How short-term rentals are making Sydney's housing crisis worse
How short-term rentals are making Sydney's housing crisis worse; short-term letting platforms have removed 6000 properties from the long-term rental market throughout NSW
Tweet Topic Started: 19 Sep 2017, 07:50 AM (377 Views)
How short-term rentals are making Sydney's housing crisis worse
Our vertical villages of tomorrow demand we get the settings right today. Sydney is increasingly a high-rise city, but in the face of modern challenges the laws governing these vertical villages are in desperate need of an update.
With population projections showing NSW will be home to to 9.9 million people by 2036, and 70 per cent of newly approved dwellings estimated to be apartments, we are continuing to grow up at rapid rates.
Proposal for apartments set to be built near Bella Vista, Kellyville and Showgrounds stations in Sydney's north-west. Courtesy NSW Government. But while we are building up, the laws that are supposed to manage these strata communities continue to leave the people who live in apartments particularly vulnerable to changes in our modern world.
The most recent, prominent and profound of these changes is the advent of short-term letting platforms and apps, which have quickly and dramatically introduced short-term tourists into apartment blocks that previously housed owner-occupiers and long-term tenants.
To give you an idea of the scale of this new boom, the University of Sydney's Urban Housing Lab recently found that short-term letting platforms have removed 6000 properties from the long-term rental market throughout NSW.
Don't think that sounds like a problem? Well consider for a second the significant macro issues for the city and state, as well as the micro ones for those living with this dramatic change.
First to the macro. Meriton's World Tower in the middle of Sydney remains the tallest and largest residential building in Sydney, with around 700 apartments. In the past three or four years, the multinational Airbnb conglomerate and its colleagues have removed the equivalent of just under nine World Towers from the rental market. These properties are no longer available to tenants. They are not available for sale. They are not available to live in – they are available only for discount tourists.
Now what does the quick removal of the equivalent of nine World Towers' worth of precious and often well-located properties do to house prices, to land prices and to rental prices: it pushes them all up, of course. So yes, people talk about the impact land release policies and tax incentives have on property prices, but let's bell this cat (or indeed, these apps), and add short-term stay platforms to the list of things governments can do to address housing affordability.
Now to the micro issues. In addition to the impact on affordability, the effect short-term letting has on strata communities is real and growing. From amenity and safety issues, to who covers the cost when damage is done, apartment owners are increasingly unprotected and concerned, but the law leaves residents with little remedy and no say in the short-term letting process.
It is us who are living with the infernal parties on balconies, backpackers shagging in our pools, gymnasiums we pay for that we can no longer use, people in our building who we don't know and the bill for all of the damage and wear and tear to our lifts and hallways.
And year-on-year, this is happening more and more as the apps get more popular and the international short-stay conglomerates get bigger.
Thankfully, the NSW government has turned some attention to this; to the list of issues and the evidence supporting sensible regulation of short-term letting.
A recently released options paper presents the option for owners' corporations to have the right to decide whether these tourist platforms are allowed in their individual buildings.
It is an option that must be pursued, not only because it's the fair thing to do, or because of the aforementioned impact these platforms have on housing affordability and amenity, but because it is fundamentally in line with the very design and purpose of apartment living.
When people buy into strata, they are buying into co-owned common property giving rise to a "communal arrangement".
They are agreeing to a shared responsibility for setting the rules regarding the use of the property.
And they are agreeing to a shared management of costs, including if common property such as lifts and carpets and gymnasiums are damaged as a result of short-term tenants.
The people who share the inconvenience associated with hosting discount tourists in their building, and the costs associated with managing the repairs, also need to share the ability to regulate whether that tourist operation should be allowed to be there in the first place.
Owners' corporations don't want a blanket ban on Airbnb and the other short-term stays – we just think the people who live with it and pay for it should have the right to decide on it, and whether it is allowed.
Some buildings will elect to allow short-term stays because of the increased short-term rental potential, and some will not due to the increased inconvenience and costs – but the point is that it is our strata community, so it should be our choice.
That is a position that is even borne out in a recent City of Sydney survey into local attitudes to short-term letting, despite the fact that most people who responded were tenants not owners.
On a micro level this is at its core about choice and fairness and, beyond that, it's about good public policy and not allowing houses to be locked away for tourists during a housing affordability crisis, or a disincentive to apartment living during a population boom.
The state government's options paper presents an opportunity to make apartment living more affordable and more desirable, and guarantee it as a model to house citizens now, as well as in the future, and I urge people to review it and make a submission.
The answer is yes, because it reduces supply of long term rentals.
Is Airbnb to blame for rising rents in hip college towns?
It used to be that renting an apartment in Cambridge's funky triple-deckers or two-family homes didn't rival the cost of tuition at one of the city's storied universities, Harvard and MIT.
Now, renting in Cambridge can feel like that — something critics say is made tougher by short-term rental websites like Airbnb, through which property owners can make more money renting out apartments or homes by the night instead of a yearlong lease.
The debate over services like Airbnb — often criticized for essentially turning apartments into hotel rooms, putting upward pressure on housing costs and driving out longer-term tenants who can't afford rising rents — has raged for years in major cities. But it is also keenly felt in event-heavy college towns, particularly ones that also are tourist destinations or are near them, like Cambridge, next to Boston.
Jennifer McConnell, a high school Spanish teacher who rents out rooms in her Cambridge brownstone through Airbnb, said she'd otherwise have trouble covering her expenses.
"It's been a game changer both financially, because it's allowed me to stay in my home, but also emotionally because it's filled up my home with guests," said McConnell, whose guests included a woman from Germany who stayed for seven weeks while taking a graduate course at Harvard.
Short-term rentals have caused enough concern in Cambridge that the city council last month approved new regulations requiring people offering short-term rentals to live in the same building and undergo an inspection once every five years.
Airbnb fighting San Francisco over registering hosts Play VIDEO Airbnb fighting San Francisco over registering hosts Picturesque Boulder, home to the University of Colorado, last year began requiring property owners to have a license to rent to visitors. Evanston, Illinois, a Chicago suburb that is home to Northwestern University, also has beefed up rules on rentals of less than 30 days.
Massachusetts Lodging Association President Paul Sacco hailed the Cambridge rules, saying they're needed to prevent "illegal hotels" in the city.
Airbnb said it is not to blame for spiking housing costs. Only a small percentage of the Cambridge housing stock — about 140 homes or apartments — are rented through its website for more than 172 nights a year, it said. That's Airbnb's estimate for someone who is effectively doing short-term rental as a business.
Interest in renting rooms through Airbnb often jumps during graduation or a big football game, said Will Burns, public policy director for Airbnb.
Visiting scholars and families of college students also fill rooms. In Cambridge, an annual rowing event on the Charles River also creates demand.
In the past 12 months, Airbnb said, there have been 90,000 guest arrivals in Cambridge through its service in the city of about 110,000.
Kirsten Rulf, a 36-year-old research fellow at Harvard Law School, said she used Airbnb for two weeks in August 2015 before finding permanent housing. The small, furnished room in a larger apartment cost her $1,500 for 14 nights, she said.
"For me that was the best option, because hotels are super expensive, especially in August," said Rulf, who hails from Mendig, Germany.
A tour of Airbnb's website reveals how much of a draw colleges are — at least according to those trying to rent out rooms.
"Perfect spot to visit MIT, Harvard, BU (Boston University)," reads one ad. "The house is within walking distance to the Princeton University Campus," reads another ad. A third boasts, "Great 'shotgun' style apartment on a nice street in New Haven which is a short ( 5min) walk to Yale."
Some institutions, including Boston's Emerson College, have even busted students for trying to rent out dorm rooms.
An agreement on graduate housing at Yale University states that while students are allowed to have guests for short visits, "Guests who pay rent and/or guests found through Airbnb or similar arrangements are prohibited."
In Cambridge, the median rent has soared to a daunting $3,000 a month, according to real estate data provider Zillow. In Boston, which sees its population swell every September when students flock back, the median rent is $2,700.
According to Zillow, the median monthly rent in Evanston is nearly $1,700. The rent in Ithaca, New York — hub of the touristy Finger Lakes region and home to Cornell University — is about $1,600, according to the real estate firm Trulia.
A 2014 report by New York Attorney General Eric Schneiderman found "private short-term rentals displaced long-term housing in thousands of apartments" in New York City.
McConnell, the Cambridge resident who opens her home to Airbnb clients, said she's OK with the city's regulations but isn't thrilled about the inspections. She said she also doesn't fault Airbnb for the city's soaring housing and rental costs.
"The middle class person has a hard time finding a place," she said. "I don't blame that on Airbnb. People couldn't afford to rent those places anyway."
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