Melbourne Takes Action Against Airbnb and Similar Short-Stay Accommodation Providers

The City of Melbourne has proposed new regulations targeting short-stay accommodation providers in response to concerns about housing availability.

Under the new rules, providers will be required to pay a registration fee of $350 (US$226) and there will be a yearly cap of 180 days on listings available on platforms like Airbnb and Stayz.

These local laws were approved on Aug. 28 and will be implemented by February 2024 following a consultation process.

Melbourne’s Lord Mayor, Sally Capp, has highlighted the impact of short-term stays on the city’s housing crisis, with 14 percent of residential properties currently used for this purpose.

The new regulations will bring Melbourne in line with other global cities that have planning permit requirements and limits on the duration of short-term rentals.

Goal to Increase Housing Availability

The main objective of these reforms is to encourage more long-term rental properties by reducing the maximum duration of short-stay accommodation each year.

This will incentivize property owners to lease their spaces to long-term tenants for greater cost-effectiveness.

In Melbourne, there are currently over 6,700 apartments listed on the short-term rental market, concentrated mostly in Southbank, Docklands, and the CBD. The introduction of these regulations is expected to free up a significant number of apartments for long-term leases.

Airbnb’s Concerns

In response to the proposed changes, Michael Crosby, Head of Public Policy for Airbnb Australia and New Zealand, stated that Airbnb supports opt-in tourism levies, especially in high-tourism areas.

He also expressed concerns about the cap on the number of nights a property can be leased, arguing that it may be unfair to Airbnb hosts. Crosby cited a survey that showed 40 percent of Victorian Hosts rely on hosting income to balance their household budget.

Disputing Figures

Airbnb disputed the City of Melbourne’s estimate that 14 percent of residential properties are used for short-term rentals, suggesting that this figure may have originated from third-party data.

According to Airbnb’s research, the proportion of residential stock available for short-term rentals is closer to four percent, significantly lower than the city’s estimate.

Furthermore, Airbnb contested the city’s claim that short-term rentals provide limited economic benefits to the community, citing a forthcoming report by Oxford Economics that highlights the contributions made by Airbnb guests to Melbourne’s GDP and job market.

Advantages of Short-Stay Accommodation

Short-stay accommodation providers, like Airbnb, offer numerous benefits, including the opportunity for individuals to generate income from their extra living space, diversify tourism options, and provide unique lodging experiences for travelers.

These platforms are often more cost-effective and suitable for longer stays compared to traditional hotels or motels.

Additionally, they offer a wider range of accommodations in neighborhoods where hotels and motels are scarce, allowing guests to immerse themselves in local cultures.

Tourist Levy

These proposed regulations come after the state government’s announcement of a potential $5 levy on all short-term stays. However, industry experts argue that such a tax would negatively impact the tourism industry and do little to improve housing affordability.

The CEO of the Victoria Tourism Industry Council (VTIC) expressed concerns about the proposal, stating that it would particularly burden Victorians, as 80 percent of regional visitation comes from within the state.