NSW Government tightens the cap on Airbnb and short-term rental accommodation in Byron Bay

By Sarah Waters

It’s only one part of the puzzle in solving Byron Bay’s complex housing crisis, but Airbnbs and other short-term holiday accommodation in most parts of the Shire can only be rented 60 days a year.

The NSW Government made the major announcement last week.

It came in response to the Independent Planning Commission’s (IPC) recommendation to cap un-hosted short-term rental accommodation from 180 days to 60 days a year, in a bid to return more long-term rentals to the market.

Byron Shire Council supported the 60-day cap and has been waiting, since April, for NSW Planning Minister Paul Scully to accept or reject the IPC recommendation.

The sweeping change will not affect hosted short-term rentals (where the host lives on the property during the stay) which can still be rented out 365 days a year.

Precincts in Byron Bay and Brunswick Heads, identified by council as having ‘high tourism appeal’ will be able to operate without a cap – allowing homes to be used as short-term rentals all year.

There will be a 12-month transition period for the community and industry to prepare before the new rules take effect on September 26 next year.

Planning minister Paul Scully said the undersupply of affordable housing in the Byron Shire largely affected key workers and permanent residents.

NSW Planning Minister Paul Scully will continue to monitor Byron Shire Council’s housing supply plans

“These changes to short term rental accommodation only addresses part of Byron’s housing supply and affordability issues,” Mr Scully said.

“It was important for me to clearly understand council’s plans to deliver more housing through other mechanisms, before making a decision on the proposal.

“After reviewing council’s housing response … I have decided to endorse the new cap across parts of the Byron Shire, as recommended by the IPC,” he said.

The Department of Planning and Environment will continue to work with Byron Shire Council to monitor its commitment to increase housing supply.

Council needs to supply more than 4500 houses by 2041 to meet its housing targets, set by the NSW Government.

In council’s recently released Housing Options Paper it outlines plans to deliver homes, by releasing more land for development and creating new dwellings on vacant or under-utilised land.

Mr Scully said he recognised short term rental accommodation was a complex matter in the Shire, given the region’s unique and exceptional circumstances as one of Australia’s most visited tourism destinations.

But it was crucial more homes were returned for permanent residency, particularly to have workers in the visitor economy.

“In the current housing crisis, it’s important every available means to boost housing stock for the community is utilised, including a shift from non-hosted short term rental accommodation (STRA) to long term rentals,” he said.

Byron Shire Mayor Michael Lyon said he welcomed the NSW Government’s decision, which ‘broadly aligned’ with a couple of the key recommendations put forward by the IPC earlier this year.

“The planning minister has acknowledged the shortage of permanent housing supply in the Byron Shire and the impact STRA is having on people’s ability to find stable, long-term accommodation,” Mr Lyon said.

“We have always said that regulating STRA will not solve the housing crisis in our Shire, but it will increase the pool of long-term rental accommodation which is so vital for people, especially key workers and those on lower incomes,” Mayor Lyon said.

Byron Shire Mayor Michael Lyon says council is committed to delivering more housing for its residents

The state government became involved in council’s housing plans late last year, just before it was about to introduce a 90-day cap on short-term holiday accommodation in parts the Shire.

In December 2022, the former NSW planning minister, asked the IPC to provide advice about housing supply issues in the Byron Shire as well as council’s planning proposal.

The IPC held a public hearing and accepted community submissions.

In April this year, the IPC finalised its review and provided its advice.

The IPC’s report suggested a 60-day cap would send a stronger market signal to encourage a shift from non-hosted STRA uses to long term rental.

The cap was one of 12 key recommendations it made in its report.

At this stage, the government will not adopt all of the recommendations, but will take them into account as part of its broader state-wide STRA review later this year.

NSW Premier Chris Minns said to solve the housing crisis there simply needs to be more supply of housing and it can’t just be put on Airbnb and other short-term rental accommodation providers.

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