It’s Airbn-BS as families are ‘priced out by red tape’

Even in this crazy, mixed-up, high speed, disrupted world in which we live, some things never change.

One of them, sadly, is Airbnb’s determination to tug at our heartstrings by telling us that any restrictions on them are preventing “ordinary families” from making ends meet.

In their latest ads, they have shifted focus from little old ladies who need to be able to let a spare room to  Swedish backpackers or they won’t be able to pay their levies.

Now they are worried about all those working families who won’t be able to afford a beach holiday when the horrific new short-term holiday letting regulations come into force in NSW.

As you can see from the above ad in local papers in Sydney, directed at Planning Minister Rob Stokes, they are running a scare campaign based on the effects of  unspecified “red tape”.

So let’s clear things up and specify what the red tape involves. Basically there are three elements – a code of conduct, a register and fire regulations. Now, we can ignore the code of conduct (as will many of the hosts and guests).

The register – which the holiday letting industry has kindly offered to run themselves – will be a minimal cost.  Based on programs elsewhere in the world, you’d be looking at about $200 a year in fees, or $4 a week, a sum that isn’t going to bust anyone’s budget.

But it’s the fire regulations that are the kicker. According to this story in the SMH, it will cost over $1000 to bring a two-bedroom flat up to scratch with integrated smoke alarms, a heat sensor and signage.

It’s hard to argue against perfectly reasonable fire regulations that decrease the chances of people being  burned alive because they don’t know their way out of their flat, their floor or their apartment block.

It’s even harder to argue against that modest investment when you think that other apartment owners are being slugged tens of thousands of dollars to remove and replace cladding which has killed precisely zero people in a number of fires in our cities.

Again, the cost of fire regulations aren’t going to make much of a dent in the profits of a unit that’s being let for up to double what it would get in the residential rental market.

But it will deter a lot of renters who are sub-letting their units without the landlord’s permission.  And it may also put off landlords for whom allowing their apartment to be misused in this way was an easy choice, but for whom changing them to a quasi hotel room is a renovation too far.

Then there are the people who are thinking of dipping a toe in the market, and others who just want to rent their flat while they are overseas on an extended trip.

Whole-home lets – often properties taken out of the residential letting market  – are where Airbnb makes most of its money. And, we reckon, it’s also where unrestricted holiday lets do most damage to strata communities.

If you don’t believe us, talk to people who live in high-rises in the centre of Melbourne, where the holiday rentals are exploding because the state government seems to hate strata residents as much as they love those tourist dollars.

Meanwhile, spare a thought for those poor working families who can no longer take their kids to the beach, point to a unit block and say: “Hey kids, that’s where we used to live … until rocketing rents caused by online holiday lets drove us into the suburbs.”

Another day, another trashed house

All over the world, cities and countries are waking up to how unrestricted online holiday letting of residential homes has damaged communities.  The tide is turning everywhere in the world …  except most of Australia.

As this story relates, the news here just gets worse every day for Airbnb, the latest drama being $45,000 worth of damage done to a home in Box Hill, Melbourne that was used as a party house. Meanwhile a house in Perth rented through Airbnb suffered between $30,000 and $50,000 worth of damage after a party got out of control.

You have to wonder if the hosts had holiday-let specific insurance.  Because if they didn’t, according to this story, will be left high and dry to cover most of the repair costs themselves.

It’s all about the register

The reason for the Airbnb anti-red-tape ads blitz is that they are trying to head off the creation of a register of homes and possibly hosts in NSW, and maybe also in WA, as part of new regulations.

Meanwhile Airbnb say they are concocting their own check system for properties – a plan that some industry experts say would be impossible to implement and is merely a PR exercise, ahead of their proposed stock market float next year.

As reported earlier, despite a multi-million-dollar advertising campaign against regulations, 265,000 residents of New Jersey, just outside of Airbnb hotspot New York, recently voted in support of the city laws intended to curb out-of-control short term holiday lets in residential homes.

Among them are a compulsory register and a 60 nights a year limit on unhosted whole-home rentals.

“The whole debacle in New Jersey was brought on because Airbnb was opposing the registration system,” says Owners Corporation Network vice-chair Jane Hearn. “As for their proposed self-regulation proposal, Airbnb admits that they cannot physically inspect all properties – something that in NSW our local councils would do if the proposed reforms ensured that un-hosted STHL required consent.

“Registration of premises is the most innocuous of the possible options on the table but still they oppose it,” she says. “The ‘industry led’ proposal is not an option. There is nowhere in the world where the registration system run by the industry.”

Ms Hearn says submissions to the government from knowledgeable experts including planners, housing specialists and organisations like OCN are “full of a wealth of information and advice on how to create a better system.  Do they ever read them?”

“I am reliably informed that  Portugal, which is favoured by some industry insiders, is moving to a permit system,” she says. “It is vital that NSW requires Hosts (owner and tenants) to register the premises; and that  platforms and agents should not be permitted to list or advertise an unregistered premises.”

You can understand why short-term holiday letting companies object to a registration process and, at the very least, want to be able to run it themselves.  Last year when Japan introduced a compulsory holiday letting register, listings dropped by 80 per cent.

There, hosts have to register their properties with their local council and are given a registration number. Holiday letting websites are then forbidden from listing properties that don’t have a valid number.

“The registration of premises is a standard tool for controlling the use of private residential housing for tourist purposes,” says Jane Hearn.

“It is an essential and cost-effective enforcement and compliance tool, and it has the benefit of providing planners and local council with data. It will help to ensure that no premises are registered and listed that violate strata by-laws.”

Airbnb win

Meanwhile the holiday letting agencies have had a win of sorts in Queensland where a previous magistrate’s court ruling that Fairway Island gated residential community on the Gold Coast could ban short-term lets has been overturned by a Referee from the Office of the Commissioner for Body Corporate and Community Management (BCCM).

The original ruling was always considered of limited value as a precedent for other holiday letting challenges as the properties concerned came under a very specific type of community title.

In any case, Referee Stone from the BCCM has overturned the ruling and strata tragics can read his reasoning right here.

One interesting aspect is the precedents he chose to accept and those he preferred to ignore.  A High Court ruling from WA was ignored because it was a different sort of matter.  The decision of seven Law Lords of the Privy Council in London, he felt was directly relevant but disagreed with their findings.

Instead he went with a minor NCAT decision about a by-law in a Sydney suburb which wasn’t even defended by the owners corporation. Least said about all that, probably the better.

And another thing …

The SMH story is worth a read if only for the complaint from an Airbnb spin doctor that the government can’t just change the rules on people like this.  You mean, like when people bought and rented residential properties where the DA specifically prevented holiday letting, only to have it usurped by a megabucks American company determined to make a profit regardless of the social cost?