Will Byron Bay’s Airbnb cap save this seaside paradise?

Airbnbs and other short-term accommodations in Byron Bay, on the NSW North Coast, will be limited to operating for just 60 days a year in a major policy shift aimed at increasing the supply of homes in the holiday hotspot.

A rising number of short-term holiday rentals has added strain in a region that has the highest rate of rental stress in the country – when people spend more than 30 per cent of their income on rent.

New limits will be imposed on some short-term rentals in Byron Bay.Credit: Danielle Smith

The rules introduced by the state government on Monday will apply to homes that are not located in areas with “high tourism appeal” or close to beaches.

The policy also does not affect hosted short-term rentals (where the host lives on the property during the stay), which can still be taken 365 days a year.

The rules are in response to an Independent Planning Commission report that said the social impact of the holiday home market was “more significant” in Byron Bay than other parts.

The commission presented 12 recommendations to the government to ease housing issues in the region. The government will only implement the cap.

“Adopting all recommendations from the IPC report at this time would have had broader implications for the whole short-term rental network across the state,” a spokesperson for NSW Planning Minister Paul Scully said in a statement.

There are 850 short-term rental properties within Byron Bay’s 60-day cap area, the spokesperson said.

The changes will come into effect on September 26 next year, following a 12-month transition. The government insists it will not pursue similar policies in other parts of the state.

Housing crisis laid bare

The housing crisis in the Byron Bay Shire is particularly acute. A count this year of people on the street found 300 experiencing homelessness, a 117 per cent increase on the previous year.

Byron Shire has 2280 short-term properties. They account for 97 per cent of unoccupied homes (homes that, during the census, were not occupied). Unoccupied homes make up 13.9 per cent of Byron’s housing supply.

“It will make a huge difference [in Byron Bay],” Byron Bay Mayor Michael Lyon said when the policy was first recommended. “Permanent residents are more beneficial to the economy as a whole.

“They are there 365 days a year, spending money more broadly and doing jobs that might not otherwise be done.”

Byron Bay Mayor Michael Lyon says the cap will “make a huge difference” in the holiday hotspot.Credit: Natalie Grono

Amy Hains, acting chief executive of Homelessness NSW, said the policy was a step in the right direction, but a lack of social housing was a major long-term issue.

“The rate of social housing in Byron Bay ... is 1.8 per cent, the average is 4.6 per cent in NSW,” she said. “The modelling shows it needs to be around 10 per cent to be a proper safety net for the community.”

People who are eligible for general social housing in the region have to wait an average of four-and-a-half years to find a home, she said.

‘A game changer for the suburb’

Owners are currently allowed to lease their properties for up to 180 days a year. But with their returns set to be severely cut, the government expects some to move their properties to the full-time market.

Cherie Barber, who owns five Airbnbs in Byron Bay but lives in Sydney, is supportive of the move.Credit: Oscar Colman

“You’re going to see a massive transition from Airbnb rentals to full-time rentals,” said Cherie Barber, a renovation expert and owner of five Airbnb properties in the shire. One of her properties is in a tourist zone, but she anticipates some others may be affected.

“The returns are too small. They’re going to be forking out more money from their properties every single month.”

She says she supports the caps – though she thinks the 180-day cap is better – because the change will stabilise the community.

“It’s going to be a game changer for the suburb ... It’s going to build a more solid community in Byron and surrounds, where businesses can rely on certain trades and [residents],” she said.

“It’s good for the residents, but it’s bad for investors.”

Airbnb expressed disappointment about the cap, saying short-term rentals weren’t the cause of the area’s housing crisis.

“A cap of 60 days goes well beyond even what the council had long been advocating for, and will have significant repercussions on the local visitor economy, harming jobs and small businesses,” the company’s head of public policy Michael Crosby said.

“Many of these homes are unlikely to ever be offered on the long-term rental market and will likely sit empty for the remainder of the year beyond the 60 nights they are able to be rented.”

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