Sydney has too much to lose from ‘populist’ rental crackdown that won’t fix homelessness

Restricting Sydney’s short-term rental market won’t fix homelessness — it’ll hurt jobs, tourism and the economy, writes Business Sydney’s Paul Nicolaou.

Curbing Sydney’s short term rental accommodation sector to solve homelessness is a “lose-lose-lose” proposition for Sydney.

Forget that many organisations and individuals, including Business Sydney, made submissions to a pending NSW government review of the sector.

On the face of it, with no report forthcoming after more than a year, the government appears to have wasted their time and energy.

But this is one of those cases where some decisive inaction is a better option than turning the short-term rental market on its head.

We have full respect for the sincerity of Homelessness NSW and its concern for people who can’t find affordable rental accommodation or for the hundreds of people sleeping rough in our city every night.

Business Sydney executive director Sydney Paul Nicolau says curbing Sydney’s short term rental accommodation sector to solve homelessness is a “lose-lose-lose” proposition for Sydney. Picture: NewsWire / Gaye Gerard

But its quest to transfer more short term rental accommodation to the general rental pool will not put a dent in homelessness.

As Business Sydney noted in our submission, it won’t and, even if it were to happen, the visitor economy would suffer, jobs would be lost and more people would be caught up in the homelessness crisis.

Our submission also referred to an influential study by Oxford Economics Australia on the contribution of leading short term rental supplier Airbnb.

According to the study, Airbnb contributed $13.6 billion to Australia’s GDP and supported nearly 95,000 jobs in the year to March 2023.

It accounted for nearly 8 per cent of the Australian tourism industry’s contribution to GDP — up from five per cent in 2019 and was associated with one in every 14 jobs generated by tourism in Australia.

Premier Chris Minns is conducting a review of the short-term rental accommodation sector. Picture: NewsWire / Gaye Gerard

There was also the multiplier effect with Airbnb guests spending $12.3 billion in restaurants, retail stores and transport.

Sydney could ill afford to lose its significant share of this economic bounty.

The solution to the housing crisis is to be found elsewhere. We have to “build, build, build” — more build-to-rent developments, more social housing and more affordable housing, especially for essential workers who can’t afford to live near where they work.

And the answer to rough sleeping isn’t to be found in crippling the availability of short term rental accommodation in the visitor economy.

Rough sleepers need immediate crisis accommodation — a city building could be repurposed for that.

Premier Chris Minns and Housing Minister Rose Jackson should hasten slowly on the review of the short term rental accommodation sector.

Sydney has too much to lose from populist measures that do nothing to solve homelessness.

Paul Nicolaou is executive director of Business Sydney