One size doesn’t fit all for short-term accommodation

15 Dec 2022

Local Problems, Local Solutions: One size doesn’t fit all for short-term accommodation 

In this article Bec explores what has changed and the potential planning considerations around short-term accommodation in WA expanding on changes since her Masters research on AirBnB.

It seems eerie, thinking back to the summer of 2019/2020 as news about some virus in China grew that none of us knew how quickly the world was going to change. There have been a lot of reflections on COVID and the impacts of social distancing, increased work from home arrangements and closed borders on the way we operate as planners and urban designers. But for me, following on from my pre-COVID Masters research project into the disruption caused by the sharing economy – in particular home sharing – with the first summer of reopened borders now here, there is much to consider about what has changed and the potential planning considerations around short term accommodation in WA.

A short history of the home sharing economy and COVID in WA in recent years includes the following important highlights:

• In November 2018, the Parliament of Western Australia Economics and Industry Standing Committee commenced an inquiry into and report on matters relating to the regulation of short-term accommodation in Western Australia
• As of July 2019, there were almost 13,000 Airbnb listings in Western Australia.
• In September 2019, the Standing Committee’s inquiry published their report ‘Leveling the Playing Field. Managing the impact of the rapid increase of Short-Term Rentals in Western Australia’ had 45 findings and made 10 recommendations including requiring updates to land use definitions and the model provisions to be completed by June 2020.
• As of 11 March 2020, the World Health Organization (WHO) declared the novel coronavirus (COVID-19) a worldwide pandemic.
• On 19 March 2020, the Federal government announced that Australia would close its borders to all non-residents of Australia effective from 20 March 2020
• On April 5 2020, the Western Australian government introduced strict border controls with other Australia states.
• In December 2021, the WAPC released draft ‘Position Statement: Planning for Tourism’ and associated guideline which were intended to outline the policy position of the Western Australian Planning Commission (WAPC) and guide the appropriate management of tourism land use and development in the State. Advertising was open till March 2022.
• On March 5 2022, the Western Australian border controls were removed after almost two years of some form of restriction.

The history of COVID plays an important role in considering the home sharing economy and Western Australia’s response to pressures, particularly in regional WA.

As of November 2022, the number of Airbnb listings is 9,901 (or a 22.34% decrease on July 2019) and critically, in the face of increase housing supply issues in WA and concerns about disruptive impacts that are negative in nature (such as impacts to neighbourhood amenity), a number of local governments have begun responding to matters related to short-term accommodation ahead of the finalisation of the WAPC Position Statement.

Why does this all matter

There are two key planning matters under consideration when discussing how home sharing / short-term accommodation may need to be regulated (additionally, economic matters both in terms of benefit and harm are at play but we’ll focus on the planning):

1. Housing Affordability and Availability

It’s important to ensure there is available and affordable housing to meet the needs of the population, however, short-term rentals have posed a risk to this particularly in key tourism locations where there is competition between tourists, workers (permanent or transient/seasonal) and potential permanent residents. Academic research into the impact of Airbnb listings on housing markets has highlighted that the provision of Airbnb listings reduced the supply of permanent residential housing supply and made housing less affordable.

Within regional areas, the concern for housing affordability and availability is quite serious given there can be significant limitations on supply. Home-sharing and holiday homes aren’t by any means new in these areas, however, the rapid rise of platforms that make the process easier without clear restrictions has increased the need to consider how supply is managed.

2. Land Use Compatibility (including Amenity Considerations)

Unsurprisingly, the general public’s big issues with Airbnb and similar short-term rentals have been the related to the impact of these rentals in residential areas. It raises an interesting question about land use classifications/definitions and if short-term accommodation can be compatible with residential uses.

The key concerns are usually related to noise, waste and parking. The media in 2017-2019 would have us believe that people who stay in a house unsupervised are incapable of being respectful and in some cases this is true but when you consider pre-COVID there were just under 13,000 Airbnb short-term accommodation listings in WA – not all guests were causing nuisance. It’s a careful balance to strike trying to be welcoming of visitors who are important to local economies but also respecting the permanent residents who call a place home. Thankfully the dramas involved in our regional towns aren’t like those in Summer Bay but it does raise some questions of how to adequately handle accommodation management, noise, waste, parking etc.

Top 10 Local Governments by Number of Airbnb Listings as of September 2022

Table 1 outlines the 10 local governments with the highest number of Airbnb listings and compares the number of Airbnb listings to the number of dwellings in the LGA. The 10 LGAs listed contain 51.3% of the total WA Airbnb listings in the State and while the areas themselves aren’t overly surprising – many being in locations with blue, green or grey amenity that attract tourism – the percentage of the housing stock is something to be noted. The strain on housing supply in WA is something many in planning are battling with and there needs to be a balance between the tourism benefit of short term accommodation and finding solutions to protect permanent residential supply particularly in regional Western Australia. This data is limited by relying on just Airbnb listings with many other platforms available and so the full extent of the situation remains consistently unknown.

What is being done about it?

State Government Response

In December 2021, the WAPC released ‘Position Statement: Planning for Tourism and associated Guidelines’ for advertising. The documents are intended to outline the policy position of the Western Australian Planning Commission (WAPC) and guide the appropriate management of tourism land use and development in the State and also give clear and consistent direction to local governments on the definition and treatment of short-term rental accommodation in WA.

It is important to ensure that planning for tourism – particularly where short-term rentals are concerned – considers the housing market and residential amenity whilst also promoting economic sustainability and diversity of accommodation options within the tourism sector.

There are a number of concerns in relation to the draft Position Statement and associated Guidelines, not the least of which is a very real concern that the Position Statement and Guidelines read more as if they should be part of a policy document (either an SPP or an operational policy), rather than a Position Statement.

Concerns exist about the inclusion of ancillary dwellings as an allowable type of dwelling within which to accommodate short stay use as part of the draft Position Statement. This is a particularly concerning situation for local government areas where they have specifically prohibited the use of ancillary dwellings for that purpose as in certain locations, they represent a much-needed form of low-cost permanent rental accommodation.

Some local governments have also raised concerns with the new hosted and unhosted accommodation definitions that would be implemented through amendments to the Planning and Development (Local Planning Scheme) Regulations 2015 which allow certain forms of accommodation deemed ‘low-scale’ due to either the number of guests where the host is onsite or where it is let for no more than 60 days per calendar year where there is no host on site. It should, however, be noted that the draft Position Statement is clear in stating that in regards to unhosted short-term rental accommodation “Local government has the flexibility to regulate unhosted short-term rental accommodation through its local planning framework to respond to local conditions”.

Whilst it is recognised the intent of the draft Position Statement is driven by a need to address some very significant issues, the seasonal nature of tourism, and the need for a flexible approach to support tourism land uses during low/off seasons to facilitate the economic viability of these uses/places/destinations means that the state level response needs to provide a high-level guidance that facilitates local government preparing local responses.

Local government response

We are seeing the beginnings of varied local government responses to the issues posed by short term accommodation. We won’t talk about the responses of where local governments are declining applications for accommodation or enforcing compliance action – although both those things are happening including recently in the Town of Bassendean which received backlash from Airbnb’s head of public policy for Australia and New Zealand. Instead, focusing on the policy side of things local governments are, in lieu of an overarching State response, creating local solutions to address the specific local problems.

The City of Busselton have introduced what the ABC described as “Some of Australia's strictest laws for Airbnb and holiday home users” in 2022. They have a local law, a local planning policy and a code of conduct which short-term accommodation rentals must abide by to remain registered. They have imposed night curfews, have mandates on how quickly property managers must respond to issues and require that pet dogs cannot be left unattended. There is a suggestion that third wave changes could be on the cards to ban commercial holiday homes from residential areas. In the vacuum left without State government guidance, the City has responded in a manner that they believe addresses the concerns in their local government area. As a dog mum to a 3-year-old border collie, the no dogs left unattended rule proves tricky for me personally but if it addresses the local concerns about amenity and land use compatibility, then their leadership on the issue should be commended.

Other local governments are taking their own varied approaches, the Shire of Exmouth has adopted Local Planning Policy 6.27 allows for residents to register their property as temporary accommodation for the Ningaloo Eclipse in 2023. The Policy allows proposals for temporary accommodation (which comply with its requirements) to be considered with only a registration process rather than a full application for development approval. It’s unclear how some of the matters proposed in the draft Position Statement may be handled where there is conflict especially in temporary situations such as the Eclipse event.

Conclusion

The fact remains, as we head into our first summer with fully open borders in a number of years and with housing supply close to crisis point, we cannot be complacent in searching for solutions – particularly in regional WA.

Local governments leading the charge is a blessing and a curse without State guidance. They have more freedom to respond to the varied local issues caused by short-term accommodation and to try and balance with the potential benefits brought particularly where we having rising costs of living and interest rates making mortgage repayments harder to meet.

As the draft Position Statement considers what, if any, modifications may be necessary following the submissions received in early 2022, it’s imperative that the State response is high level guidance to allow certainty of some land use consistency across the state; to support the economic benefits that can come from short-term accommodation and allows flexibility for local government preparing local responses.

The draft Position Statement recognises in the preamble to policy measures that –

“Local government are best placed to plan for tourism within their communities, with local knowledge of tourism activity, opportunities, constraints, including potential impacts and what requirements, if any, should be placed on tourism proposals”

– however the draft as it currently stands with the associated guidelines needs to consider the full spectrum of issues currently faced from amenity concerns for neighbours; to housing affordability/availability; to economic benefits in tough economic climates; to the flexibility to provide accommodation for permanent residents in the long term whilst housing workers and tourists in seasonal changes.

The problem isn’t one with an easy solution but as someone who has spent years researching short-term accommodation the one thing I feel confident in recognising is that the disruptive impacts (both positive and negative) vary wildly based on location factors, especially in WA, and we need to see support for local governments to find local solutions with a flexible framework behind them.

Get in touch with Bec to discuss this topic further here