Think Long And Hard Before Banning Short Stays

Written by:
28 November 2017
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As in so many industries, the so-called “sharing economy” has brought seismic change to the tourism market.

The rise of platforms such as Airbnb and Stayz has seen a massive expansion in short-stay accommodation, offering guests everything from a blow-up mattress in somebody’s living room to a 10-bedroom holiday house.

Consumers have been the biggest winners from this digital revolution in tourism, with unprecedented choice when it comes to booking accommodation. Property owners have also benefited from lucrative new income streams.

But as usual, the law has not kept up with this new technology.

That point was proved (this week) by suggestions that a “widely ignored” provision of NSW strata law could be used by disgruntled neighbours to prevent apartment owners from renting out their properties.

“Tell landlords they’ll be taken to Fair Trading for the obligatory mediation, then to the NSW Civil and Administrative Tribunal for fines for every new resident who isn’t registered (with the body corporate),” one blogger wrote. The fact that obscure and anachronistic state regulations can be used to interfere so dramatically with property rights should be of great concern.

The law is outdated and needs reform. But in responding to the growth in short-stay accommodation, politicians must be careful not to burden operators in red tape that could kill the industry.

So far, state and local governments have thrown up a mixed bag regarding possible reforms.

Supporters of a crackdown on short-stay accommodation cite inconvenience and annoyance to residents. The most common grievance is the use of properties as party houses for bucks’ nights and schoolies’ groups. But there are already laws dealing with these types of problems.

Noise complaints can be made to police. Civil remedies are available through tribunals and courts.

The solution is to enforce existing rules, rather than adding red tape to the short-stay industry.

The majority of responsible providers and guests should not be punished for the sake of a tiny number of problem renters.

If anything, governments should aim to deregulate the accommodation industry.

Commercial operators, such as hotels and serviced apartments, complain — rightly — that they are subject to rules and regulations that short-stay providers are not.

Requirements include minimum bedroom floor space, registration of guests and various health and safety standards. Laws such as these should be reformed to impose the lowest possible burden on providers, and applied universally to create a level playing field between commercial operators and short-stay providers.

But one thing that governments should not do is engage in knee-jerk responses that would overregulate and kill the short-stay industry.

Services such as Airbnb and Stayz are good for consumers and the tourism sector.

It would be sad to see burdensome red tape render them unviable.

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