Short Term Rental Accommodation (‘STRA’) – We need more localised approaches to regulation

Lately, there has been a fair bit of focus on the role whole-house short term accommodation is playing in the rental crisis, right across Australia. You may remember from our May eBulletin that we shared a podcast series called Airbnb vs New York City.

A few weeks ago, celebrated urban planning academic, Professor Nicole Gurran, spoke on Radio National about the impacts of short term rentals on the residential rental market, particularly in high amenity tourist locations. 

Surprisingly, the other guest on the show – being Yoav Tourel, Board Director of Australian Short Term Rental Association – tended to agree that some sort of regulation is required, but the Association would like ‘consistency’ in regulations across jurisdictions for investor confidence.

In late 2021, the NSW Government introduced mild STRA day-cap regulations for Greater Sydney and other LGAs on a case-by-case basis. 

‘Mild’ means whole-house STRA use is exempt 180 days in a calendar year, which is hardly an incentive for investor landlords to revert STRA use to a dwelling house for renters in many circumstances.

Byron Bay Council is progressing a Planning Proposal for STRA use to be regulated to a lower 90-day cap, except in some ‘high amenity’ locations which have been forfeited as exempt use 365 days a year. This proposal comes after a bit of back and forth with the NSW Department of Planning, wherein the Department requested Council complete an Economic Impact Assessment on the original proposal for a blanket 90-day cap across the LGA.

Randwick City Council, as part of a comprehensive review of their LEP, has attempted to introduce a lower blanket 90-day cap as well across the LGA. The Department has similarly been apprehensive to grant a positive determination on this, citing the need for the Department to monitor the outcomes of the existing 180-day cap which has been in effect since late 2021. Council, in order to progress all other aspects of the comprehensive LEP review, has had to suspend its request for the lower day-cap proposal.

We are of the view that the Department should be more accommodating to Council requests for alternative regulatory approaches to the STRA issue than those allowed by the Housing SEPP, and indeed in circumstances where Councils are attempting to work within the existing Housing SEPP framework to seek lower day-caps.
Consistency in regulation across jurisdictions serves the purpose of shoring up investor confidence, but does not serve the expressed needs and will of local communities in wanting to preserve homes for housing.