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WA’s new short-term accommodation rules miss the mark, industry expert claims

The short-term accommodation market has long been the “whipping boy” for the rental crisis, but a Stayz director says the sector is not to blame and new regulations the Western Australian Government has introduced will have a limited impact.

The WA Government last week announced all short-term rental accommodation (STRA) providers would be required to register their properties and planning requirements would be introduced in the Perth metropolitan area, including the need for planning approval for unhosted properties.

STRA providers will also be offered $10,000 to transition their properties to the long-term rental market, to boost the number of rental homes in WA.

While Stayz Director of Corporate Affairs Eacham Curry said the State Government was to be commended on establishing a STRA register, it had missed an ideal opportunity to also introduce a code of conduct.

“World’s best practice on regulation for short-term letting does include a register and the Western Australian Government is to be congratulated for that,” he said.

“But it usually goes hand-in-hand with a code of conduct, so that there are really clear rules that everyone can understand, about how the sector is expected to operate, and that hasn’t happened.”

Mr Eacham said NSW had a code of conduct regulating the STRA market and Stayz was supportive of that as it set out the expectations and rules governing the property owners, the platforms they’re advertised on and even the travellers staying in them.

He also said the short-term rental accommodation market was not to blame for the housing crisis and was therefore not the entire or main solution.

The Queensland Government proved this after it commissioned the University of Queensland to examine the impact of short-term holiday accommodation on housing affordability and availability.

“What that study found was that, yes there were touchpoints, but the overall impact was negligible,” Mr Eacham said.

“We have become the whipping boy for it (the housing crisis).

“We’ve long said that we think that there is a need for regulation and doing that in tandem with a register so that it will help collect data, which will show whether or not we’re the problem. 

“We know we’re not, but we don’t ask people to take our word for it. 

“That’s why when you do talk about what good regulation looks like, it includes things like the register and the code of conduct.” 

The new WA STRA regulations will also mean un-hosted properties in the Perth metropolitan area will only be able to operate for 90 nights in a 12-month period, unless they receive planning approval from local government.

The Cook Government will also fund an STRA Incentive Scheme for six months in an effort to boost housing supply and affordability.

The Scheme offers a $10,000 payment to property owners to switch their STRA properties onto the long-term rental market. 

To qualify for the scheme, property owners must have already had an entire property rent on a short-stay booking platform within the past six weeks and be willing to provide a minimum 12-month lease to tenants.

To ensure the new homes are affordable, the WA Government will also cap the maximum rent that can be charged to $800 per week in Perth and $650 per week in the South West.

“Short-term rental accommodation remains an important part of Western Australia’s tourism offering,” Premier Roger Cook said.

“However, it is impossible to ignore the impact this increasingly popular type of accommodation has had on some local neighbourhoods and communities.

“My government has consulted extensively with industry, stakeholders and the community to develop these reforms, which will create a more level playing field with traditional accommodation providers while ensuring regulation is in place to manage impacts on neighbourhoods and housing supply for local communities.

“We are also doing everything we can to get more housing and rental properties onto the market quickly to help meet current demand, and I encourage owners of short-term rental accommodation to consider the new incentive and other benefits of transitioning their property to the long-term market.”

But Mr Eacham said night caps were not fit for purpose for the STRA sector.

“Where they’re saying that it’s an allowable activity for 90 nights a year, that means that there is three quarters of the rest of a year in which the kinds of things which drive governments to create codes of conduct or to regulate behaviour can occur,” he said.

“So it doesn’t actually work.”

Mr Eacham said the new regulation also had the potential to damage the economic contribution the short-stay market provided the economy.

“We know that in the 2017-18 year… short term letting was worth about $412 million to Western Australia, and supported more than 2430 full-time equivalent roles,” he said.

“That does get put at risk if you get the regulation wrong.”

Mr Eacham said the Queensland study recommended not hampering the economic benefits STRA could provide, but rather forming better policy, including a register and code of conduct.

He said the primary solution to the housing and rental crisis had to come from governments at all levels.

“We know that it’s been chronic under investment and poor planning decisions over many, many years that have been the largest single contributor to this problem,” Mr Eacham said.

“We don’t think people should take our word for it. 

“That’s why we were so pleased when we saw that the independent Queensland report did come out and say, there are things that should be done to regulate the sector, but it’s not the sector alone which is causing those problems.”

The WA Government said those STRA providers that elected to transition their property to the long-term rental market and met the requirements for the $10,000 grant would receive it in two parts – $4000 once their application is approved and $6000 after their first long-term tenancy agreement reaches 12 months. 

Owners can submit an expression of interest online, with the formal application process expected to begin by the end of 2023.Further information, including frequently asked questions about the STRA Incentive Scheme, including maximum rent chargeable by location, development planning approval reforms and the STRA Register, can be found on the STRA Initiatives web page.

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.