Tourism industry groups want Victoria to follow other states, including NSW, and impose a limit on the number of days per year that properties can be let as short stays.

The Victorian Tourism Industry Council and the Accommodation Association of Australia have each called on the Victorian government to create a level playing field for all operators.

Accommodation Association chief executive Richard Munro said while Victoria has among the most short-stay listings in Australia, there is little government oversight. “It’s largely unregulated,” he said.

In NSW, 180-day limits have been implemented in numerous coastal and regional districts and much of Sydney. Victoria is yet to even contemplate this basic regulation, leaving apartment residents exposed to well-documented, ongoing issues caused by short-stays

The Accommodation Association, which represents caravan parks, regional motels and hotel chains, is also pushing for the short-stay sector to meet similar safety standards to commercial operators, including large hotels.

It’s fascinating to see the tourism sector openly berate a state government that got itself very cosy with Airbnb, purportedly to “boost tourism”.

Four years ago, the short-tenured Trade and Innovation Minister, Mr Dalidakis admitted to Parliament that "I visited Airbnb's office [in San Francisco] in a visit to North America". (Hansard, 7 August 2018, page 46). It was earlier reported by The Age that Premier Daniel Andrews had visited Airbnb in San Francisco in 2015 as part of an Emergency Management Victoria initiative.

After waiting four years for a review - four more years?

We continue to hope for an epiphany in Spring Street – the irony of having the tourism sector attack the government’s inaction on short-stay accommodation.

Alas, elevating inertia to an art, the government this month quietly announced that again it would defer its review of short-stay legislation – to an undefined date sometime in the next four years.

In 2018, the government committed to a “post-implementation review” in 2020, as a sop to the broad opposition. It was tantamount to admitting that the legislation was deeply flawed.

Covid intervened and the promised review was delayed until 2021, and then re-promised “maybe” for 2022.

This month the Leader of the Victorian Greens, Samantha Ratnam, speaking to an adjournment action in parliament, sought a formal response on the long-overdue review.

The government has just published its word-salad response on the parliament website (you can find the link on our website, welivehere.net):

“As the tourism sector was heavily disrupted during the pandemic, the post-implementation review will be undertaken as part of the mandatory statutory review of the recent legislative reforms to the Owners Corporation Act 2006, which is due to be undertaken between 2023 and 2026. Combining the reviews will allow for more extensive data collection to be undertaken and assessment of the amendments, while also ensuring consistency with the broader review into Owners Corporation legislation and regulation.”

Having deciphered that rather abstruse announcement, we are left asking this: why wasn’t the short-stay legislation included in the overall review in the first place?

Playing the Covid card, the government says we could be waiting another four years before the topic of short-stay regulation is even considered in Victoria – a total wait of eight years. With a forthcoming state election, Victorian apartment dwellers are entitled to more than a vague mollification. We deserve a firm commitment to a fixed date for the review – this year!

Meanwhile, other states and territories have already got down to business and implemented solutions. Is it any wonder the tourism sector is fuming with frustration in Victoria?

NSW tests lowering short-stay limit to 90 days

Attention, state government of Victoria: the NSW Department of Planning has approved a “Gateway Determination” for a planning proposal to reduce the number of days of non-hosted short-term rental accommodation in parts of the Byron Shire from 180 days to 90 days.

The proposal follows an Economic Impact Analysis, commissioned by the NSW Government, that found allowing 90-day caps is the most effective way to support the long-term housing pool.

The proposal is designed “to mitigate the significant impacts of short-term rental accommodation on permanent rental housing supply, amenity, local character, and community, while still allowing for a diverse and sustainable base of tourist accommodation options to support the local economy.”

The NSW government-approved proposal is an exemplar of regulatory changes that are progressing with enviable velocity in NSW, Queensland and Tasmania, particularly for apartment buildings.

Must Victorians gaze disconsolately over the borders as our interstate neighbours tackle, and solve, the socioeconomic problems associated with short-stays?

We understand that the Greens will keep pushing the Victorian government to bring forward the legislative review and get moving on short-stay regulation sooner. “We Live Here” will keep making ourselves heard, too, until social equity and economic logic prevail.

Ban on developers locking residents into energy contracts

As an example of how the same state government can achieve results where there is a will, we have a significant win to report.

Victorian apartment developers will be banned from signing any private deals that would lock residents into a contract with an electricity retailer - known as an “embedded network” deal.

Embedded networks can deliver massive undisclosed profits to developers via an opaque “management fee” or margin structure. Although the quantum is usually undisclosed, residents can reckon the secret margin within a reasonable tolerance. For example, if your apartment is paying $50 per month above the best available electricity supply rate, and your building has 200 apartments, the calculus is easy. Remember to add a similar estimate of the markup on the common area electricity costs too.

The good news is that state Energy Minister Lily D’Ambrosio has introduced a ban on embedded networks in new residential buildings, taking effect from next year. There are exceptions where buildings run on 100% renewables. We applaud the state government for this initiative to proscribe an egregiously ethically practice.

This leaves the question of existing buildings with conventional embedded networks, which the government says it will address “soon”.

Meanwhile, conventional embedded network managers are feeling immense pressure from soaring compliance costs. Residents in some buildings suffering with needlessly higher prices because of an embedded network might, just might, be lucky enough to see the private deals implode naturally rather than having to wait for government action.

The federal government’s consumer watchdog, ACCC, has instituted proceedings in the Federal Court against Airbnb for allegedly misleading consumers.

In court documents, the ACCC alleges that from 2018 to 2021, Airbnb made false or misleading representations to thousands of Australian consumers by displaying prices on its website or mobile app for Australian accommodation using only a dollar sign ($), without making it clear that those prices were in US dollars.

The ACCC website alleges that the behaviour went further: “When thousands of consumers complained to Airbnb about being charged more than the displayed price, the ACCC alleges that Airbnb engaged in further misleading or deceptive conduct by telling many of them that it had displayed prices in US dollars because the user had selected this currency, when this was often not the case.”

“We allege that Airbnb’s misleading conduct meant that consumers were deprived of the opportunity to make an informed choice about whether, and at what price, to book their holiday accommodation on the Airbnb platform,” ACCC Chair Gina Cass-Gottlieb said.

“Despite thousands of consumers complaining to Airbnb about the way prices were displayed, Airbnb didn’t amend its booking platform until after the ACCC raised the issue.”

The watchdog is suing US-based Airbnb, Inc. and Airbnb Ireland UC, seeking declarations, injunctions, pecuniary penalties, orders for the compensation for affected consumers.

The ACCC legal suit follows another year of bad press for Airbnb.

Last year Airbnb was forced to suspend a Victorian host for banning guests who had received the Covid vaccine and for falsely claiming vaccinated people are infectious. The host refused to accept bookings from guests who had been vaccinated with “experimental C-19 gene therapy vaccines”.

In the Moorabbin Magistrates’ Court last month, the owner of an Airbnb property in Hepburn pleaded guilty to a charge of harassing a guest with a message saying she would “burn in hell”. The host was angered by the guest who left a review on a travel website saying his Airbnb rental was “Just OK”.

Four years of the ‘damp squib’

In 2018 the Victorian Government passed the weakest regulatory restrictions for short-term letting ever seen in Australia, to the delight of Airbnb.

After the tragic stabbing death of a young woman at a party in a short stay apartment in the Melbourne CBD at EQ Tower in July 2018, Premier Andrews stated that his government would look into tightening regulations for short stay Apartments.

Despite this promise, in August 2018 the Government passed the same legislation word for word that had been rejected by the Upper House as inadequate more than 12 months earlier.

The Government stated in its policy response that it would conduct a review in 2021 to see whether the new regulations were working and would seek feedback from stakeholders and resident groups at that time. However, this review was not inserted into the Bill and the Labor Government has not conducted the review.

The former Shadow Minister for Planning, David Davis once addressed Parliament to slam the government for reintroducing the same legislation which he labelled “weak”, “pathetic” and a “damp squib.” The Liberal Party told Parliament that it would seek to have this legislation amended if it were to form government at the next election. Ultimately however, the Liberal Party did not block the passing of the Bill when it came time to vote on the legislation and was absent from the chamber when it was put to the vote.

The outcome ranked as one of the worst cases of politicking and back-room deals seen in Parliament

Tom Bacon, CEO of Strata Title Lawyers said at the time, "The legislation is not worth the paper it is written on. These regulations are the lightest feather of a touch, and do not provide Owners Corporations with any meaningful way of regulating the issues associated with short-term stays. I would not advise Owners Corporations to uses these regulations; it would be a costly exercise and a waste of time."

What do we want?

‘We Live Here’ calls on the Andrews government to announce a policy overhaul before the November state election:

1. AMEND the Owners Corporation Act 2006 to regulate the short-stay industry – far beyond the scope of the woefully inadequate pro-Airbnb ‘party’ bill that was shamefully passed just before the election. The Airbnb ‘party’ bill made it even harder for Owners Corporations to recoup costs of damage and it completely ignored issues of security, amenity and community development – these issues must be addressed.

2. INTRODUCE a registration system to manage the burgeoning short-stay industry

3. RESTORE POWERS to Owners Corporations to make decisions about use of a lot, lost in Justice Riordan’s Supreme Court decision in July 2017

4. ENGAGE with ‘We Live Here’. Talk to us – we represent more than 350 buildings in Melbourne, Victoria, Australia and globally. More than 80% of Melbourne’s resident population lives in strata buildings. We can help you understand how to look after strata communities.

Mr Andrews, you must be aware that governments around the nation and around the world are grappling with the issue of short stays and the lack of affordable housing; and the various means of regulation being adopted by NSW, Tasmania, Western Australia, South Australia, Canberra, New York, Paris, London, Amsterdam, Berlin, etc.

Local councils in Victoria, tired of waiting for meaningful action from the state government are starting to implement their own versions of the most basic regulations to protect the community: Councils in the Yarra Valley, Frankston, and the Mornington Peninsula have each developed regulations around issues such as registration, day limits and accountability.

Covid provided a brief respite from short stays due to the significant drop in visitors. Disturbingly many commercial operators with swags of apartments, not just Airbnb, are now beginning to flood the market. Forget about the industry spin that it’s just “Mums and Dads wanting to a rent out a room in their own home” – we are witnessing a large-scale commercialisation of the residential market.

Right now, the government has an amazing opportunity to put Melbourne on the map by proactively implementing regulation before the whole short-stay issue gets totally out of hand once again.

You have seen what happens to a leader who does not listen to the electorate.

Please, Mr Andrews listen to your community. Talk to us. Hear us. Stand up for us.

With the fragrance of a federal election in the air, we have a sniff of party policies at a national level on short-stays.

A policy articulated by the Greens, courtesy of a statement in this masthead by Adam Bandt, national leader of the Australian Greens and federal MP for Melbourne, focuses on the socioeconomic impact of short-stays, including housing affordability.

Adam Bandt strikes at the heart of the issue, saying: “It’s hard to develop a sense of community when all the apartments around you are being flipped on sites like Airbnb. No one wants to feel like they’re living in a busy hotel.”

The MP’s stance aligns with what we have been forewarning in this column for some time now: namely that as we recover from the pandemic and we kickstart tourism again, it’s critical to implement controls on the use of apartments for short stays.

“As we recover from the pandemic, we need to invest in our communities, not simply let the market rip,” Adam Bandt said

Adam Bandt’s statement has some essential macro and micro elements. It acknowledges the impact of the proliferating short-stays on housing affordability and also refers to everyday high-rise challenges and cost imposts, such as accelerated damage to common property and the need for more security.

The statement also refers to the research the Greens have been conducting into policy solutions around the world, many of which have been detailed in this column.

We are looking forward to seeing the major parties issue policy statements, without holding our breath.

Owners Corporations Act – going in circles

The federal Greens’ focus on bigger-picture housing issues brings us back to a core issue at the state level here.

Frustratingly, the Victorian government has been constrained in comparison with NSW. In Victoria, OC rules, called bylaws in NSW, are technically defeated by planning regulations.

This peculiar limitation has seen Consumer Affairs Victoria (CAV) using the anomaly to exclude the issue from its reviews.

For example, in its Consumer Property Acts Review Issues Paper No. 2, Owners corporations, CAV specifically excluded the issue of whether OCs should be able to regulate short stays, deeming it “out of scope”. Aggravatingly, CAV in this review also characterised the issue of “short-stays” as being limited to the problem of parties.

The main point remains that serious reforms are needed in the planning laws:

“One issue that is beyond the scope of this [CAV] paper is whether owners corporations should be able to make rules prohibiting a certain use of a lot, where that use is permitted under the applicable planning instrument …”

All the CAV-led reviews and consultations have been risibly powerless to have any effect on the core democratic issue – the devolution of power to communities – despite having a ready model in NSW they could take as a basis and refine.

The so-called “Short-stay bill” has been an unmitigated failure. No recommendations from community consultations were acceded to. Planning issues have been ignored. Despite this, both major parties voted for the bill and it has been embedded, and effectively buried, in Sections 159A to 159F of the Owners Corporation Act 2006, Version 19 released on 1st December 2021. The review, promised by the government when it lobbied the opposition for its support, has now been avoided for two years.

Let’s stop the government’s excuses. The government needs to open a discussion about the challenging intersection of planning and consumer laws – a problem created by the arbitrary legal abstraction of our lives into “departments”.

“We Live Here” will vigorously pursue reforms to the planning regulations to allow self-determination by high-rise communities in Victoria.

Australia lags behind

Globally, there is abundant evidence that short-stays have had an immense impact on communities and housing affordability. We anticipate more socioeconomic research will be undertaken to assist regulators in developing workable frameworks for controlling the sector.

One important volume of research is Airbnb, Short-Term Rentals and the Future of Housing, by Professors Emeritae Lily M Hoffman and Barbara Schmitter Heisler, published in the USA. This book poses the question: how do Airbnb and short-term rentals affect housing and communities?

The two professors argue that the most disruptive impact of Airbnb and short-term rentals has been in communities where housing markets are stressed. The authors describe how that Airbnb incentivises speculation in residential housing.

The overall effect of short-term rentals, according to the authors, has been similar across countries and cities. Local responses have varied from less restrictive in Australia to increasingly restrictive in the United States and most restrictive in Germany. Shockingly, Australia takes the title of “Highest penetration by Airbnb”.

The book claims that while Airbnb has made some concessions, it has not given any city the data needed to enforce regulations efficiently, resulting in costly impacts on governments and ultimately, communities.

With the publication of this book, we are embarrassed and angry to find Australia classified a laggard, one of the most under-regulated jurisdictions for short-term rentals!

This should be a wakeup call for local, state and federal legislators: take notice of what is happening around the world and learn how to fix the problem here. Lagging behind is not fatal, remaining there is.

VCAT is about to be exposed to sordid details of drug and alcohol-fuelled sex parties and strippers enriching a short-stay operator in a Melbourne apartment complex.

Outraged families, couples and singles in the suburban building are fed up with the drugged and drunken behaviour of short-stay guests and the insidious threat to residents’ safety and security. While residents have managed to get the short-stay operator banned from Airbnb and Stayz, the hens nights and bucks parties continue unabated.

One of the residents contacted us to describe the impact of the battle with the absentee sex party operator:

“This long-term behaviour has caused many problems. Most of the OC’s time and money has been spent on dealing with the appalling situation: the maintenance and the security issues of having hordes of drunk and drugged people roaming the common areas between our apartments, lift areas, carpark and everything that comes with that!”

So far, there have been zero VCAT cases where orders have been made with damages awarded in favour of a complainant in this type of scenario under the so-called short-stay party bill. Let’s hope we see a precedent set in this case.

One option for which the owners corporation may consider seeking advice is the new legislation regarding the benefit principle. The recent amendments to the Act cover scenarios where an owners corporation may be allowed to charge additional maintenance and security costs to a Lot owner benefitting from the service.

Short-stay action around the nation

NSW: The short-stay operators register is scheduled to become publicly available this month. The legislation introduced in 2021 allowed for operators to be banned for repeated or gross breaches of the regulations. Open access to the register is essential for communities to be able to check on the status of operators. The most important aspect of the NSW legislation is the empowerment of owners corporations to vote on adopting by-laws (called rules in Victoria) that regulate short-term rental accommodation in their building. For example, an owners corporation in NSW can legally limit short-stays to lots that are the host’s principal residence, such as during a temporary absence. This reform is desperately needed in Victoria.

Tasmania: A mandatory registration system requires operators to have planning approval. Platforms like Airbnb can only market and sell permitted, registered and approved short-stay accommodation. The government has suggested that taking further measures should be up to local councils.

Hobart: Hobart City Council has implemented the first stage of a ban on new whole-home, short-stay accommodation in the inner-city area. Hobart Lord Mayor Anna Reynolds said: "This is really just trying to provide some balance in our housing market in Hobart so it's more affordable and more accessible to people who need to rent a home."

Western Australia: The WA state government has released a draft planning policy outlining proposed regulations for short-term rental accommodation. The government is proposing a registration system and a cap on the number of nights before planning approval is required. The recommendations also include giving powers to owners corporations to limit short stays. The draft planning policy is part of the WA government's response to the recommendations of the 2019 Parliamentary inquiry and report, 'Levelling the Playing Field - Managing the impact of the rapid increase of Short-Term Rentals in Western Australia'.

Queensland: Short stay operators must have council approval in Brisbane and Gold Coast. A recent QCAT precedent has upheld an owners corporation rule to limit short stays, based on a community amenity argument.

Brisbane: The short-term rental of an entire apartment by the property owner requires development approval from the council. The council defines ’short-term’ as a stay of less than three consecutive months. The development application is assessed by council against the short-term accommodation code in the City Plan. The council says that its City Plan is designed primarily to ensure that “adjoining (sic) residents or businesses are not significantly impacted by the use.”

Gold Coast: In addition to enforcing its approval process, the council has amended its planning laws to ban or regulate so-called “party houses” with changes that have been criticised as inadequate.

Noosa: Not content with waiting for the state government to act, Noosa Council has introduced a registration and approval process, a mandatory code of conduct and a 24/7 council complaints hotline. The council will act as the intermediary between the complainant and short-stay operators. The council also gave itself the power to deploy security services to observe and record activity at properties. The council says it will recoup administration costs through fees and property rates with a special rating category for short stay properties.

The new laws were enacted after a stakeholder consultation process where the council says it was exposed to the depth of community frustration and anger.

South Australia: The SA government has drafted the Short Term Holiday Rental Accommodation Bill’ with a statewide mandatory registration system of all listed short-term holiday rentals and a mandatory industry code of conduct. Proposed penalties for breaches range from $1250 for loss of amenity to $5000 for failure to register. Platforms like Airbnb could be fined for failure to show a registration number in a listing. Operators could be compelled to pay disaffected neighbours $2000 in damages – and multiple residents could apply for compensation from an operator. While there is no upper limit on the aggregate payment awarded, it must be ‘proportionate’ to the loss of amenity.

Last and least, Victoria: There is no effective state-wide regulation for short stays. The current, very limited short stay ‘party’ legislation has resulted in no orders against operators since it was introduced three years ago. On our assessment, Victoria is the least regulated of all states: Operator registration is not required, owners corporations have no powers to regulate short-stays, and the very low ‘party’ penalties are virtually impossible to enforce.

Come on Victoria, let’s catch up with the rest of the country! We are lagging far behind the tamest of reforms. “We Live Here” will continue to advocate for the Victorian state government to learn from the progress made in other states and implement urgent reforms.

With the fragrance of a federal election in the air, we have a sniff of party policies at a national level on short-stays.

A policy articulated by the Greens, courtesy of a statement in this masthead by Adam Bandt, national leader of the Australian Greens and federal MP for Melbourne, focuses on the socioeconomic impact of short-stays, including housing affordability.

Adam Bandt strikes at the heart of the issue, saying: “It’s hard to develop a sense of community when all the apartments around you are being flipped on sites like Airbnb. No one wants to feel like they’re living in a busy hotel.”

The MP’s stance aligns with what we have been forewarning in this column for some time now: namely that as we recover from the pandemic and we kickstart tourism again, it’s critical to implement controls on the use of apartments for short stays.

“As we recover from the pandemic, we need to invest in our communities, not simply let the market rip,” Adam Bandt said

Adam Bandt’s statement has some essential macro and micro elements. It acknowledges the impact of the proliferating short-stays on housing affordability and also refers to everyday high-rise challenges and cost imposts, such as accelerated damage to common property and the need for more security.

The statement also refers to the research the Greens have been conducting into policy solutions around the world, many of which have been detailed in this column.

We are looking forward to seeing the major parties issue policy statements, without holding our breath.

Owners Corporations Act – going in circles

The federal Greens’ focus on bigger-picture housing issues brings us back to a core issue at the state level here.

Frustratingly, the Victorian government has been constrained in comparison with NSW. In Victoria, OC rules, called bylaws in NSW, are technically defeated by planning regulations.

This peculiar limitation has seen Consumer Affairs Victoria (CAV) using the anomaly to exclude the issue from its reviews.

For example, in its Consumer Property Acts Review Issues Paper No. 2, Owners corporations, CAV specifically excluded the issue of whether OCs should be able to regulate short stays, deeming it “out of scope”. Aggravatingly, CAV in this review also characterised the issue of “short-stays” as being limited to the problem of parties.

The main point remains that serious reforms are needed in the planning laws:

“One issue that is beyond the scope of this [CAV] paper is whether owners corporations should be able to make rules prohibiting a certain use of a lot, where that use is permitted under the applicable planning instrument …”

All the CAV-led reviews and consultations have been risibly powerless to have any effect on the core democratic issue – the devolution of power to communities – despite having a ready model in NSW they could take as a basis and refine.

The so-called “Short-stay bill” has been an unmitigated failure. No recommendations from community consultations were acceded to. Planning issues have been ignored. Despite this, both major parties voted for the bill and it has been embedded, and effectively buried, in Sections 159A to 159F of the Owners Corporation Act 2006, Version 19 released on 1st December 2021. The review, promised by the government when it lobbied the opposition for its support, has now been avoided for two years.

Let’s stop the government’s excuses. The government needs to open a discussion about the challenging intersection of planning and consumer laws – a problem created by the arbitrary legal abstraction of our lives into “departments”.

“We Live Here” will vigorously pursue reforms to the planning regulations to allow self-determination by high-rise communities in Victoria.

Australia lags behind

Globally, there is abundant evidence that short-stays have had an immense impact on communities and housing affordability. We anticipate more socioeconomic research will be undertaken to assist regulators in developing workable frameworks for controlling the sector.

One important volume of research is Airbnb, Short-Term Rentals and the Future of Housing, by Professors Emeritae Lily M Hoffman and Barbara Schmitter Heisler, published in the USA. This book poses the question: how do Airbnb and short-term rentals affect housing and communities?

The two professors argue that the most disruptive impact of Airbnb and short-term rentals has been in communities where housing markets are stressed. The authors describe how that Airbnb incentivises speculation in residential housing.

The overall effect of short-term rentals, according to the authors, has been similar across countries and cities. Local responses have varied from less restrictive in Australia to increasingly restrictive in the United States and most restrictive in Germany. Shockingly, Australia takes the title of “Highest penetration by Airbnb”.

The book claims that while Airbnb has made some concessions, it has not given any city the data needed to enforce regulations efficiently, resulting in costly impacts on governments and ultimately, communities.

With the publication of this book, we are embarrassed and angry to find Australia classified a laggard, one of the most under-regulated jurisdictions for short-term rentals!

This should be a wakeup call for local, state and federal legislators: take notice of what is happening around the world and learn how to fix the problem here. Lagging behind is not fatal, remaining there is.

Why do we need a dark sky?

We strive to shine a light on the dark corners of the political world. Outside in the physical world, there is a strong argument for allowing natural, celestial light to be revealed in darkness.

Of course, we refer to the night sky and the problems associated with light pollution.

Our attention has recently been drawn to this issue by the International Dark Sky Association (IDA) through their Victorian Branch (IDAVic). The main aim of IDA is to maintain the beauty of the night sky for generations to come and to support good lighting fixtures which are also environmentally friendly.

For example, there can be serious unintended environmental, ecological, safety and health consequences from commencing a LED street lighting program without careful planning.

For more information and to learn how you can become involved, visit the IDAVic website at darkskyvic.org.