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By Michael Crosby, Head of Public Policy Australia and New Zealand, Airbnb
The recent City of Sydney Council decision to investigate a 60-night cap on short-term rental accommodation (STRA) stems from a genuine and pressing concern: Sydney is in the midst of a housing crisis. Rents are soaring, and vacancy rates are critically low. It’s a reality that affects everyone. However, making short-term rentals a scapegoat is not the answer, and the evidence shows that strict caps fail to address the root cause of the problem.
Evidence shows that night caps don’t work.
Before we go down the path of restrictive caps, we must look at the evidence. In Byron Bay, the introduction of a 60-night cap has not had the intended effect. Since its implementation, median house rents have surged by 13.6% to $1,250 a week, and the rental vacancy rate has fallen to just 1%. The promised flood of properties returning to the long-term market has simply not happened.
This isn’t an isolated phenomenon. Two years after New York City implemented a de facto ban on short-term rentals, hotel prices jumped 12.6%, more than triple the national average, and rents continued to rise.
Even the City of Sydney’s own research from last year found short-term rental accommodation “is not considered to be a major driver of the City’s housing market issues” and highlighted that STRA complements hotels, especially in tourist areas. The problem is not the availability of homes on the short-term market, it’s the systemic undersupply of housing. The solution is to build more homes and streamline the approvals process; work the NSW Government continues to prioritise.
Regulations are already in place, we just need to use them.
What is often missed in this debate is that NSW already has a world-leading and sophisticated regulatory framework for short-term rentals. It’s a system Airbnb has invested heavily in to help make it work. Key features include:
- Mandatory registration: Every STRA property in the state must be registered with the state government.
- A code of conduct: This applies to hosts, guests, and platforms, with a ‘two-strike’ policy that can see bad actors banned from all platforms for five years via a government-run exclusion register.
- Data sharing: This is the crucial part. Through a purpose-built IT system, platforms like Airbnb share data with the NSW Government. The government has a complete picture of how many nights each property is rented out across all platforms. Councils can access this data for their local areas.
The data and the tools for enforcement are already in place. As some councillors noted recently, a “rule is as only as good as its enforcement”. The challenge isn’t a lack of regulation, rather it’s that there are parallel enforcement obligations that sit with both the state as well as local governments. We need to make sure that local councils can easily access and act on the data the state government already holds, and that compliance obligations are better understood.
Let’s strengthen the existing framework in place.
Instead of overburdening a robust system, we should be focused on refining it. If the City of Sydney remains committed to looking at other jurisdictions’ rules, they should also be reflecting on what works well in the existing NSW system.
And let’s not forget that for everyday Australians, hosting provides a safety net to help cover the mortgage or rent, keep up with rising bills, and stay in the communities they call home. STRA also plays a vital role in supporting Sydney’s economy. It provides flexibility for visitors during major events like Mardi Gras, New Year’s Eve and Vivid, supporting Sydney’s status as a world-class destination. In 2024 alone, Airbnb’s platform contributed $6.6 billion to the NSW GDP and supported over 32,000 jobs.
The housing crisis is real, and the solutions must be too. Sydney needs more homes and faster approvals. Let’s focus our collective energy on the proven answer: increasing housing supply. Let’s work together to optimise the strong regulatory framework we already have, rather than pursuing a policy that evidence shows will not work.
