What does the new crackdown on Airbnb mean?

Ross Greenwood speaks to better Regulation Minister, Matt Kean, as the State Government has revealed proposed laws which will restrict letting through sites like Airbnb to 180 days in cities.

Introduction:What does the new crackdown on Airbnb mean?

Ross Greenwood:  Welcome back to Money News. Right around the country. Who should have the right to come into your apartment block? Well, that’s something that the New South Wales Government has been grappling with over a period of time. This is in regards to short-term holiday letting. You know about say Airbnb or say, for example, another alternative is Home Away which was formerly called Stays, another popular type of site.

As a result, the New South Wales Government has today tried to create rules around short-term holiday letting. Now effectively, it comes down to the point as to whether the person who owns the apartment is there or not. It also comes down to the fact as to where the actual apartment he is and how long that apartment will be let out. Let’s get Matt Kean who is the New South Wales Minister for Innovation and Better Regulation and I guess this decision involves both of those things. He’s on the line. Many thanks to you Matte.

Interview with: Matt Kean, Better Regulation Minister

Matt Kean: Ross, thanks for having me.

Ross Greenwood:  Okay. There would be a whole lot of people inside apartment blocks who think that their strata title, body corporate board would know better than the state government when it comes to who’s coming into the apartment block and who’s not.

Matt Kean:  Well, that’s exactly why we’ve introduced a proposal today, Ross. It will allow owners corporations to adopt a by-law with a 75% majority preventing short-term letting in their block. This will apply as an option if the host does not live in the unit that they’re letting out. We understand that owners’ corporations play an important role in the governance of strata gain and this changed to the bylaws available for strategy gains in New South Wales will empower owners’ cooperation to have more of a say.

Ross Greenwood:  Okay, so what happens if a person defies their own body corporate and actually lets out that property in defiance of an order of 75% of the other owners?

Matt Kean:  Well, there’ll be penalties that apply. We’re acquiring all platforms, hosts, guests, people that use these short-term holiday letting platforms to sign up to a mandatory Code of Conduct. If people want to breach that Code of conduct and these new laws, then there’ll be significant financial penalties including strikes, which will prohibit these platforms being used for up to five years.

Ross Greenwood:  Okay, so say, for example, the other option is as to how long let these particular apartments might be actually rented out because they’re mostly going to be apartments or maybe in some cases, it might be townhouses but broadly apartments, let’s call it that. You’re actually trying to limit the amount of time which they can be let out in total?

Matt Kean:  What we’re saying, we’re going to allow short-term holiday letting as an exempt development at 365 days per year when the host is present. You can rent out your spare bedroom and that’s not a problem at all. What we’re saying is when the host is not present, it limits the host to rent out properties by short-term holiday letting of 180 days will apply in Greater Sydney and for 365 days in all other areas of New South Wales. That means councils outside the greater Sidney area, they’ve got the power to decrease the number of days down from 365 days to 180 but the threshold can be no lower than 180 days per year.

Ross Greenwood:  Okay, Sam McDonald who is the country manager for Australia for Airbnb says New South Wales is the beating heart of the Australian Airbnb community representing one-third of all Airbnb listings and one-third of all guest arrivals. Now, they’re calling this a watershed moment for the community and they’re saying basically it’s good news that the New South Wales Government has done this. The fact that they’re giving it a big tick might suggest that some of the body corporate owners might not be necessarily as happy as what Airbnb will be.

Matt Kean:  Well look, Ross, to land this policy was consulted extensively. This has been going on for three years. We’ve had a parliamentary inquiry. We’ve had an options paper. We’ve had over 8000 submissions to that options paper. We’ve with consulted with my parliamentary colleagues and I’m confident that we’ve landed this policy to get the balance right between the interest of private property owners, those that live in strata and those that wish to use short-term rental platforms like Airbnb. I mean, the reality is that these platforms like online booking platforms like Airbnb and Stays, they contribute about $31 billion to our tourist economy so we want to see that tourist economy continue to thrive. We also want to give protections to owners corporations to allow them to have a say in what can and can’t happen in their apartment.

Ross Greenwood:  Okay, explain the two strikes and you’re out policy because quite clearly, behavior is important and so, therefore, if an apartment is being used as a party house, well, that’s going to be a fundamental problem so how do you police this?

Matt Kean:  Ross, these will be the toughest laws in the world. We’ve had that concern today by Airbnb when they have been out thinking about these things. I mean, what we’re proposing is a two strikes and you’re out policy where hosts or guests who commit two serious breaches of the code within two years will be banned from all platforms for five. Any platform that wants to breach those laws will be faced a significant financial penalty.

Ross Greenwood:  Okay. Who deems the behaviors as to whether the behavior is acceptable. What’s acceptable to one person in an apartment block is thoroughly not acceptable to another. I mean, the fact that I might actually tolerate a little bit of noise and a party going on next door means that the person on the other side is thoroughly abhorred about the fact that that activities taking place so who determines what is good behavior and bad behavior?

Matt Kean:  We will introduce a mandatory Code of Conduct which hosts, guests and platforms who we’d require to sign up to. All industry stakeholders, interested parties will be participating in developing that code of conduct, then Fair Trading will appoint independent adjudicators to fairly assess complaints and strikes will be recorded on an exclusion registered maintained by Fair Trade.

Ross Greenwood:  You know that Matt, there are some dead set knacks in a lot of these body corporates and in apartment blocks. I mean, people who you and I probably wouldn’t want to live alongside because they’re so pedantic and really, effectively they’ll try and knock off any bit of fun that’s taking place in their apartment block if it causes even an ounce of noise. I mean, this is this is going to be tough to police.

Matt Kean:  Absolutely, that’s why Fair trading will appoint independent adjudicators to fulfill the assess complaints. Strikes will be recorded by Fair Trading on an online register so we’ll be able to monitor what’s going on. We’ll be collecting data from all the providers which is a new thing as part of this policy to be able to police this and enforce people’s rights.

Ross Greenwood:  It’s the first time, where’d you pick up a lot of these ideas from? Did they— have they been done elsewhere overseas or is this something you’ve created yourself?

Matt Kean:  Look we’ve considered what’s happened overseas–

Ross Greenwood:  What’s the best example of what you’ve seen overseas?

Matt Kean:  Well, there’s no jurisdiction that’s quite like Australia. I mean, strata is far more prevalent here in New South Wales than it is in other overseas jurisdictions. We’ve considered what’s happened in other overseas jurisdictions, we’ve consulted broadly across the community and Ross, I can say as the Minister for Fair Trading, I’ve used Airbnb and my experiences have also helped shape my thinking on this so what I think we’ve done is land a policy in a position which gets the balance right between supporting the needs of the sharing economy, giving consumers more choice whilst at the same time cracking down on bad behavior and giving owners corporations the ability to regulate what happens in their building.

Ross Greenwood:  Good on you, Matt. Matt Kean is the New South Wales Minister for innovation and Better Regulation. We’ll take your calls on that, especially if you own apartments and therefore you might be using Airbnb to try and get a bit of extra income. If you’re actually in an apartment where you might leave and go away and therefore back rent your apartment on Airbnb or something else such as I’m Away or indeed if you’re in a situation where you just don’t want to have any of this in your apartment block

 

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