Sydney city counillors are turning up the heat on Airbnb-style rentals, putting pressure on the state government to toughen restrictions on short-term inner city lets, according to a report in the Sydney Morning Herald.

Councillor Jess Miller has brought a motion before City of Sydney Council seeking to rein in commercial investors who operate multiple short-term rentals. If successful, the motion could pressure the state to further restrict the activities of landlords offering multiple short-term lets, while enforcing rules already in place, potentially returning more than 1,000 properties to the long-term rental market.

Although the NSW government has considered stricter rules for short-term rentals, such as tightening the cap on the number of days they can be rented and levying charges on holiday homes used in such a manner, it has yet to propose any concrete changes.

Sydney MP Alex Greenwich told the SMH that better regulation of short-term rentals to stop “the current manipulation of commercial operators will be the fastest way to unlock much-needed rental housing in the inner city”.

Ms Miller, a member of Clover Moore’s Independents, highlighted a council report that showed 68% of the City of Sydney’s short-term rental hosts had multiple listings, and many had 10 or more sites. Her motion claims that loopholes in regulations have led to a booming short-term rental market, in which commercial operators host multiple properties, and have encouraged absent owners to rent out their homes on limited-stay leases.

“The report’s financial analysis found short-term rental accommodation was more profitable than long-term rentals in many City of Sydney suburbs, despite the 180-day cap on non-hosted rental properties,” Miller said. “This is not just a fun way to share your house; this is a commercial undertaking.”

Poor data collection

Suburbs most affected included Millers Point, Potts Point and Waterloo, she said, adding that poor data collection hindered the creation of a proper record of short-term rental properties that were the owners’ principal home, thus making attempts to enforce a cap unfeasible.

The motion recommends improving record-keeping by linking the government’s short-term rental accommodation register, which records number of days booked in each short-term let, to Service NSW.

“The main thing we want the government to focus on is closing these regulatory loopholes that make Sydney the place to make money,” Miller said.

Greens councillor Sylvie Ellsmore added her support to a tightening of regulations, saying: “The City’s own research shows the 180-day cap on short-term rentals isn’t working. Not only aren’t the rules being followed, they don’t work when they are.”

However, despite NSW housing minister Rose Jackson stating that the government agrees that there is a need for change, she did not provide a timetable for a government response.

“We’re not pre-empting the outcome, but we’re working closely with stakeholders to ensure meaningful change,” she said. “This alone won’t fix the housing market, but it’s an important step in tackling structural issues.”