Crackdown threatened on number of guests at holiday rentals

The NSW government is threatening to end the big group getaway by capping the number of guests who can stay in short-term rental accommodation, such as an Airbnb, at any one time.

A discussion paper produced by the Planning Department identifies “limits on the number of guests that can use a short-term rental property” among several options for regulatory measures that could encourage owners to return their properties to the long-term rental market.

But accommodation companies rubbished the idea in submissions to the government’s review, with Airbnb noting a guest limit of two people per bedroom, or 12 people in total – whichever was lower – was first considered in 2016, before the current framework was established.

Airbnbs in destinations such as Palm Beach are a popular choice for large group getaways.Credit: Brook Mitchell

“Our view is that overly prescriptive requirements of this nature are unnecessarily complex and may have unintended practical implications,” Airbnb said. “It’s also worth noting that all Airbnb listings have advertised guest limits applicable to every reservation based on the capacity for the listing to safely and appropriately accommodate guests.”

The Committee for Sydney, an urban policy think-tank and lobby group, also encouraged the NSW government to restrict interventions to measures that would clearly encourage property owners to move their homes back to long-term tenancies.

“Whether people are renting short or long term, everyone loves getting their friends together,” the organisation’s chief executive Eamon Waterford said. “Instead of complicating this legislation by trying to solve a separate problem, let’s stick with the existing regulation to manage noise issues where they arise.”

The discussion paper describes the current regulatory framework for short-term accommodation in NSW as “purposely light touch”. Given the urgent affordability crisis, it also says the government’s focus has shifted “from addressing guest behaviour and neighbourhood amenity to the effects of short-term rental accommodation on the housing market and housing affordability”.

However, the paper also noted other jurisdictions had introduced occupancy limits to mitigate “effects on amenity” and restrict large gatherings.

“Any new requirements introduced would need to be enforceable,” it said. “They also should not outweigh the benefits of tourism activities done in short-term rental accommodation.”

NSW Housing Minister Rose Jackson indicated that a guest limit was still on the table. “Every part of the housing market is under the microscope for options to encourage a greater supply of long-term rental accommodation,” she said.

“The purpose of the discussion paper is to investigate policy levers to help unlock housing supply and affordability. A ‘guest limit’ is just one of the potential regulatory measures put forward by the NSW government for public consideration.”

Jackson said all the suggested regulatory and revenue measures – including a potential levy on short-term rental accommodation – were aimed at incentivising homes to be used as long-term rentals.

“The harsh reality is that rental vacancies are low and there are more than 55,000 people on the waitlist for social housing. All options are on the table as we continue to explore various ways to confront the housing crisis in NSW,” she said.

Consultation on the short-term rental review ended last week and the government is considering options.