease, you can have a longer term lease

Jimmy  04:20

Will people be able to sublet them on Airbnb and things like that.

Sue  04:25

I don’t really know. But they are managed as well by Mirvac.  And one would assume there’ll be managed pretty well, pretty tightly.  So I wouldn’t have thought that they’d be able to sublet?

Jimmy

Because these aren’t strata. Are they these? They don’t come under strata law because they are owned by one entity.

I don’t know if they’re gonna have committees, they might have committees of tenants just to let them know if there’s any problems in the building. But it’s not run by a committee. It’s run by the people who build the thing.

Sue  04:53

That’s right,  and who own it.

Jimmy  04:55

That’s quite different, isn’t it?

Sue  04:57

It is. It will be interesting to keep an eye on it. See how it develops and have a chat to some of the people who move in there later on as well? ,  Could be good. I want to see what kind of people are going in there to have a look really, you kind of imagine it would be young couples and singles. It could be families as well.

Jimmy  05:18

Could be downsizers and empty nesters. I recall when we had Cathy Sherry on recently, she hates the idea of build-to-rent. She says that everybody should be aiming to own the home, which to me sounds really old fashioned, which I don’t think anybody has ever accused Cathy of being.

Sue  05:40

Well, I guess we both come from Britain.

Jimmy

I know we do.  

Sue

A country where you don’t necessarily aim to own your own home, really,

Jimmy  05:50

When we were kids before Mrs. Thatcher. 60 to 70% of the housing in Britain was rented through local councils, what they call Housing Commission here.  And that was it. And that’s partly due to the decline in the housing stocks generally. And then the second world war, and the big cities were bombed mercilessly.

So they had to build houses for people in a fairly short order. And they built new towns and you were brought up in one of them. And so they set out to house people in Housing Commission style. And then Mrs. Thatcher came along and decided that public housing was an aberration and an abomination. And, and she came up with that great claim that there is no such thing as society. And everybody was offered them the chance to buy their homes at ridiculously low prices. But she just wanted to get them off the council register.

Sue  06:50

My parents bought their Corporation home at a very low price. And so suddenly, they became homeowners. And that was something that they would never have dreamed that ever be able to do. Because it just never came into our orbit. It was only something that rich people did most regular kind of working class people never owned a home or aspired to own a home.  Whereas Australia seems to be very, very different. People expect to be able to own their own home, and they start looking at the housing market very early on in life.

Jimmy  07:18

I think that goes  back to convict days, where people came up here as settlers and the idea that you could own a bit of land and build on it and own the house that was on it suddenly became a measure of your success in society. And that’s certainly,  if Cathy Sherry is any example,  that is still very much a sign of whether or not you’ve made it, which I think is ridiculous.

Sue  07:43

I mean, for different people, some people would make sense to own their own home, and they love the stability, and the security of that for other people, they have a different lifestyle and renting can be just as beneficial, really, if they get a good rental and they get a good landlord. Yes, that’s a that’s a big part of it.

And you know, for downsizers, if you’ve got a big home, it kind of makes sense to be able to realize the equity in your home to sell the home and then rent for the rest of your life. if you’ve got a good rental in a good area, and a great landlord …

Jimmy  08:15

Although you can overdo it as we have friends who were renting and their landlords came to visit because we’re quite friendly with them. And the landlord looked around and saw what a great time they were having and decided that they would move back in. So , counterproductive, I think is a phrase I’m looking for.

Okay. after this break, we’re going to be talking to Eacham Curry. I know that sounds like H-M. But it isn’t. It’s a Welsh name. He’s from Stayz. Now normally, we don’t have a lot of truck for short term lighting, but it exists. And there are plenty of people who own and indeed rent in apartment blocks who think it’s a great thing. So we’re going to take his opinion on recent changes, including the new code of conduct, which he thinks is basically at the moment, a waste of time and space. So that’s after this.

[MUSIC]

Jimmy  09:19

As I said before, today, we have Eacham Curryurry from Stayz. And he’s actually been in the press this past week talking about what a waste of time the Code of Conduct is. Not the Code of Conduct itself, but the fact that only part of it has been brought up. And in fact, we came across an internal memo in the Department of Consumer Affairs that said, none of this stuff that they’re introducing on December 18th will actually take any effect until June 1st so I think the phrase he uses is window dressing. Here he is now.

Good morning. Eacham. How are you?

Eacham  10:00

Good morning, Jimmy. Good morning to you. And good morning, Sue

Jimmy  10:03

So look, let’s get straight into it. What is the difference between Stayz and Airbnb?

Eacham  10:11

Well, there’s one really significant difference and that is history. So Stayz is nearly three decades old, we started off producing a booklet, which was available for purchase, or could often be found in the real estate agents of small towns when people wanted to go on their holidays.  And people would use that book to find a property that they liked the look of, or perhaps when they rolled into town, go and visit that real estate agent to choose somewhere where they could spend their Easter or their Christmas.

And of course, when the internet came along, it changed everything. It suddenly meant that companies like Airbnb, were able to use their technological expertise to delve into the accommodation sector a bit like Uber did with the ride sharing business.

And of course, we had to evolve. And so we did. But the really significant difference here is that we took those three decades of learnings about how to integrate into communities well, and what it took to be a good host, what it took to be a good neighbor. And we applied that to our business. 

Now, Airbnb, doing all the  sorts of things in terms of wanting to try and provide the service, but they don’t have that same longevity of experience. And that’s created some issues and problems around which governments are now trying to grapple with respect to behavior and impact on communities and some of those sorts of things. So that’s probably the single biggest difference.

Sue  11:38

So then there were no problems before?

Eacham  11:41

Oh, no, no, no, there’s all there always were and they’re always going to be some issues, you’ll never be able to get rid of that entirely. But importantly, what are the learnings that came out of that, and that’s now and part of our experiences now feeding into the things that we’re sharing with governments about how to develop regulation, to actually provide guidance to the sector as a whole, and also to help provide assurances to communities and others that we’re doing the  thing.

Sue  12:08

So Stayz operates in a similar way to Airbnb does. Do you do have hosted Stayz?

Eacham  12:15

So this is another important it’s not the primary difference, but it is a very important one. Stayz and our sister company BookaBach in New Zealand do not have any hosted properties on our sites whatsoever. And that is a big difference. Because hosted properties are a significant part of Airbnb’s offering, there are differences between the kinds of perceptions about what that means for the impact that it has on communities.

Sue  12:44

So that hosted means somebody lives in a house and then rent out a spare room kind of thing.

Eacham  12:50

That’s what people will generally anticipate hosting means it can be mean different kinds of things. For example, if a property owner has a granny flat, you might reasonably argue that granny flat, which is not attached to the main house is not actually hosted. But there is a host on site, if you like, even if they’re not actually in the premises.

Sue  13:11

And it Stayz active in apartments?

Eacham  13:14

Well, yes, and it’s an area that we’re trying to seek to grow into. So traditionally, and even now, the greater part of our offering is not in metropolitan areas. And so by virtue that means that we’ve got no hosted properties, they are usually in more holiday destinations away from large metropolitan centers. And so our mix of of properties, which include apartments in metro areas, is proportionately smaller, but it is an area that we’re trying to get into a bit more.

Jimmy  13:47

And what difference has COVID-19 made do business

Eacham  13:51

Oh, look, it’s huge. And, this won’t be a surprise. The accommodation and the tourism sector generally went over a cliff when the pandemic hit, but what we started to see in Australia especially, and New Zealand, both of which show countries which have a lot longer history of embracing holiday rentals in a way that other parts of the world do not. From around about June, July, and August, we started to see an uptick in people who were so desperate to get out and take the kinds of holidays especially Easter, which was which would have not been available to them starting to go and do that.

And what they were doing was they’re starting to visit short term rentals in place of hotels and the like. And there’s a couple of reasons for that. So that some of the analysis suggests that that’s because people were perhaps a bit fearful of what hotels might mean, especially if there wasn’t the same capacity to self-distance or isolate from other people.

But more than that, the closure of international borders meant that a lot of Australians who weren’t now traveling overseas were looking for different kinds of localized holiday opportunities. And that’s been driving some of the demand for short-term rentals to the point where I think it was in September, we saw globally about a 300% increase in the number of people who are seeking to try and take their holidays in short term rental style accommodation.

Sue  15:29

So will it go back to what it was? Or will it be even better than it was for you?

Eacham  15:35

It’ll certainly change.  Look, whether the kind of uptick that we’ve seen is a permanent one is, is something that we did see, I suspect it will ease off, but I suspect the complexion of travel broadly is going to change massively, especially holiday travel, in that I think you will see a greater focus on short term rental and probably a diminution of holiday visits to hotel style accommodation in the longer term.

Sue  16:08

And also overseas. I mean, I know my parents say, I don’t think we’ll ever go overseas again. And there may be some people who feel the same way, that they don’t feel confident about going overseas so much so people might holiday more at home as well.

Eacham  16:22

Well, I think people are starting to realize the you know, just how lucky we are especially here we are to have a pretty a diverse and amazing place to go and visit. Look. People like traveling, we you know, we’re humans like to move around, we like to go and see different things. I know that there is still a lot of fear. And especially while there isn’t a vaccine, they probably use some sense of negativity that that international travel will never return. But I don’t think that’ll last forever.

I do think especially once there’s a vaccine, and especially when there are improved testing, regimes, and contact tracing and those sorts of things, you will … especially start to see it from younger people who are more confident about how they can manage them themselves and their safety. And I think you’ll start to see a return in travel. It might just take a while. Certainly won’t be this year, and probably not in the first half of next year. But once those international borders start to open up again, I think you’ll start to see a return.

Jimmy  17:19

Now, we had new laws about short term letting come in earlier this year. What did you like about them?

Eacham  17:27

So there was a very comprehensive suite of measures that the New South Wales Government have sought to introduce. And one component of that which they brought in in April, was the capacity for strata bodies to be able to make self determining decisions around how owners in property should be treated within that strata.

We thought that was a good thing. We’ve long argued that strata should be able to do that. But the one downside, the one thing we didn’t like about that was the capacity for Australia body to prohibit somebodies personal use of their property. And then we, while we support the ability  to make decisions that about the kinds of behaviour, we didn’t support an all-out ban on people being able to lert their property.

Jimmy  18:12

But speaking from the point of view of strata owners … we’ve had a similar thing go through with pets, but from the point of view of people who just don’t want a lot of strangers coming through their common property, and using the facilities, and people say, well, do you know, who’s in the pool with your kids and things like that? I mean, isn’t it reasonable if and it takes a 75% vote to pass a bylaw? Isn’t it reasonable for people to say we want our apartment block to be residential and not basically a hotel, which some of them, as we’re seeing around Sydney are turning into, especially with Airbnb,

Eacham  19:03

You’ve touched on something really important there. And look, it is reasonable for people to be able to express a concern about the way in which a property that they have some share in is being treated. It’s reasonable for them to expect that there are particular standards of behavior that are applied to people who are visiting that property.

I don’t think it’s reasonable to impose on someone’s personal property, limits on what they can do with that property. But it is a 75% decision of owners which would determine whether or not they can benefit. That’s an important safeguard. The principle again, which we which we think will underpin all of this is that people should be allowed to do within reason what they like and provided that is legal within their own property. But they also ought to be cognizant of the needs and desires of the broader community and encourage behavior appropriate to those things.

Jimmy  20:09

Now, the Code of Conduct which we’ve seen a fragment of that come in, or it’s due to come in on December 18th, week before Christmas, you’ve been quite vocal about this in the media, and you’re not 100% in favor.

Eacham  20:28

Well, there’s nuance to all these things. As you’ll appreciate, Jimmy, we’ve been working with state government and various ministers who had carried these proposals for several years now. We were heavily involved in the working party that that developed the code of conduct and we’re very supportive of its provisions. Now, look, it won’t be a surprise to you either, that not every part of it do we love but that’s not going to be a surprise to anyone. When people have their businesses regulated, some of it they’ll be okay with another parts they won’t love. In the main we think this code is excellent.

The problem is that what they’re seeking to introduce is only one part of the suite of measures. There are other things which are yet to be developed, and these fall within the remit of the Department of Planning. Yep, the code sits within Fair Trading …

Jimmy  21:20

Consumer services.

Eacham  21:25

Consumer Affairs, that’s it. The problem is, if you don’t have all of the working components coming into effect at the same time, individually, they cannot work. Our concern is that the code becomes toothless.  And that risks the code itself, having confidence in the capacity of the code to regulate the industry being undermined from the outset. And it also makes it a window dressing exercise … what is the point?

Jimmy  21:54

And it IS window dressing, isn’t it? I mean, because the other two major elements of the code that are missing are the registry, and the fire safety regulations, which, from what I’m hearing, a lot of people on your side, not specifically Stayz, but on the industry side, are saying the proposed fire safety regulations would put a lot of people out of business.

Eacham  22:21

Well, that’s an important point, Jimmy, and I’ll come to the fire regulation side of things in a moment, it’s important to understand that there are a couple of missing bits here. There are, in fact, two registers that are part of the suite of measures. accompanying the code is an exclusion register, which was part of the original proposal of the government. And we argued back then before they were looking to introduce a premises register, that an exclusion register was all good and well, but again, was meaningless if you didn’t know who it was that was letting a property in the first place.

We thought that the premises register was an important component. That’s not proposed to come into effect. until mid next year, the exclusion register will come into effect with the code in December. Now the exclusion register will contain the details of a person who has been found in breach of the code. And there are very strong penalties to accompany that, the premises register is going to, importantly, do some of the stuff to help support the implementation of the code, but also feed proper data back to government. So that when and there is a requirement to review legislative or regulatory arrangements, it’s supported and backed up by the data.

It’ll include the name of the owner, the name of a property manager, if there is one, it’ll include some other important things like, declared that you’ve got minimum levels of appropriate public indemnity insurance, which is generally provided as an extension of our contracts with our partners. And here, it gets really important to me and you know, we could explore this a bit further, it will require the owner to declare that the property has the relevant and appropriate fire regulations or other H&S provisions in place.  If you don’t have that registered there to support the provisions of the code, the code becomes unworkable.

Jimmy  24:24

I mean, I noticed one of the things in the code is demanding that the host of the property be available for contact between eight in the morning and five in the afternoon. That’s not the peak time for trouble, really, is it?

Eacham  24:39

No, that’s  And look, that’s a minimum. I mean, we as a platform on our own, we actually take a more stringent view of that we want to make sure that there is some way or method of recourse for anyone who’s got a concern whether it be a traveler or an owner, or a member of the committee. At least we provide a 24/7 service line that people can call in the event that there is an issue around this. And we think that that’s something that Fair Trading ought to be doing as well. Now, the code is setting a minimum standard on things, not a maximum. So that doesn’t mean to say that there shouldn’t be other provisions to allow for people who’ve got concerns about some sort of behavior or another issue happening for them to be able to engage.

Sue  25:25

Why is this coming in in such a fragmented way? I mean, the government has been looking at this for such a long time you think that they’d be able to introduce everything at the same time to make everything most effective it possibly could be.

Eacham  25:38

Great question. So look, we’ve been asking the same question to government. For some time, we’ve been supportive of minister Anderson’s efforts to try and get this up a bit concerned when we find out at the last minute that they’re proposing to introduce the code without the other major elements. It risks, all of the good work that’s been done. I suspect, the issue is that planning who should have known for some that way he did know for a long time this was coming, have dropped the ball.

Jimmy  26:07

And they would argue that they’ve been a bit, as everybody does with every problem at the moment that COVID gets blamed. But , as you say, they’ve been talking about this for two or three years now.

Eacham  26:19

You’re 100% right.  I mean, back in April, we wrote to to the government saying we thought it was a good time to actually try and introduce the entire suite of measures, at the same time that they were looking to introduce those new strata self-determination laws.  And we were told back then, look, we want to bring those in. That’s an important component. But we’re going to delay the other measures until later in the year because of the pandemic. We didn’t love it. But we accepted that that was probably reasonable at the time.

We wrote again to the government in June, saying it’s time to introduce the entire suite of measures.  And we’re told, again, look, we’re working on those things, we’ll look to it towards the end of the year. And that’s what we were anticipating the announcement was going to be around. And then we find that, in fact, that’s not the case. So they’ve known since April, when they first introduced that suite of measures for strata that they was going to be a further point when all these things needed to come together. And, and that’s seven months ago, planning didn’t get their act together.

Jimmy  27:28

But I’ve seen – admittedly, it was a confidential internal memo from the Department of Consumer Affairs –  saying that they are not going to be pursuing breaches in the first six months of the code of conduct. The phrase you used was window dressing. And it does kind of feel like that, that they’re saying, Hey, we’re bringing in and they got a lot of publicity that bringing in the code of conduct and people that party animals are going to be banned and all the rest of it, but are they even taking reports?

Eacham  28:03

It’s worse than window dressing, it renders the code toothless. And in fact, the Minister admitted when he made the announcement on Tuesday that there was that breaches of the code would not be prosecuted, until the register came into effect. What is the point of having the code then? Is it not better to delay its introduction until all the parts are working together? Because not only will then be effective, yet, but but to have the code sitting out there on its own risks undermining people’s confidence that it can work at all?

Sue  28:38

If people are actually owners are thinking about listing properties on Stayz are the biggest, most common mistakes that they can make? I mean, is it other things that people do wrong?

Eacham  28:49

I think probably teething problems for any new owner of a property is the single biggest problem. It’ll be around things like how they accurately price, their property and how, how they make it available. There’s lots of sorts of things which we seek to do try and educate new players on the best ways to manage those kinds of issues. These are pretty normal, and you know, the sorts of concerns or issues that might arise for anyone who’s starting any new kind of business, it’s not really a surprise.

As a specific example, it might be making a mistake on the blocking of dates and defining the to then as you’ve got double bookings, or a traveler being quoted the wrong price, those kinds of things. They tend to get ironed out after a while and as the person gets more experienced in how to deal with this, but that’s the most common mistake that can be made.

Sue  29:50

Double bookings would be a bit of an issue that you turn up and there’s another family there.

Eacham  29:56

It makes you want to tear your hair out.

Jimmy

I think this has been one of the issues with Airbnb, specifically, because there’s so it’s so easy to go online and register as a property. I’ve actually stayed in a few in various countries, and some people get it.  You know, they do the right thing.  Other people, it’s like they just had an idea over a drink on a Friday night. And by Sunday, they’re, they’re setting up basically a holiday home. Are you educating? Are you training your hosts not to do that?

Eacham

We take, we take our role in actually educating our, our hosts really seriously, we think it is worth investing the time because it does no good to our business. If we’ve got hosts who are inexperienced, and not providing the best possible opportunity for travelers, all it does is damage our brand. So it makes sense for us to invest time in educating our owners, and to share the experience of starting something with them so that when they do start when they make that first lit, they’re as well prepared as they can be.

Inevitably there will always be some issues for new owners new hosts, but we try and make that as smooth as possible. And the key and that is education, we made that point, in fact, in the development of the code of conduct that this was going to be a useful resource and tool by which people could actually start to understand some of the things that are contained in the code and will help them to, to work out how to be a better host.

Jimmy

We touched earlier on, on strata committees and strata owners and the resistance in a lot of buildings to having any kind of short term letting. Is there anything that you that you can say to strata owners that they could be doing to mitigate the problems?

Eacham

Talk to neighbors, I go back to that point that we first made about the some of the history of Stayz, and we are pretty good at knowing what it takes to be a good neighbor. And while we may not have a lot of inventory in higher density areas, the evidence is brought out by the number of kinds of complaints there are about today’s properties, and there aren’t a lot where you tend to find the issues around short term living is around parties.

And it’s one of those kinds of things. It’s a very rare occurrence with properties that have been let through us. And that’s because we’ve got owners who take the time and talk to their neighbors to tell them what’s going on to be involved in their communities and make sure that people understand that the expectation of the owner is that there will be a standard of behavior appropriate to and cognizant of all those which would be expected by other people in that same community.

Sue  32:55

I guess it’s all about understanding other people’s expectations, isn’t it? We had some friends who rented a property once and it wasn’t through Stayz. I might point out that when they went to bed in the evening, they discovered the owners underpants was still in the bed between the sheets.

Eacham  33:13

So for some that would be unfortunate. There are the others who think that’s a bonus. I can’t speak to people’s otherwise bedtime habits. Look, yes. I’m when I made that earlier point about the there will you’ll never get 100% capacity to be able to have everything worked perfectly appear of an unwanted underpants in a bed is a good example. And I’m sure that the owners were mortified.

Jimmy  33:49

Well, perhaps. I’m just curious, something that has occurred to me is the Queensland situation. I mean, the whole strata industry in Queensland was originally based on holiday rentals. And those holiday rentals were run usually by the onsite manager of the buildings, and they had it in their contracts that only they were allowed to let the properties now it seems there’s this kind of quiet revolution in Queensland of the apartment owners saying well, we don’t want you to run the lets. Is Stayz moving into that area? Are you aware of that, that they’re kind of taking over what was quite a closed shop.

Eacham  34:36

I have to admit to you that’s something new for me and I’ll be keen to sort of explore. It’s not something that’s come across my my desk before and I’d be be most interested to sort of discuss at greater length but I can’t give you much of an answer on that, I’m afraid.

Jimmy  34:52

It’s a very weird system up in Queensland where the developer sells the management righs before the body corproate’s even formed and people move in and they have no say over the contract. One of the ways they’re talking about getting rid of the managers that they never hired in the first place is to not give them the holiday letting. And so maybe there is an opportunity there for you.

Eacham  35:19

Well, look, there probably is. And I mean, just as a point of interest here, we been involved in a similar sort of working group and industry reference group that was commissioned by the Queensland tourism minister some time some time ago, probably 18 months ago, that had done some really useful work, preliminary work towards a set of short term rental regulations not completely dissimilar to what we’re looking at in New South Wales. That’s been, understandably enough, sort of put off for the time being, again, because of COVID. Now, of course, they’re in the middle of an election, and perhaps we can get back onto things next Monday. When there’s a result,

Jimmy  36:00

If there’s a result.

Eacham  36:03

Well, well, a whole other question for another day. I think that will be resolved. But look, that there’s a lot of really good groundwork that’s been done. That’s probably a useful thing to be included in the mix of considerations around these sorts of things.

Sue  36:19

And as we as we go into the future, as we come out of COVID, how do you see short term letting develop?

Eacham  36:26

Well, we know that it’s growing? We know that and so I touched on this before, I think with the increase in the number of people who are seeking to have these kinds of experiences, I think that’s going to going to continue to grow. And I think it also it highlights why it’s important for governments … to try and get regulation in place, so that we don’t have the kinds of issues which we’ve seen thrown up. You know, it’s part of the reason we’re a bit disappointed that New South Wales isn’t introducing the suite of measures all at the same time, it’s more important than ever, that we’ve got some certainty around how it’s supposed to operate.

Jimmy  37:09

Okay, and something has just occurred to me. Do you take tenants? I mean, when somebody is a tenant and a property, they can they still list that property through Stayz as a holiday rental?

Eacham  37:22

So historically, we have had some properties, which would otherwise be classified as hosted. We have spent a lot of time unloading those that’s it’s not part of our value offering to to our broader clientele at the plane who want to book through us. So no, and it’s not something we want, it’s that they are not the kind of properties that we want to list.

Sue  37:48

It’s only if the tenant isn’t living there, like the tenant goes and Stayz on their boat or something, and rents out their whole apartment or house. So it’s not actually hosted, you still wouldn’t allow it?

Eacham  38:03

That’s an important point. And look, it’s one of the things which we think the commissioner for Fair Trading is going to try and add need to put some, some rules or guidance or clarity around. What exactly does constitute 100 hosted or an on hosted property? What is a primary and secondary residence. We do have properties, which are secondary properties, that is either an investment or a holiday home that we let out, there’s just no one there. So we do do a lot of that.

And where there is perhaps some need for further clarity, clarity around this is, and I mentioned the instance of a granny flat before but at what point does somebody who is claiming to be a home owner of a hosted property remain a hosted host for that property? If once people have come and moved in and they’re staying for a few days, that person then goes off site –  they might go off site for the duration of the day.  

And the reason this is important, and this is important is because the new rules plan for New South Wales carve out the state into two sections, they’ve got Greater Sydney Yep, which extends up to up towards Newcastle and down towards the Illawarra, and going out towards the Blue Mountains. And then you’ve got the rest of the state. In Greater Sydney, there is a cap on the number of nights that properties on hosted properties can be let over 180 nights.

Hosted properties, can be let unfettered outside of Greater Sydney. The state government’s view is that it should be 365 but local councils can tailor it to their own needs down to not less than when it  and there are two further important carve outs. There is provision allowed for Byron Bay and for Waverly councils, if they make applications to the state government to seek to lower that number of nights because there are particular hotspots.

But here’s the problem. It assumes that simply because a property is hosted these somehow safer. It’s like the old argument that’s used by the taxi industry. Taxis are safer than Ubers because they’ve got cameras in them. Well, we know that that’s not true. We know that cameras can be gamed. Yep, the same argument is that a hosted property was is by dint of having someone there, less disruptive or safer than a non-hosted one. We also know that that’s not true. It’s not rocket science to work out that a visitor coming to a hosted property might still forget the entry code, they might have forgotten their fob they unfamiliar so they might be inadvertently banging around and doing things which are disruptive to the amenity of the community.

It doesn’t mean that that it’s an unreasonable thing to then argue that by virtue of it being hosted, it’s safer. But here’s the other important and problematic point. What happens if that host does go off site for the remainder of stay, even though they were there perhaps to greet visitors when they first arrived? Does that mean the property use is really still a hosted property? I would argue doesn’t.

Jimmy  41:13

And we know that there are plenty of people out there who are looking to game as you said, to game the system by pretending they’re one thing and actually when they turn out to be something totally different. Thank you so much for giving up part of your Saturday morning to talk to us.

Eacham  41:33

It’s been my pleasure. I’m sitting here, twiddling my thumbs, waiting to watch Anthony Green read the results of the Queensland election. It’s been a very pleasant distraction.

Jimmy  41:44

You’ve got the American election to come up more some twiddling before we get to that one.

Eacham  41:49

Oh,  Well, it’s been tough. Some twiddling for some months now. I was very much looking forward to it.

Sue  41:55

It’s more teeth gnashing, isn’t it?

Eacham  41:58

A bit of both probably.

Jimmy  41:59

Okay. Thanks very much.

Eacham

Thanks. Bye.

Jimmy  42:05

Wow. He’s not keen on the code of conduct, as it stands, is he?

Sue  42:10

No, doesn’t hold back.

Jimmy  42:12

I’m sure there’s a reason that government have done this. They’ve issued this thing about party houses, but that’s always been a very small part of the problem with short term rentals. Obviously, he thinks people should be able to have short term rentals if apartment blocks if they want to, regardless of the view of the majority of people. And I totally, strongly disagree on that. That’s his business we shouldn’t be surprised that that’s what he thinks. But I this has got a long way to run.

And now we have owners corporations, looking at the holes in the bylaws in New South Wales, I mean, the rest of the rest of the country, you can pretty much do what you want. But in New South Wales, you can bring in bylaws to prevent people letting their apartments on Airbnb, but it’s only if they’re empty apartments. So if you can prove that your apartment is your principal place of residence, then you can allow it to be rented by people, even when you’re not there.

Sue  43:24

I had some friends who had a boat and they would get a booking and then go and live on their boat for a few days, come back again. And their flat was still their principal place of residence.

Jimmy  43:33

 And in fact, according to David Sachs, the other week, if you lived in your apartment for seven months, and then let it out for the other five months, it would still be your principal place of residence. So it’s interesting what some apartment blocks are doing. They’re bringing in things like restricting the use of facilities only to people who have done safety training,

Sue  43:56

Which is a good idea.

Jimmy  43:57

I think it’s a great idea. I think if you get these people like Airbnb, and to a certain extent Stayz coming along and saying, well, you bought into a building, where the development approval was said specifically no holiday waiting. And these big companies have come along and said, well, stuff that we’re going to put holiday letting in there. I think if companies are doing that, and if people ordinary people are going along with it and taking advantage of it. We should be able to get creative as well. Disrupt the disruptors, that’s what I say. After this, we’re gonna have our Hey Marthas for this week.

[MUSIC]

Jimmy  44:40

And we’re back. So what’s your Hey Martha for this week?

Sue  44:43

Well, when we were doing our podcast last week, we were just about to leave and go to a pet friendly hotel with our two cats while the demolition work started on the renovation of our two bathrooms. Yes, avoid the noise and disruption stuff for a few days. And it was an interesting Experiment being in a pet friendly hotel and not completely successful, I must say.

The hotel had just one floor that was pet friendly. And it had a big courtyard at the front, where, in theory, your pets would go out and gamble happily in the sunlight. But unfortunate rained all the time. And our cats were just too terrified even to venture beyond the bed.  And sadly, the cats just didn’t enjoy and didn’t appreciate us taking them on a holiday.

Jimmy  45:28

I kind of felt that, in retrospect, I didn’t want them traumatized by going into a cattery. But the way cats react to change is they find somewhere they feel safe and secure. And just stay there.  And what we subjected them to was different voices out in the corridor …

Sue  45:48

And a dog barking in another room. And unfortunately, on the first morning, we woke up and couldn’t find one of the cats anywhere. It was only a tiny hotel room and was a bit panic-inducing until we discovered that one of them had managed to squeeze herself behind the room safe in a tiny little space. Just because she felt safe there.

Jimmy  46:14

I think she was taking the “safe place” literally. And then on the second day, they started renovating the room next door.  So the noise … The funny thing was just when I was checking out, and as the receptionists, as they do in most hotels, asked “did you have a nice time?” Or you know, was everything okay? And I said, it was fine, apart from the fact that you were renovating the room next door, and we came here to get away from the renovation.

But there was another woman waiting, socially distanced at the other end of the counter. And she said, Did you come here to get away from renovation? And I said, yes. She said, so did I. And we were in the other side of that.

Sue  46:52

The best laid plans? Oh, well.  What’s your Hey, Martha, Jimmy.

Jimmy  46:56

Well, as you know, and I’m obsessed with American politics, and by the time many of you listen to this, we will know what happened in the American election. But I’m reading these stories about how like in Washington and other places where there have been riots in the past, the shops are being boarded up, because they fear of what’s going to happen.

Sue  47:18

Walmart has stopped selling guns, hasn’t it?

Jimmy  47:21

 And I don’t remember this ever happening. I mean, there’s been contentious elections in the past, a lot of people have forgotten that. Remember, when Al Gore ran against George Bush, and it came down to the votes in Florida, the hanging chads became famous. And the Supreme Court decided to stop them counting the votes in Florida, Bush won Florida, even though Gore had a higher vote in the population. And Bush became president, then we went into the second Iraq war. And it all came down to the Supreme Court.

Now, the Republicans in the USA have stacked the Supreme Court so that it’s always going to be you would think, probably pro Republican, whether or not that’s pro Trump is another matter. But it feels like America is just on the brink of something awful happening. He got all these crazy,  right-wing people turning up with guns and shooting people and being endorsed by Trump.

Sue

It’s a powder keg.

Jimmy

That’s the word I’ve been reaching for.

Sue  48:29

And let’s hope it doesn’t go off, let’s hope the election goes the count goes peaceably. And whoever wins, wins, and whoever loses actually gracefully,

Jimmy  48:40

There’s a chance that one of those two people might accept that. But the problem is, the person who looks like being the winner is the only one who would accept defeat gracefully.  And the other guy is ready to go out on the campaign trail, to stir people up.

The one thing that that could happen, and we hope will happen, and by the time you’re listening to this may already have happened is a decisive victory on one side, but you know, you’ve got a guy who’s been going around undermining the validity of the election for the past six months, based on lies, just complete lies.

Sue  49:18

Unlikely he’ll give up.

Jimmy  49:20

Very unlikely but you know, the one thing that’s come out of all this for me and is that America, as they keep telling us is the greatest democracy in the world. It really isn’t. The whole issue of voter suppression. The way that they make it very difficult for people of color or Hispanic people to vote, because the clear message in every election is the majority of people in America want a Democrat government.. So they have all these ways of making sure that doesn’t happen. That doesn’t sound like the greatest democracy in the world to me. And in fact, people were saying that here,  here in Australia is probably as good as it gets. Hmm.

But then we have compulsory voting and Americans don’t like being told what to do. Anyway,  now, as you listen to this, I’m probably drowning my sorrows or celebrating with the bottle of whisky that I won in a bet from one of our friends. And by this time next week, it’ll all be history.

Sue  50:30

Great. Well, thank you, Jimmy.

Jimmy  50:31

Thank you, Sue. And thank you, everyone for listening. We’ll talk to you again soon. Bye.

One Reply to “Podcast 98: A tale of two very different rentals”

  1. Avatar Jimmy-T says:

    If you want to start a discussion or ask a question about this, log into the Flat Chat Forum (using the link above). More people will read it there and you can more easily keep track of responses.

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