We’ve all heard a great deal about the sharing economy and how it’s impacting so many areas. According to the figures published by the World Economic Forum the sharing economy’s value to society has grown rapidly and continues to charge ahead.
For example, in the United States, the social value of Uber last year was equivalent to giving every resident $US20, regardless of whether or not they use the service. Uber Australia’s 2016 revenue was $36 million.
In its first four years, Airbnb built an inventory of 600,000 rooms; Hilton took about 23 times longer – 93 years (a saving of more than a lifetime). By 2025 in just a few years time the sector is estimated to generate sales of at least $335 billion.
Airbnb is very much a part of this trend and one that is having a direct impact on many aspects of the property market, so much so that the NSW Government has announced it’s own inquiry. The short-term accommodation industry and the community will be part of a broad consultation led by the NSW Government to address private holiday letting.
In the leadup to the inquiry Airbnb has been running an advertising campaign in support of its services and has even suggested sharing some income with strata schemes. While others have suggested that Airbnb activity is actually pushing up full-time rentals at a time of tight supply, so the race is on to secure public and government support.
In October 2016, the NSW Parliament Legislative Assembly Committee on Environment and Planning made a number of recommendations to the Government relating to planning matters and strata laws following its public inquiry on the Adequacy of Regulation of Short Term Holiday Letting.
Last week the Minister for Planning and Housing, Anthony Roberts, and the Minister for Innovation and Better Regulation, Matt Kean, said community and industry feedback on options was needed to identify appropriate regulations for short-term holiday letting as part of its response to the recommendations.
Minister Roberts is responsible for planning issues while Minister Kean is responsible for strata issues. According to Anthony Roberts The NSW Government is taking a long hard look at this area, and for many this will include how to manage the impact of Airbnb.
Given the demand for accommodation across NSW and Sydney in particular this area of policy has taken on increased urgency. The big task will be to find a balance between providing options for accommodation and residents being able to go about their daily lives. The end solution needs to support the best environment for residents, investors and visitors.
While the State Government has already received some recommendations, it is felt that the regulation of short-term letting needs much wider engagement with the industry and the community. So that any final model will enable accommodation options like Airbnb and others to continue whilst ensuring the amenity and safety of users and the wider community are protected.
For many people including Strata Managers and various management committees its acknowledged that this is a complex issue. The government will be releasing an options paper next month that will be keenly anticipated.
According to various statements the Government is focused on finding a common ground that effectively addresses the concerns of everyone involved.
The aim appears not to over-regulate the holiday accommodation market, but at the same time the rights of full-time residents must also be considered. The trick appears to be how best to manage what can be a complex mix of interests. The NSW Government’s options paper will explore a whole of government framework including land use and planning issues, and the full spectrum of strata management issues.
The option paper will be keenly anticipated and how individual property rights are respected will, I think, be a key and I suggest complex factor.