investors furious as Byron board pushes to cap short-term rentals like Airbnb

Thus begins the story. Byron Bay’s legendary summer. The beautiful people who come to play. The drum is turning in the streets. Dolphins ride the waves with surfers at Wategos. The city bustles at night. Traffic stalled for miles. House parties in the green hills.

Amid all the idyllic glamor and celebrity, traumatized homeless people emerge from cars, vans, tents and sand dunes on sunny mornings to try to charge a phone or take a shower. They are elderly women, single mothers and working families who cannot find affordable housing. Or any place to live.

“A large number are precariously housed,” says Byron Mayor Michael Lyon. “Paying 60-70% of income on rent is not uncommon. Moving between different places and friends, spending nights in between in vehicles – these are all too common stories.

Byron shire illustrates all that is wrong with an unregulated property market

Councilor Mark Swivel

They are driven from their homes and from the county as the seaside town has become overcrowded and overpriced. Byron is a city bearing the brunt of flooding, 2.2 million visitors a year and city dwellers buying holiday homes during Covid, pushing median house prices far beyond the reach of most residents. It is estimated that 35% of the dwellings are occupied by short-term rental accommodation.

“We are meant to be a bastion of progressive alternative thought and environmental consciousness,” says Byron’s adviser and attorney, Mark Swivel. “But in reality, Byronshire has been a petri dish for the free market. This community exemplifies everything that is wrong with an unregulated real estate market.

An aerial view of Byron Bay. Workers in the area struggle to find housing. Photo: Airphoto Australia/Getty Images

On Thursday, in what Lyon calls an attempt to “stop the rot”, Byron County Council will vote on a proposal to cap certain short-term rental accommodation at 90 days per year.

“We know that visitation trends will only increase,” he says. “So if we do nothing, we will continue to lose long-term rentals. We need to hold the line on our long-term stock now so that when we put a new supply on the market, it is not bought by investors and also rented short-term.

50% of a house’s rent is donated to the community through pool cleaners, gardeners, maintenance workers

Colin Hussey

Lyon believes that if the council does not regulate now, other areas such as Mullumbimby will start to convert to short-term rental accommodation ‘as visitation returns’.

He doesn’t think the county will lose visitors because “occupancy is pretty low, 60-70% in traditional accommodations, like hotels.”

Investors, he says, “make decisions based on the future. The fact that we have reported this policy and it looks like it will lift, many investors have already changed their long-term properties or sold them.

Although he says “it’s a pretty modest proposition”, there is, he admits, “a lot of money at stake”.

Much of it is in the hands of the Byron Deserves Better Group, which campaigned vigorously against the cap.

Byron Bay Beach.  Workers in the area struggle to find housing.

The Byron area attracts 2.2 million visitors a year. Photo: Lighthousebay/Getty Images

Colin Hussey, Managing Director of A Perfect Stay, manages 160 properties in Byron Shire. He thinks the cap “will devastate the economy”.

“I employ hundreds of people. What other business can you say you have all your expenses for the whole year but can only have income for 90 days?

“Fifty percent of a house’s rent goes back to the community through pool cleaners, gardeners, maintenance workers. It gets rid of the most profitable tourists, those who have the least impact. This forces the remaining days into peak periods.

Hussey says that in a survey of its landlords, “96% said they would never consider renting them out permanently.”

“That won’t solve the problem. These are detached houses, usually owned by Australians because they want to vacation here and retire here.

Related: Hollywood and homelessness: the two sides of Byron Bay

He says that even if these high-end properties came on the permanent rental market, they would be thousands more per week than an average local barista could afford.

“There are no accommodations available”

Meanwhile, businesses in the city are struggling with staff shortages, reduced hours or not opening on certain days because workers find nowhere to live.

“The biggest economic drag right now is the lack of staff,” Lyon said. “And it’s not just waiters and bartenders. They are professionals, engineers, planners. There is no housing availability on the housing ladder. There are people who earn $80,000 or $90,000 a year who cannot find a house, so the work is not done.

For some people, like a septuagenarian who asked not to be named, and who worked in the artistic field without “job security, without super, without a divorce settlement”, renting her house has “been a gift”.

“It is miraculous that I can earn an income in my old age by renting my house. I know a number of women who are in the same situation as me.

As long as she is a host on the property, she will be able to continue renting her home 365 days a year. There are only houses not accommodated, entire houses, apartment buildings, subject to the ceiling. Likewise, homes in the prime seaside areas of Suffolk Park, Wategos, Brunswick Heads and Belongil will be exempt.

There are currently 1,200 non-hosted properties registered with New South Wales Planning and 800 hosted. Lyon says there are other properties the government is renting for the flood-affected that will come on the market when people are housed again.

Michael Crosby, Airbnb’s public policy manager for Australia, said the cap proposal “needs to be reconsidered urgently”.

He thinks the cap is unlikely to increase the overall housing supply in the county and “may have unintended and irreversible consequences.”

Related: To Airbnb or not to Airbnb: is it ethical to rent accommodation to vacationers in times of housing crisis?

This will, he says, make it difficult “for visitors seeking accommodation for non-tourism purposes such as access to work, education or medical treatment”.

Airbnb is prepared to “support a tax on tourism to fund housing and community projects, and support government reviews of eviction protections to ensure current systems are fit for purpose and provide adequate housing security to long-term tenants.

Dr Sabine Mushter, a former researcher at Southern Cross University, questions the argument that jobs and money will be lost with the proposed short-term rental housing policy.

“In my opinion, the proposal will not lead to a shortage of tourist accommodation, as all exempt areas will increase the availability of overnight stays,” Muschter said.

Councilor Swivel says this is a “controversial issue”. He says the strongest argument for the council leading housing development is the need for accommodation for key workers in health, education and hospitality.

“We should be much more innovative and much more aggressive in how we engage with the state government to develop particular projects,” he says.

Meanwhile, the Byron brand is stronger than ever. And the summer party has only just begun.

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