Owners of Sydney houses and apartments will be able to rent out properties all year round using services such as Airbnb under a loophole in the government’s proposed regulation of the sector, critics say.
Draft laws open for consultation provide an exception to the 180-day yearly cap the government had proposed for short-term residential rentals in Sydney. The exception is that when short-term tenants rent a premises for more than 21 days at a time, those days do not contribute to the 180-day annual cap.
Independent MP for Sydney Alex Greenwich has raised concerns about an exemption to Airbnb-style letting limits.Credit: James Alcock
This 180-day cap was described as a "fair and balanced approach" by former planning minister Anthony Roberts when it was first announced last June.
But member for Sydney Alex Greenwich, whose inner-city electorate takes in areas of high demand for tourist accommodation, described the proposed 21-day exception as a "gross betrayal".
"The new proposal to enable stays of 21 days or more not to count towards the cap is of serious concern, essentially providing a loophole to permit year-round short-term letting in premises that are zoned residential," Mr Greenwich said in his submission on the laws.
Mr Greenwich argues that property owners should be allowed to let premises for short-term holiday stays for only 60 days a year.
The existence of the 21-day exemption was revealed in a draft planning policy released by the government last month.
A spokeswoman for the Department of Planning, Industry and Environment said: "The proposed exemption reflects feedback that longer bookings tend to have fewer amenity impacts and are a key support to a mobile workforce."
Asked about the 21-day exemption, the public affairs manager for Airbnb, Julian Crowley, said: "We feel it makes sense that a night limit for short-term rentals should apply to stays that are in fact short-term.
"Typically, if someone is staying for longer than a period of three weeks, they are moving between houses, visiting friends or relatives or staying for work purposes."
At the same time, a proportion of inner-city residents are likely to be hostile to measures that would allow neighbours to rent out their apartments and houses more intensively.
John McInerney from the Millers Point Community Residents Action Group said his organisation was considering a legal challenge to the proposed exemptions.
"We have been told that this is a massive down-zoning of the traditional residential zone, and that this is being done almost without the knowledge of the majority of people who live in residential zones," Mr McInerney said.
One concern among those opposed to the 21-day exemption is that it will make listing properties on services such as Airbnb more attractive to homeowners – potentially removing dwellings from the regular rental market. For instance, Mr Greenwich's submission warned that, in the inner city, letting a home for half the year to short-term tenants could be more profitable than signing a long-term lease.
"Six-month leases could become the norm with tenants evicted during peak tourist periods," Mr Greenwich wrote.
The creation of the 180-day limit on short-term letting listings was itself the subject of fierce division within the government.
Former fair trading minister Matt Kean last May convinced cabinet colleagues to adopt a policy without any caps, though that policy was subsequently amended.
The Department of Planning spokeswoman said the department was currently considering submissions.