Own Goal? Thinking about the impact of the FIFA Women’s Cup on rental housing

FIFA Downunder is just a day away as the 2023 Women’s World Cup Finals are played across nine cities in Australia and New Zealand over July and August.  Sydney will host one of two opening games, and will host five final games including THE final  The FIFA World Cup will be the biggest sporting event in Australia since the Sydney Olympics in 2000.  It is truly a mega-event, and a really exciting opportunity to showcase football in Australia.

A mega-event of two halves

A megaevent is a cultural or sporting event that has key elements of being large-scale and incorporates at least a national profile and impact.  The FIFA Women’s World in Sydney will meet these  -  it is international; it will attract extensive international media attention, it is large ( over 370,000 will attend the last five games in Sydney alone, and this does not include  attending the  live screen sites) and will have a particular impact on Sydney during July and August.  Megaevents have economic benefits, but also can have significant impacts to communities. Studies of mega-events point to the need to both recognise the direct experience of the event itself, and the indirect legacy of the event.

Governments worldwide like mega-events because they have economic benefits - they bring in revenue and jobs. They can also be a fantastic experience, with crowds supporting their team, enjoying the spectacle and a community spirit. For most Sydneysiders a successful FIFA Cup will be a victory for the Matildas and goals for Samantha Kerr. For NSW a successful FIFA Cup means more international events in Sydney, and ultimately more exposure and revenue for the State and businesses.  But mega-events do also have consequences.  The FIFA Cup is an opportunity to document the impacts of an international mega-event and consider what planning instruments, regulations and authorities will be needed in the future to minimise negative consequences and ensure all residents can enjoy their benefits. 

Keeping an eye on the housing ball

One of the clear impacts which was raised around Sydney's experience with the Olympics as well as identified ahead of the upcoming Brisbane Olympics and recently cancelled Melbourne Commonwealth is the loss of available housing. While we can be excited about the event itself, it's also imperative to understand how megaevents impact on local communities to develop better planning and regulation to ensure the supply of housing and sustainable local communities.

Professor Nicole Gurran has written much about the challenges to preserving affordable housing, noting that "when landlords ‘host tourists rather than residents, housing supply is depleted, rents rise and neighbourhoods change". She shares our position that stronger regulation is needed to address the loss of homes. 

An international tournament of holiday lettings

The issues is that all the visitors, athletes and supporters, need somewhere to stay. Some will stay in formal hotels but there likely isn't enough for everyone. Short term rental accommodation (STRA) is the other alternative, STRA is acknowledged as causing housing problems across the globe, including in NSW. There are many ways that STRA is being regulated to try and prevent harm. A brief review of the internet of responses to STRA’s around the world reveals the following:

• Amsterdam: To operate an STRA, the owner must obtain a vacation rental permit and pay a tourist tax to the city.  The premises can be rented for a maximum of 30 days per annum and to a maximum of four people.  The regulations distinguish between a short-stay as compared to short term rental for international students.

• Paris: New regulations were introduced in 2017, STRAs were limited to less than 30 days, there is a specific government department to regulate STRAs, and operators need to pay a tax and social security.
   
• Berlin: Operators must be registered with the relevant district authority and hosts must have a specific permit to rent out the entire premises.  There is no limits on how many nights a primary home can be rented; but a second home is limited to no more than 90 days. 
  Fines are significant and up to 500,000 euro ($617,000).
  Bloomberg reported that after the regulations were introduced in 2016, 2500 apartments were put back on the housing market. In 2018 the regulations were relaxed but fines were increased.
   
• San Francisco: In 2015 the Office of Short-Term Rental was created.
  Operators must be a resident of San Francisco and only host in their primary residence.  The premises must comply with the current city building code, and can be let for no more than 90 days.  
  The operator must have a business number, pay tax and a 14% Transient Occupancy Tax for all stays under 30 days.
   
• New York: Regulations were due to be introduced in January 2023 amid news headlines that the regulations would see 10,000 homes delisted.
  STRAs will be regulated by the Office of Special Enforcement, operators must be registered with the City, no more than 2 people can be hosted and premises must meet current safety codes.  Hosts must reside on the premises with fines between $1000 and $5000.
   
• New Orleans:  New regulations are due to commence in July 2023, and have been eased due to opposition.
  STRAs were to be limited to 1 per block and allocated by lottery.  The regulations were amended so that operators could notify neighbours within 100 feet, call a neighbourhood meeting and if there is agreement the City then has 60 days to make a decision.  The amendment will allow an additional 3 STRAs per block.
  The Chief Zoning Officer acknowledged there are thousands of illegal STRs in New Orleans  and there are not enough hearing officers to make decisions about potential violations.
   
• Tasmania: Introduced the Short-Stay Accommodation Act, which requires the platform operators to provide quarterly financial reports and that some information on listed properties be publicly available.

What about the home team?

Here in NSW, STRA is covered by the Fair Trading Amendment (Short-term Rental Accommodation) Act 2018 and by our planning laws.

Briefly an owner of STRA is required to:

• Must register premises with Department of Planning Industry and Environment STRA register before posting on a booking platform;
• If the STRA is non-hosted there is a limit of 180 nights in Greater Sydney and other local government areas as specified, with most of the regional NSW having no limit. (Byron soon to become a notable exception at 60 nights);
• If hosted in the person's residence there are no limits on how many nights per annum can be hosted;
• Premises must be covered for third party injuries and death and must comply with the fire safety code;
• Complaints can be lodged with the Commissioner Fair Trading, and if upheld then either the booking platform, host or guest can be placed on an exclusion register preventing them from participating,

The Tenants' Union has advocated for many years now that holiday lettings regulation in NSW should:

• require planning permission to change the use at no more than 60 days for at least un-hosted and empowering and requiring councils to consider affordability when considering the change-use application 
• create a register of lettings with the results made publicly available to allow assessment of impacts
• ensure renters are not being evicted using 'no grounds' in order to convert to holiday lettings

The current season

Registered short-term rentals in NSW surged 42% since 2021, an increase of 13,000. AirDNA said in May 2023 that “Short-term rental volumes are still half what they were in April 2019” and suggests that there has been a partial bounce back since COVID.  This suggests there is potential for significantly more that could become listed over time - or encouraged back by the demand from mega-events.

The Guardian received figures from NSW Department of Planning for the register that began operating in 2021. Planning recorded current figures as 45,209 properties listed; and of these over 30,000 are non-hosted accommodation options.  Some areas across NSW carry a very heavy burden burden.  The Shoalhaven LGA shows 4175 listings which accounts for 7.5% of all private dwellings in the region.  In Byron Bay there are 2440 listings which accounts for 16% of all private dwellings.  The Central Coast recorded 3307 listings and Sydney’s Northern Beaches recorded 2514 listings. Unlike in Tasmania, these numbers are not routinely made public, something that is essential in assessing the impacts.

Mega events will keep coming to NSW.  The NSW Premier has announced that Stadium Australia will be available for 20 events (other than sporting fixtures) per annum rather than the 4 annual events currently allowed.  The Taylor Swift concerts in February 2024  have been given major event status, which puts in place limitations on tickets being scalped. Those attending will not be limited to NSW residents; they will include interstate and overseas visitors.  To meet the demands of tourist accommodation and megaevents we need better planning and regulation, that makes sure we don't lose the communities we love so much.

In follow-up blog posts we will dig further into some more of the potential impacts and policy questions that arise. In the meantime, enjoy the football!