Experts argue Sydney not doing enough about Airbnb’s impact on rent

Experts argue Sydney not doing enough about Airbnb’s impact on rent

Posted by John P. Bradford // October 27, 2016

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There’s no question that Sydney, Australia, is an expensive place to live. But do we know what’s making it worse?

Following a state inquiry, there are fears from some experts that the New South Wales state government is still not doing enough to tackle the potential damaging impact of Airbnb on Sydney’s rental costs and availability.

The NSW Committee on Environment and Planning’s short-term holiday letting report concluded there was not enough data to make calls on whether the sharing economy giant is taking long-term rentals off the market, in favour of tourist accommodation.

It recommended the NSW government begin collecting the numbers, giving it six months to respond. With Airbnb operating in Sydney since 2009, it’s an issue that’s too costly to ignore for much longer.

What’s really happening here?

Sydney is regularly included among the top 10 most expensive cities globally for housing costs, and reportedly fewer than one percent of its rental properties are affordable for low income families.

While Airbnb has always maintained it’s making use of underused assets spare rooms or full homes while owners are holidaying the reality is unclear. That makes it hard to understand if renters are being pushed out for the sake of tourists.

According to Murray Cox who runs unofficial Airbnb monitoring site Inside Airbnb, 60 percent of the listings in Sydney as of Sept. 2016 were for an entire premises. Likewise, 22 percent of entire homes are rented by a host with more than a single home on the platform.

These are indicators, but by no means proof, of professional landlord or hotelier listings.

In October, Airbnb claimed there were 15,000 listings in Sydney, adding that 82 percent of Airbnb hosts generally rent out the home they live in.

“The vast majority of Airbnb hosts in New South Wales share the home in which they live they aren’t taking housing off the market and use the money they earn to help pay their bills or stay in their homes,” a company spokesperson told Mashable.

Image: Inside airbnb

However Peter Phibbs, a planner and social economist who studies affordable housing at Sydney University, told Mashable he’s concerned Airbnb is not forthcoming about the nature of its business.

“When they portray their product as spare bedrooms when a lot of their business is whole property, I think we can call that bait and switch,” he said.

He’s been working on an academic paper to be published later in the year, investigating the company’s impact on housing affordability locally.

“It would appear that a lot of properties that could potentially be longterm rental tenancies are going into the Airbnb market. And the number of those are high enough, they would appear to be putting upward pressure on rents,” he said. “We’ve got a pretty big affordable housing problem at the moment. Airbnb is just adding to it.”

“We’ve got a pretty big affordable housing problem at the moment. Airbnb is just adding to it.”

Mark Coure, MP and chair of the NSW Committee on Environment and Planning, told Mashable the committee received evidence about Airbnb’s impact on housing availability and affordability, but found it limited.

“This evidence was anecdotal, however, and was not supported by statistics or studies,” he said in an email.

If data is the issue, Phibbs argued there should be an ability to directly monitor Airbnb to get an understanding of what’s truly on offer. That lack of data is something Laura Crommelin, research associate at the City Futures Research Centre at the University of New South Wales, also pointed to.

Although the committee noted the Grattan Institute’s sharing economy report, which states Airbnb only accounts for two percent of Sydney’s rental capacity, she argued that doesn’t tell you about the impact in areas where Airbnb listings are concentrated.

In Sydney, that’s overwhelmingly in Waverley Council and the City of Sydney Council.

Image: Airbnb

According to Cox’s unofficial numbers, the City of Sydney has the most entire home listings and the most hosts with more than one entire home listing. There are reportedly 2,802 entire home listings in the area, of which 775 are by hosts with more than one listing.

The Grattan Institute also concluded, “Long term tenants have clearly been displaced from the inner city beachside suburbs where (in a few cases) up to 15 percent of homes are now listed.” However, it suggested rent increases were likely to be “localised or small.”

A City of Sydney spokesperson told Mashable it supports the committee’s recommendation the government collect data on the impact of short-term rentals on housing affordability and availability. Waverley Council has also been approached for comment.

What’s the solution?

Without solid figures, it’s hard to diagnose the problem, let alone find a solution.

Still, other global cities provide a wealth of options. San Francisco has implemented a registration system for Airbnb hosts for example, although Airbnb isn’t happy about it.

In New York, Airbnb has also tried to roll out a “one host, one home” policy to limit the use of the platform by professional landlords with multiple listings.

This is at its core a discussion about where Sydney families can afford to live.

Sydney University’s Phibbs suggested a permit system could be used in Sydney for hosts that want to make a whole dwelling more or less permanently available.

“Whether you give them a permit depends on the nature of the housing market,” he said.

“Someone that’s renting out a whole dwelling for most of the year it’s a very different product than a struggling family getting a person in occasionally. The regulatory system has to have different answers.”

The “one host, one home” policy although a form of self regulation is a good step towards the real nub of the problem, UNSW’s Crommelin suggested. In July, Airbnb announced it had removed 2,233 New York listings that appeared to be hosts with multiple properties.

“There is this significant difference between people who are using it in a sharing capacity and people who are using it in a commercial capacity as an alternative to other ways of letting out investment properties,” she said.

Image: Airbnb

For his part, Coure argued “one host, one home” policies and the like are a response by regulators and advertising platforms to the specific American urban rental environment. “NSW housing and rental regulations, and the NSW housing market are different to the US market,” he said.

Arguably, any and all solutions should be considered, no matter where they originate. After all, this is at its core a discussion about where Sydney families can afford to live.

“Given that we’re in the top 10 cities in terms of Airbnb use, and regularly right up the top of rankings in terms of housing affordability issues, I think we do need to take this stuff seriously and not just sit back and say we don’t have numbers,” Crommelin added.

Read more: http://mashable.com/2016/10/25/sydney-airbnb-rental-affordability-availability/