Fair Trading Amendment (Short-Term Rental Accommodation) Bill 2018

20th June 2018

Mr GREG PIPER (Lake Macquarie) (16:45): I speak in debate on the Fair Trading Amendment (Short-term Rental Accommodation) Bill 2018 and observe at the outset that this relatively simply bill deals with a very complex issue. However, I am pleased that we are finally seeing some overdue reform in this area. I wish that our communities did not need this kind of intervention, but the evidence is clear that at least some of the operators who use this relatively new disruptive model of holiday letting provide an experience to surrounding neighbours that is truly disruptive to their residential amenity. I have spoken in this House on a number of occasions about the negative impacts that the short-term rental accommodation industry is having on residential areas in my electorate. That is not to say that I oppose the industry outright, and nor do the many constituents in my electorate who have had issues with short-term holiday rentals being established next door to their homes.

Hundreds of residential home owners in my electorate are letting their homes or spare rooms out to short?term visitors. In fact, that number has more than doubled since I first raised this matter in this House. At least some of those home owners are earning a supplementary income from empty or under?utilised assets. I have no problem with this type of sharing economy in principle. In fact, I have no problem at all with shared homes in instances where the owner or host lives on site. But most of these homes are in residential areas and there is a valid argument that they disadvantage traditional tourist accommodation providers such as hotels, motels and resorts, which have complied with planning rules, paid the associated compliance costs and are subject to stringent operational guidelines and conditions. Equally there is a valid argument from neighbours of those properties that a lack of regulation has turned their once-quiet residential neighbourhoods into transient tourist zones. Importantly, this can also eat into the supply of residential housing stock that in many areas is in great demand.

Some of my constituents have had all manner of problems with neighbouring properties being rented out on short-term leases. One constituent had properties either side of his waterfront home leased out through Airbnb. He had no end of trouble with noisy tourists destroying any sense of the tranquil waterfront environment they had come to enjoy, as well as destroying any sense of residential neighbourhood for those who had bought into the area. Other neighbours said things like, "It just does not feel like our neighbourhood any more. We are getting a new neighbour almost every day. Noise and activity has increased substantially." They hastened to add that not all guests were noisy drunks, but many were. Sadly, no amount of calls to the property owner, the local council or, in some cases, the police could provide a timely fix.

I am aware of many instances where homes in my electorate have been turned over to party crowds. In one case, a mother rented a large home on the lake waterfront to hold her teenage daughter's birthday party after she had been turned away by local clubs and hall operators that had seen one too many eighteenth birthday party get out of control. She was able to do so freely and without question. It ended with the familiar story of drunk kids fighting with police, smashed bottles and neighbours abused. When one hears about these party house stories one might have the initial thought that this might relate to more traditional tourist areas such as Byron Bay or the Gold Coast but that is no longer the case. They are happening in average residential communities, and they can happen anywhere. I am not suggesting that this happens at every property leased to short-term tenants but it does happen—and it happens far too often.

I turn now to the bill. I note that many of my recommendations, as well as those of the parliamentary committee, are included in the content of the bill. They include shared experiences and ideas on how to deal with this matter. Significantly, the bill contains a number of measures aimed at protecting the rights of individual home owners. It also establishes a code of conduct within the industry, which should go a long way towards negating some of the problems. It provides measures for strata managers to control short-term holiday lettings in a way that is suitable to at least 75 per cent of apartment owners. I accept that this has been a complicated area to manage and a significant issue in high-density areas such as Sydney. But I am hopeful that this bill will deliver owners' corporations the capacity to decide the extent to which their strata operation is transformed into a quasi-hotel. I also agree that in cases where a host lives permanently on site that those premises can be let to short-term guests 365 days a year. That is certainly consistent with the traditional bed and breakfast model, which has operated in most communities for decades without significant problems.

However, it is disappointing that premises outside Sydney where no host is present on site can be let for 365 days a year. The bill will allow local councils to reduce that number to 180 days a year, but some of my constituents say that that number is too high and it should be reduced to 90 days. I agree with them. Councils are burdened with managing the fallout from problems with short-term letting so they should be given more power to set limits that are better tailored to the local situation. The Minister said in his media release that the 180 days a year "approximately equates to weekends, school holidays and public holidays". With all due respect, that was like saying to residential neighbours of these properties, "Hey, the house next door is only going to be a party house on weekends and public holidays." I do not think this condition will achieve the desired result, nor will it restrict short-term holiday lettings to weekends only. I would have preferred to see councils given the capacity to restrict such operations to 90 days a year or to whatever number they see fit. They should also be given more power to use discretion on a case-by-case basis.

Nevertheless, the mandatory code of conduct will go a long way towards establishing complaint-handling mechanisms within the industry and set appropriate operational guidelines. I am somewhat wary of industry- managed codes of conduct—the banking industry has a code of conduct and we have all seen how well that has worked out. However, I am heartened that this code of conduct will establish a proper complaint-handling system for neighbours of short-term rental accommodation, as well as strata committees and owners' corporations. The complaints will be assessed by independent adjudicators that have been approved by Fair Trading, while a "two strikes and you're out" policy will be introduced for hosts who do not play by the rules. Even though I support this, I still have some reservations. For example, I am yet to see any great detail as to what will constitute a serious breach of the rules. I note the Minister's comments that it could be "any behaviour which unreasonably interferes with a neighbour's quiet and peaceful enjoyment of their home", but we will have to wait and see the detail of the code of conduct.

I have always maintained there is a place for a sharing economy in our community but advancements in technology have been so fast that any form of fair and proper regulation in this area has not been able to keep up. Online booking platforms such as Airbnb and HomeAway state that their industry is now adding $31 billion to the national economy. While some may question the accuracy of that figure, I wonder how much has been taken from the traditional but, more importantly, legitimate hotel industry—namely, an industry that exists in appropriately zoned areas and in appropriately managed ways. I also wonder what the social cost has been to residential neighbourhoods that are now, legally, being turned into quasi tourist zones.

As one of my constituents said recently, "People do not purchase a family home in an R2 low-density residential zone with the expectation of living next door to a private hotel or serviced apartment … These proposed arrangements will in effect throw our planning regulations out the window when it comes to the types of activities allowed in residential zones. The implications of this for communities, families and individuals could be detrimental in the extreme." I accept that the genie is well and truly out of the bottle, and I doubt whether we will be able to get it back in. This package of reforms will be reviewed in 12 months to determine its effectiveness, and I appreciate that the Minister has kept the review period quite tight. With some reservation, and pending consideration of amendments which have been foreshadowed by the Opposition and the member for Sydney, I support the bill.

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