Melbourne’s big call on Airbnb amid housing crisis

The City of Melbourne has made a huge call on short-term rentals amid the housing crisis and Airbnb is not impressed.

Melbourne City Council has made the huge decision to introduce a cap on the number of days per year properties can operate as short-term rentals, such as an Airbnb.

The decision made on Tuesday will see an annual registration fee per property and a day-per-year cap per property come into effect from February.

However, exactly how much that fee will be or the limit on days is yet to be determined.

“At the moment the proposition is 180 days, which is really on the more generous side,” Melbourne lord mayor Sally Capp told 3AW host Neil Mitchell on Wednesday.

“It’s the same as Sydney. It’s say far more generous than San Francisco, which is at 30 days.”

A consultation process will take place to determine Melbourne’s rules.

Ms Capp said the aim of the decision was to “flip” short-term rentals into long-term homes for people.

The City of Melbourne is capping the number days per year a property can be used as a short-term rental in response to the housing crisis. Picture: NCA NewsWire / David Crosling

Mitchell said it was a big step to tell property owners how they can use their properties.

Ms Capp responded: “We haven’t taken this decision lightly. Stepping in to impact private rights really is a big deal and that’s why the consultation is important.”

She said they wanted property owners “to be the heroes” in the housing crisis.

Ms Capp noted it was not the only initiative to drive housing supply but it was the quickest way to create more long-term houses.

According to the council, 14 per cent of Melbourne’s residential properties (about 4100 units) are actively used as short-term rentals, and almost half are rented out for 90 days or more each year.

Rental vacancy in the City of Melbourne currently sits around 0.8 per cent.

Melbourne Lord Mayor Sally Capp. Picture: Jason Edwards

Michael Crosby, head of public policy at Airbnb Australia, claimed the council report appeared to “exaggerate” the percentage of short-term rentals at 14 per cent, arguing “the number is more likely to be less than four per cent”.

The council got its data from analytics platform AirDNA.

He added a “whole home” listed on Airbnb may be someone’s primary residence that they list while travelling for work or holidays to offset the rising cost of living.

“Such homes are not going to be returned to the long-term rental market because the overwhelming majority of households in Australia are owner-occupied,” Mr Crosby said in a statement to news.com.au.

“As the cost of living increases, home sharing provides an economic lifeline for everyday Victorians in helping to make ends meet.”

Airbnb claims the council has exaggerated the percentage of short-term rentals. Picture: NCA NewsWire / Andrew Henshaw

He said Airbnb wanted to see the introduction of statewide frameworks rather than a council-by-council approach.

“The Victorian Government is best placed to manage the sector rather than 79 Local Government Areas around Victoria coming up with their own approach,” he said.

“Late last year, Airbnb proposed a series of measures which included the introduction of statewide registration schemes and codes of conduct in every state and territory plus support for a tourism levy.

“Statewide registration and data sharing would ensure the Victorian Government has transparency of the short-term rental industry as a whole and would allow for data-backed, evidence-based policy decisions. This is already in place in New South Wales and Tasmania.”

Mr Crosby said the decision to cap days per year would also threaten to restrict affordable accommodation options for travelling families.

News.com.au understands in Victoria, 84 per cent of Airbnb host accounts have only one entire home listing.

In July, the Australian Financial Review reported that records showed NSW’s rules limiting short-term rentals to 180 days a year had not been enforced once in nearly two years of operation.

The NSW Office of Fair Trading received over 550 complaints, but none resulted in a penalty, according to the outlet.

Byron Shire mayor Michael Lyon told AFR the 180-day cap was “a farce”.

“It does nothing and it was designed to do nothing,” he said. “It was designed to throw a bone to those people that were complaining about the lack of residential housing.”