Eurobodalla holiday houses : The BIG picture
The HOT topic at the moment in Eurobodalla is are spiralling house prices, the shortage of any long term rental supply and the discussions around the major shortfalls in affordable housing. In 2016 there were 23,446 dwellings. Only 16,450 were privately occupied. This means that on Census night (Tuesday, 9 August 2016) there were 6,996 houses that stood vacant representing 30% of our housing stock. These 6,996 empty houses are generally holiday homes, investment properties, on-line rentals and second homes. Look up and down any street in the Shire and you will see them. Many remain closed for winter and in summer they come unto their own, festooned with beach paraphernalia, the buzz of holiday cheer and, in many cases, the sound of dollars being injected into our local economy. There are some now saying that the owners of these properties should be brought to task. There has long been lobbying that any property that is rented as short term rental accommodation, such as Stayz or Air BnB, should only be allowed to do so if granted a permit. That permit would consider the location of the premise in relation to surrounding homes and be granted only if there was compliance to the same rules of safety required of hotels and motels. Commencing on November 1st 2021 the NSW Government will implement a new statewide regulatory framework for short-term rental accommodation (STRA), which will include a new planning framework, fire safety standards for STRA dwellings and a new Government-run STRA Register. This new framework will compliment the mandatory Code of Conduct and changes to strata legislation made by the Department of Customer Service. The new STRA planning rules won’t take effect until 1 November 2021 to ensure STRA hosts, councils and industry participants have sufficient time to familiarise themselves with the new rules before the policy takes effect on 1 November 2021. What does this mean for Eurobodalla home owners who rent out their homes on the Short Term Rental Accommodation? The first thing they will need to do is to determine what sort of Host they are: Definitions and more information
hosted short-term rental accommodation means short-term rental accommodation provided where the host resides on the premises during the provision of the accommodation. (Note: ‘Hosted’ means the owner needs to be living on the property but not necessarily in the home being rented, for example homeowners who live on a property with a granny flat are able to rent out the granny flat 365 days of the year.)
non-hosted short-term rental accommodation means short-term rental accommodation provided where the host does not reside on the premises during the provision of the accommodation.
Then there is the requirement that dwellings proposed to be used for STRA are required to comply with the new fire safety standards.
The fire safety standards are enacted by the EP&A Regulation which: - introduce minimum fire safety standards for STRA dwellings and associated penalty notice offences for non-compliance;
- require all STRA dwellings to comply with the relevant fire safety standards, including the requirement for all STRA dwellings to an evacuation plan and interconnected smoke alarms; and
- require all STRA dwellings to be registered on the Government-run STRA register to confirm compliance with the new fire safety standards. STRA hosts will also be required to ensure each STRA dwelling provides an information sheet on general emergency advice that provides advice to STRA guests regarding:
- what does a total fire ban mean and what you can and can’t do on these days?
- what do different fire warning levels mean?
- information on emergency service broadcasts and contacts. If the above are NOT in place then the Short Term Accommodation Rental is breaking the law and anyone renting the property can report them. But report them to who? A Government-run STRA Register has been developed that integrates with booking platform providers. Starting on November 1st 2021 registration on the STRA Register will be a mandatory requirement before you can undertake STRA in NSW and requires the registrant to confirm the STRA dwelling complies with the relevant fire safety standards. The STRA Register has been available from 10 April 2021 to allow hosts to register their dwellings before the new planning rules commence on the 1 November 2021. Registration of a STRA dwelling will incur a one off $65 registration fee and an ongoing $25 annual fee.
The STRA Register tracks the number of days a dwelling is used for STRA, which is assisted through registration data collected from booking platform integration. This includes non-hosted STRA activities to assist with monitoring and compliance with non-hosted STRA day limits.
Access to the department’s STRA Register will be provided to all NSW councils and the Department of Customer Service to assist with monitoring and compliance. The new regulatory framework seeks to ensure local communities continue to enjoy the economic benefits of STRA, while managing potential adverse impacts. Stayz Corporate Affairs Director, Eacham Curry said “Stayz reiterates calls for the NSW Government to work with industry and the community to ensure the success of the new regulations for short-term rental accommodation.” Stayz’s key state-wide policy recommendations for the NSW Government are: Compulsory and simple registration for all properties listed on a short-term rental accommodation platform, that will help inform sensible and easily understood policy. The creation of a mandatory short-term rental code of conduct for owners and managers – including a three strikes rule for those who do not meet the standards.
And what are those potential impacts? Fortunately for those who might live in a street surrounded by Short Term Rental Accommodation that sees a quiet neighbourhood transformed into party central (as has been the case now for many years in Byron Bay ) there is a now a Code of Conduct for the Short-term Rental Accommodation Industry and supporting regulation
On 18 December 2020, the new mandatory Code of Conduct and the accompanying Fair Trading Amendment (Short-term Rental Accommodation) (No 2) Regulation 2020 commenced.
The Code creates new minimum standards of behaviour and requirements for all industry participants, including:
For information about the new code, visit the NSW Fair Trading website. The code creates new disciplinary actions that NSW Fair Trading can take, including listing non-compliant participants on an exclusion register. This means that Hosts can be excluded and guests can be excluded. Every Short Term Rental premise will have a Registration Number and a complaint can be lodged and considered by anyone who has a valid complaint.
What will this mean for Eurobodalla? The new legislation will demand that those who have property on the Coast that they wish to let our to the Short Term Rental Accommodation Market bring the premise to a safety standard and register the property with Fair Trading. The Registration Platform will also play a role in cross referencing bookings with other agencies that will have the effect of forcing owners to declare income from their rental properties. The ease of being excluded might also drive investors to move their properties from the large platforms to local real estate agents who can filter guests and hosts to ensure compliance with the new rules.
None of the above is required if you decide to rent your investment home as a full time rental or if the house remains a family holiday house for family purposes. It will take a very brave Council Candidate to suggest an increase in rates for a Short Term Accommodation Rental property. Several councils, including Eurobodalla, told IPART during the “Review of the rate peg to include population growth” that is currently underway that they have significant numbers of residential properties in their area used for Airbnb and other holiday lettings saying "Although these properties are operated as a business, they are charged residential rates. Councils indicated they need flexibility to charge business rates for these properties." If such a consideration to mandate a STRA rate was made by Eurobodalla Council, and staff recommended against such a measure, then it would be essential for those staff to declare if they owned Short Term Rental Accommodation properties within the shire (as is known) else face an ICAC complaint.