Does Byron Deserve Better?

October 26th, 2022

The STRA (Airbnb) issue has been discussed many times in this newsletter. The debate has come to a head now that Byron Council has managed, against the odds, to gain State Government approval to have a variation to all the other LGAs in the state. At the beginning of the year, the NSW state planning introduced legislation to limit un-hosted STRA (Short Term Holiday Accommodation) to a maximum of 180 days per year. This was in order to help limit the spread of Airbnb properties, especially in coastal towns like Byron Bay. In general, I believe it to be a good policy. Un-hosted holiday letting needs to be kept in balance in residential areas to maintain community cohesion.

Byron Shire Council considered the prevalence of Airbnb properties to be more extreme here so lobbied for the limit on HL (Holiday Letting) to be 90 days. Mayor Michael Lyon, who has made this his signature policy, has managed to convince the state government to have this variation. A sweetener to the deal is BSC has cut out four neighbourhoods that will be allowed holiday letting for 365 days a year. They are Wategos Beach, Belongil Beach, Brunswick Heads (east of Tweed St), and Beachside Suffolk Park. The irony is that over the many times BSC has attempted a variance to state planning (like the bed tax idea) they have been knocked back. To be allowed an exemption to this proposal, which is not universally supported, is interesting and unusual.

Is it Necessary?

The debate is now destined to go another round or two as the local HL industry has a budget to fight the 90-day ruling. The campaign is called “Byron Deserves Better” and they are making the case that 90 days is excessive and will hurt tourism and the economy. A lot of the sparring is around just how much local residential property has been extracted from the residential supply to service the tourism industry. BSC says 35% while the HL industry says 6.5%. This is a wide margin and is complicated by the fact that many HL properties advertised on Airbnb are only ever going to rent a few weeks a year at Xmas or Easter. Hobart is also having this debate and their figure is agreed to be 5.5% so I tend to agree with the lower figure here.

Will it work?

I would support the 90-day limit if I thought it would work and deliver more affordable housing for locals. I posted this article many issues ago and made requests to the anti-STRA lobby to pick holes in my arguments. As yet no one has posted a rebuttal in the comments section.

Even if many of these HL properties stop renting to tourists and go back into the rental pool, they will never be at an affordable rent. Byron Bay now has the highest median house price in Australia (and probably the world), which means the permanent weekly rental will be out of reach of a standard basic income. Many HL property owners have been canvassed on what they will do if the 90-day limit is imposed. Nearly all say they will still HL rent and not permanently rent therefore leaving the property empty for most of the time.

Misdirected Energy

Unfortunately, BSC has only a few levers and controls to affect change in our dire housing crisis. One of them is to kill the tourism industry and possibly reduce house prices so they become more affordable and accessible. This strategy is not wild speculation and there are some who state this is the aim of the proposal.

Mayor Lyon (who I normally support and think is mostly doing a good job) has said publicly that he would reduce the HL limit to zero if he could. He also refuted the original EIA (Economic Impact Assessment) and seems to have no concern about the many locals employed in the hospitality industry and the retail businesses that also benefit from tourism.

Create More Housing

The other option a local council has is to adapt planning controls to supply more housing. The STRA industry claims they are being scapegoated because of the decades of failures of consecutive councils in insufficient residential planning. Creating more appropriate housing would require the council to be creative and proactive and masterplan villages and communities that are sustainable, future-fit, and affordable. Unfortunately, this council is only just managing its current demands and does not have the capacity for such entrepreneurial ventures.

The anti-development and NIMBY lobby continues to hold sway in the shire, for good or for bad. We are now faced with a chronic housing shortage for workers and low-income people. BSC is a long way from starting a conversation that will reverse that trend. Instead, the plan seems to be to kill or reduce the HL industry which employs many of these workers, to supply them with housing that they could not afford to rent even if they were available. Go figure the logic of that!

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