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A Review of the Impacts of Short-term Rental Accommodation in Queensland

Executive Summary:

This report was commissioned by the Queensland Department of State Development, Infrastructure, Local Government, and Planning (DSDILGP) to investigate the impact that short term rental accommodation (STRA) is having in Queensland. An important issue that this work directly analyses is the impact of STRA on housing affordability and availability. It also explores the impacts of STRA in key tourism areas and seeks to provide evidence-based findings to address the key question of whether in general STRA is having a fundamental impact on housing supply or affordability. The report reviews the effect of potential regulatory and non-regulatory options that could be applied where impacts are identified.

Short-term rental accommodation (STRA) refers to accommodation that falls in-between visitor accommodation (e.g., hotels) and more formal long-term accommodation arrangements (e.g., property rentals). STRA have existed for many decades as ‘holiday lettings’ but have proliferated into new geographical settings due to the emergence of Airbnb and other digital platforms. Thus, while STRA are not a new phenomenon in Queensland, the expansion of digital STRA platforms merits further investigation, particularly regarding the impacts on housing across the state. In the wake of the recent housing pressures faced in Queensland, a surge of interest has catalysed a series of interrelated questions regarding the impacts of STRA on housing supply, amenity impacts, and affordability.

Regression modelling conducted for this study to determine the relationship between rental affordability and STRA concludes that overall STRA is not a significant determinant of rental affordability statewide. It also finds no clear alignment between the suburbs where rents have increased the most and the percentage of dwellings in STRA. P6

The lack of accurate STRA data means limited ability to verify claims regarding geographical location, test the effectiveness of regulation, test the effect of STRA on affordability and housing supply, or the possible benefits of the availability of STRA in certain key locations. Further, the form of the data provided makes it difficult to accurately evaluate the economic impacts of STRA in any meaningful way.

The report makes two main recommendations. The first is the implementation of a STRA registration system that parallels experience in other Australian States. The second is that there is no evidence to support Statewide STRA restrictions.

The first recommendation if implemented will bring a number of benefits to both the STRA sector and broader community. It will provide for the establishment of a code of conduct, information guidelines, with helpful links to relevant agencies. It will assist with the enforcement and compliance with safety regulations. In addition, it will open the possibility for the establishment of a web portal explaining how to identify and define STRA and assist residents in all areas of the state to find links to the rules pertaining to STRA and the intensity of STRA usage in their suburb. This may help homebuyers and renters when considering where they want to locate. The report points out that STRA lettings where the host remains living in the property while the guests are present, are consistent with the traditional model of Bed and Breakfast accommodation and the origins of STRA companies like Airbnb. These align with recent discussions on the more efficient use of dwelling stocks infrastructure, and the intensification of dwelling uses in areas such as student and shared accommodation.

The second recommendation arises as there is no evidence to support statewide STRA restrictions. The rationale for this recommendation is that Queensland is a diverse state with a range of STRA scenarios, ranging from beachside ‘holiday lettings’ to urban shared rooms to farm stays. Councils themselves may differ in their perspectives—some may welcome STRA and others may not. The number of STRA statewide is found to be plateauing, as there are roughly the same number of STRA as there were in Q1 2020, and high rent prices seem to be persuading some hosts to return properties to long-term markets. Some councils, including Noosa and Brisbane, are already crafting their own legislation. The statewide focus should be on building consistent and accurate tracking data to enable local authorities to monitor STRA activity in their community, along with ensuring community needs are addressed and property rights are maintained.

In summary, we caution that while increasing STRA-intensity may be associated with rent increases or other negative amenity outcomes in a limited number of hot-spot locations, we have not been able to statistically determine if the STRA-intensity is causing these outcomes or is merely a consequence of other factors playing out in these markets. It is also likely that the impact of negative outcomes may concentrate in some segments of the population while benefits associated with the changing desirability of these areas may accumulate to a less concentrated segment of the population (e.g. business owners, real estate investors, visitors to these regions, or workers in these locations), some of whom might not reside in the same area.

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