Submission: Regulation and supply of short-term rental accommodation

01/03/2024

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The Tenants' Union appreciates the opportunity to provide feedback and recommendations concerning short-term rental accommodation regulations in NSW.

The current regulations are fairly permissive. They primarily consist of restrictions on the length of stay, known as day caps. Additionally, there are some basic requirements regarding fire safety standards, registration of premises and registration fees, and an avenue through Fair Trading for lodging complaints. These regulations have been in place since 2021. It is timely to now reassess the regulatory framework to determine whether existing regulations are meeting their intended goals and identify any additional measures that may be necessary. The recommendations we provide in this submission aim to address the current challenges identified in the Discussion Paper, safeguard community interests and address affordability concerns and the broader impacts on the housing system.

Recommendations

  1. Day caps for non-hosted accommodation be introduced and apply across all of NSW. Day caps be lowered to a limit of between 30 to 60 nights in any 365 day period. Recommendation
  2. Local Councils be able to vary the Day Cap limit (up or down) where a threshold limit is met and the Council is able to demonstrate the positive economic and social impacts for varying the Day Cap.
  3. Appropriate thresholds be set with reference to key indicators such as vacancy rate and proportion of short-term rental accommodation (STRA) to total residential dwelling stock in the local area
  4. STRA be required to apply for change of use of properties or other appropriate planning permission under the 'development application' process through Local Councils
  5. Increase transparency and data about STRA listings by providing open access or otherwise making publicly available information provided to the STRA register, and expanding information collected to include more data on lettings.
  6. Prioritise rental reforms to introduce reasonable grounds for eviction, replacing the current 'no grounds' provisions for those in periodic and fixed term tenancy agreements in NSW renting laws
  7. Introduce a levy on non-hosted STRA, holiday homes and vacant residential properties via land tax
  8. The levy applied should be set high enough to alter incentives for property owners, and encourage them to instead let their properties for long-term tenancies, and account for and cover appropriately costs to government for any enforcement and compliance activities.
  9. Remove thresholds for land tax for STRA properties, and properties that are vacant properties. Adopt a minimum $10,000 per annum levy to be applied to all empty homes or short-term rental accommodation premises, with a 3% levy set above $300,000.
  10. Any additional revenue generated should be used to fund housing and homelessness supports, with a focus on the broad range of organisations providing direct frontline support and advocacy to people our housing system has failed to provide with safe, secure homes.
  11. Input from key stakeholders, including local councils, should be actively sought by the responsible agency/ies given responsibility for determining:
    • Day Caps
    • Threshold for Variation of Day Caps
    • Threshold for STRA levy via Land Tax
    • Land Tax rate for STRA