Further to last week’s interview with Greens mayor Simon Richardson, The Echo presents the second instalment – where is Council’s holiday-letting strategy at?
There’s no legislation to stop it; as much as Matt Hartley bangs on about it, there’s actually nothing.
For example, Randwick [in Sydney] has about 3,000 holiday-let properties.
The state government isn’t going to let us ban holiday letting even if we wanted to.
The precinct model was the fairest model I thought – but there was no appetite by the holiday-let organisation, the victims of holiday let or by the state government.
So that was shelved.
I have a friend who holiday lets her garden flat at her Brunswick Heads home, but would like to bring it up to speed to long-term let it. She says holiday lets are a pain to manage.
She makes about $20,000 a year for it, but it’s the difference between living there and not.
And then there’s $5,000 for cleaning etc. She says if she made improvements with it, she could charge more for it. So there’s that aspect.
There’s another guy who owns and holiday lets a few 70s-style brick units also in Brunswick Heads. He’s making $40,000 on each of those units. That’s very different from a garden flat.
Another friend lives in Byron, and he’s holiday letting a unit in Kew [Melbourne].
He says it’s easier for him to AirBnB than permanently rent. This a global thing and if we think we can stop it, we are kidding ourselves.
He’s got mates who are buying house after house in Byron and then flipping them. [For example] they started by building a secondary dwelling at the back of their house. That was so successful that he moved into that and rented out his house.
Destroying the suburbs
He then went on buy the houses around him and is doing the exact same thing with those homes.
My mate said to him, ‘You are destroying this suburb. If you and your mates keep doing this no-one will live here.’
It doesn’t register until someone says that…
Another friend who is a real estate agent says people are making $150,000 a year holiday letting.
So when we are talking about holiday letting and housing stock, there are all these dynamics.
We are never going to stop holiday lets that are bringing in $150,000 a year.
For someone from Sydney who buys a $2m house on Lighthouse Road, they will holiday let it – and then, on average, they will stop doing that and move there in five or six years. That’s what we know around the country statistically.
The horse has bolted on those ones and I can’t see any way we can stop that.
But we’ve been told there’s nothing stopping us from managing holiday letting – ie making someone register – and then we charge say $30,000 for a licence fee.
That amount could be split, for example, if it’s your whole house, like AirBnB split it.
It could be $20,000 for a home and a granny flat $10,000.
So that person in Brunswick Heads who is nearly at the point of turning her granny flat into a permanent rental would do that, as there isn’t the financial incentive for her to holiday let.
So all of those types of properties will go to long-term rent.
And that guy who’s making $40,000 in Bruns is only making $10,000 or $20,000. That might mean it’s better for him to long-term rent the properties.
I pitched this idea to staff to look into this and see if we had jurisdiction to set whatever fee we want.
The state government has some control, but with things such as fees and charges, they had no control. So I asked if we could explore that.
Social interest
The report back basically said no, but as long as you can justify it – and one of the justifications was ‘in the social interest’.
That alone is enough.
But we are going to have to employ more planners to deal with holiday-let DAs; we’ll have to employ more compliance people… I would argue we will need a big legal fund to defend ourselves.
Cr Richardson said that in the past, Council’s legal challenges for holiday-letting compliance had resulted in a high cost to ratepayers.
We would choose the most obvious, irrefutable, tightest legal case. We would then take them to court. Two-and-a-half months in, before a judgment, they would withdraw and say they would stop doing it. We then lost our $50,000 [in legal costs] and then we would try and do it with another one.
Two years and $300,000 later, we had no finding… so we certainly don’t want to go down that path again.
As far as legally proving a holiday let, we would need to actually pay staff to go and book a holiday let. You would then need to interview people coming in the next day.
Council’s short-term rental accommodation (STRA) policy was sent to the state government by the previous council. What’s happening now?
We haven’t heard back from the government yet on our [updated STRA] plan, but we are hoping to hear in the next few months.
Previously, the state government rejected the ‘three strikes and you’re out’ rule and a few other things in our plan.
As holiday letting regulation is already happening in other parts of the state, we don’t expect any major issues.
Interestingly, two other councils were allowed to include the ‘three strikes and you are out’ rule but the state didn’t agree for us to have it.
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