The City of Sydney council is investigating how short-term rentals, such as those listed on Airbnb, could be temporarily banned in suburbs experiencing low vacancy rates. On Tuesday, the council passed a motion directing the chief executive to explore opportunities for implementing such bans.
Existing Regulations and Proposed Measures
New South Wales already enforces a 180-day annual cap on short-term rentals in certain areas, including Greater Sydney. However, the council is examining whether a more targeted ban is necessary to improve housing availability. The investigation will focus on suburbs including Millers Point, The Rocks, Darlinghurst, Woolloomooloo, Ultimo, Haymarket, Kings Cross, Surry Hills, Potts Point, Chippendale, and Pyrmont. Other suburbs with persistent low long-term rental vacancy rates may also be included.
Key Considerations
The council is seeking detailed information on the duration of potential bans and the triggers for implementing them, such as vacancy rates falling below three percent. Councillors noted that the proliferation of short-term rentals is negatively impacting inner-Sydney neighbourhoods in terms of community connectivity, social cohesion, and housing affordability. They emphasised that both the NSW Government and the City of Sydney have a responsibility to take stronger action to address this issue.
Industry Response
Stayz, a popular short-term rental platform, argued that existing state regulations are sufficient to mitigate effects on vacancy rates. Eacham Curry, Stayz's director of government and corporate affairs, urged the council to refrain from implementing bans, day or night caps, guest number limits, or day fees, stating that such measures do not address housing concerns and could undermine the economic value of short-term rentals to local communities. He warned that local regulation could create unnecessary complexity and increase costs for guests, homeowners, and the community.
Previous Local Actions
Several councils have already taken local action to limit short-term accommodation. For example, Byron Bay introduced a 60-day cap in late 2024. The City of Sydney began investigating the effects of short-term rentals in May 2023, focusing on how holiday accommodations impact housing affordability and tourism benefits.
Government Stance
Premier Chris Minns stated on Tuesday that he wants to understand the concurrent impacts on the tourism sector. He noted that while the government has intervened in coastal towns with significant homelessness or housing shortages, these have been extraordinary measures. The council's investigation aims to determine whether similar interventions are needed in inner-Sydney suburbs.
