The NSW government has released a discussion paper seeking ways of getting short term rental accommodation onto the long-term market as it scrambles to find solutions to the housing crisis.

The government has already moved to tighten the cap on short stays in Byron Shire, announcing last year that the cap on some non-hosted short term rentals in the popular holiday spot will be cut to 60 days a year from September this year.

The current paper seeks input on a range of issues including planning and regulatory frameworks and measures to make it more attractive for investors to put properties on the long-term market instead.

“We’re in a housing crisis, so it’s important we look at every available option to boost housing supply, including a shift from non-hosted short-term rentals to long term rentals,” planning minister Paul Scully said.

Proposals up for feedback include caps on the number of days a property can be leased as a short term rental and the establishment of an STR register to enforce compliance and enforcement.

Pros and cons of caps

The paper says reducing day caps can act as a disincentive for short term rentals by making them less profitable. However, it could also see them left vacant during non-holiday periods and prices jacked up during the peak.

“This could hinder tourism and affect local economies without necessarily increasing the availability of properties for long-term users,” the paper says.

This could hinder tourism and affect local economies without necessarily increasing the availability of properties for long-term users.

Discussion paper on long and short term rental accommodation, NSW Government

As reported by Government News, a recent analysis by Homelessness NSW showed an increase in  homelessness across 58 of the state’s 128 local government areas in the past year.

Councils welcome announcement

LGNSW President Darriea Turley said the review was a step in the right direction and urged the local government sector to provide feedback to the government.

“LGNSW welcomes the review and looks forward to direct engagement on behalf of our members on this critically important issue,” Cr Turley said in a statement.

“Other local government areas in NSW have the same issues as Byron and it’s our hope that this review will facilitate a range of solutions being implemented.”

Councils resolved at the 2023 LGNSW Annual Conference last November to call for local government to have the ability to respond flexibly to short term rentals.

Housing minister Rose Jackson says all options are on the table.

“We’re determined to do everything we can to tackle the housing crisis and put every part of the housing market under the microscope for options to encourage a greater supply of long-term rental accommodation,” she said in a statement.

“This review will inform our approach to make better use of all forms of housing, including short term rentals, vacant property and holiday homes.

“This includes looking at ways to move some of this housing to the long-term rental market and to minimise its negative impacts on the housing market as well as what we can do to support homelessness services across NSW.”

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