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July 6, 2022

Peer review questions holiday letting impacts

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Byron Council’s planners are calling on councillors not to include an unfavourable Economic Impact Assessment (EIA) with their submission to the State government that seeks to cap holiday letting to 90 days for most of the Shire.

‘Anomalies’ and ‘questionable methodology’ are among the EIA’s claimed deficienceies.

In the upcoming report for the February 24 meeting, report authors Ben Grant, Shannon Burt and Natalie Hancock present the long-awaited report, Economic Impact Assessment of Planning Proposal for Short-Term Rental Accommodation.

In February 2019, Byron Shire received a temporary exemption from implementing the NSW government’s holiday letting rules, which recently came into effect across the State.

Staff say, in the report, the delay gave Council the opportunity to lodge a Planning Proposal that would ‘cap’ non-hosted short-term rental accommodation (STRA) to 90 days per year in most of the Byron LGA, except for certain precincts in Byron Bay, Suffolk Park and Brunswick Heads, where it would be permitted 365 days per year.

They say, ‘A conditional Gateway determination for the Planning Proposal was issued by DPIE (the department of planning and environment) on 24 June 2021’.

As part of the planning proposal, Council were also required to submit an Economic Impact Assessment (EIA); the results of which are presented in the staff report. 

Staff say the ‘EIA ultimately concluded that a 180-day per year cap across the entire Byron LGA was the preferred policy option from an economic perspective, as it will provide the most substantial benefits across the relevant stakeholder groups, while minimising detrimental impacts on the visitor market’.

Staff questioned the methodology used in the EIA, and referred to a peer review of the EIA, ‘which calls into question the validity of the report’s final recommendation’.

‘For example, the report has limited social impact assessment and there appear to be anomalies in the ratings applied to certain impacts and stakeholder groups’.

Fundamentally flawed

‘To address these concerns, and to gain a second opinion, Council commissioned Dr Peter Phibbs to undertake a peer review of the EIA. Dr Phibbs’ review concluded that while the EIA offers some useful material, the rating system used to produce the reports recommendation is fundamentally flawed and does not allow a fair or balanced comparison of each policy. He noted that although economic impact analysis can be a useful aid in decision making, it is not intended to be used as an evaluative tool by itself.

‘He also commented that the method used to compare each option is unreliable because no attempt is made to weigh the importance of the impacts on different stakeholder groups.

‘This means that benefits to the local community of less STRA is more than outweighed by the negative impacts to visitors of having to pay more for their accommodation’.

Staff say that given that the EIA forms part of the underpinning for the government’s decision making, it ‘will be decided on fairly narrow economic grounds by an external consultant’.

As such, staff recommend that councillors not update the EIA recommendations with the planning proposal at this stage.

‘Instead, it is recommended that the existing Planning Proposal, together with the peer review of the EIA, be forwarded to DPIE for further consideration’.

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