Holiday rentals in Byron Bay should be limited to 60 days a year, the Independent Planning Commission has found in advice that could pave the way for a broader crackdown on short-term rentals across the state.
The commission recommended the 60-day cap on non-hosted short-term rentals as the “trigger” needed to push dwellings back onto the long-term rental market in the Byron Shire, which has the highest rate of housing stress in NSW and the highest proportion of short-term rentals, at about 8.5 per cent of all dwellings.
Byron Shire Mayor Michael Lyon welcomed the recommendations and said other councils struggling with balancing tourism and housing affordability would be encouraged by the advice, which Planning Minister Paul Scully will now consider.
“It will make a huge difference [in Byron Bay], right across the board,” Lyon said. “Permanent residents are more beneficial to the economy as a whole.
“They are there 365 days a year, spending money more broadly and doing jobs that might not otherwise be done.
“Certainly, a lot of other councils were looking to this decision, and I’m sure they will be heartened by it.”
The council has been seeking state planning approval to impose a 90-day cap on short-term rentals in most of Byron Shire, and former planning minister Anthony Roberts had sought the commission’s advice on the matter.
Under the commission’s recommendations, any owner that wanted to rent out their Byron Bay property for short-term stays, for more than 60 days a year, would need council approval to do so.
The commission noted the social impact of the short-term rental market was “more significant” in Byron Shire than in other parts of Australia, given the high proportion of properties available for holiday letting and the region’s issues with housing affordability and availability.
Byron Shire has the highest level of rental stress in the state, according to the 2021 Census. Half its tenant households spend more than 30 per cent of their income on rent, and according to Domain, vacancy rates in the Far North Coast region are about 1.2 per cent.
The number of properties advertised on Airbnb in the Byron Shire grew by 19 per cent in 2022, according to a report by the Australian Housing and Urban Research Institute, while the number of available long-term rentals fell by 34 per cent.
Housing advocacy group Shelter NSW said the recommended 60-day cap was a better outcome than it had expected to address the “dire” situation in the Byron Shire.
“They can’t get anyone to work in the pharmacies or in any sort of job that you would need for a community to function,” policy officer Kayla Clanchy said. “It’s not sustainable.”
She said the commission had acknowledged that rentals over 60 days meant the property was no longer for “residential use”. This advice would encourage other councils to negotiate their own tighter caps with the state government.
“There have been some councils waiting in the wings to see what will happen with Byron … what was the lowest cap Byron could get,” she said.
“Particularly during the COVID domestic tourism boom, this has become more of a concern around the Shoalhaven and Eurobodalla, and down the South Coast.
“Hopefully this will set the precedent for other councils to feel emboldened to go to the Department of Planning and negotiate a lower cap, and allow them to go through that process faster.”
Non-hosted holiday rentals are already limited to 180 days in Byron Shire and a handful of other local government areas under state regulations.
Byron Shire Council had sought to tighten that limit to 90 days across most of the shire but to allow unlimited short-term rentals in some precincts, including parts of Byron Bay township itself.
Lyon said that planning proposal was the result of negotiations with the state government and he would welcome an even tighter cap.
The commission also said the owners of short-term rental properties should pay a levy to the council to counter the effects of tourism on local amenities.
And it said the government needed to work with the council to support the “urgent release” of more land for housing development within Byron Shire.
During hearings into the issue in February, advocates for the short-term rental market blamed the council’s planning policies for the housing crisis.
Owners of holiday rentals also spoke out against further restrictions, pointing to the importance of tourism to the region’s economy.
The commission also recommended the government adopt measures to improve compliance with the short-term rental accommodation’s code of conduct.
Scully said he would consider the commission’s recommendations before making a final decision on the planning proposal for the Byron Shire.
“We recognise maintaining the function and character of places people live is important, while maintaining the appeal for visitors,” he said. “I will consider the findings in this context.”
Airbnb and the Australian Short Term Rental Association have been approached for comment.
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