Short-term holiday rentals in Byron Bay now subject to a 90-day cap to address housing crisis

A new 90-day cap on holiday letting in parts of the Byron Shire aims to help relieve some of the pain of the worsening rental shortage that has been exacerbated by COVID-19 and recent floods.

A proposal to limit stays in short-term tourist rental properties was first proposed almost three years ago, and Mayor Michael Lyon said the council now has the go-ahead from the New South Wales Government.

The cap is set to be enforced from June 2024, giving landlords enough notice to arrange future bookings.

A new 90-day cap on short-term rentals is hoped to bring hundreds of properties back onto the long-term rental market. Picture: Getty

“The compliance system in NSW is completely non-existent,” Mr Lyon said.

“What we’ve been lobbying for is the 90-day cap and we have been lobbying hard for that. We wanted a zero day cap for key residential areas, but they ruled that out back in 2019, but we’ve been offered this, so we will take what we can get.”

Mr Lyon said the cap will hopefully free-up hundreds of properties and bring them back onto the longer-term rental market.

“It was important to have this passed because of the dire situation our residents are facing. You’ve got so many people who are living on lounge room floors, living in cars, and this was all before the floods.”

The council declared a “housing emergency” in March 2021 but Mr Lyon said there was little that could be done – until now.

“It’s not a silver bullet, but we do hope that because of this we will see hundreds of homes come back onto the rental market.”

As of June 2022, there are more than 1000 Airbnb properties available for short-term lease across the Byron Bay region, including houses, apartments, and guesthouses.

The impact of short-term rental properties outnumbering the number of long-term rentals has already been felt.

A lack of accommodation has seen key workers leave the key, the council has said, with some business grappling with difficulties finding staff.

Precincts will be established

The new cap will apply to the majority of the Byron region, however some suburbs will be exempt – including the blue-chip beachside areas of Suffolk Park, Wategos, and Belongil.

Suburbs that will see the cap in place include Mullumbimbly, Ocean Shores, and Sunrise.

The cap also only applies to non-hosted short-term rentals, allowing hosts living on premise to still lease a room in their property.

“We couldn’t have 90 days across the region, so we had to pick some and it made sense for us to create precincts where you’re never going to get anything remotely affordable, even if it did become a long-term [rental],” Mr Lyon said.

“I think that landlords will either start selling, or look for longer term tenants and I don’t think either of those outcomes are a bad thing because it puts downward pressure on housing prices.”

Flood impact

COVID and the floods worsened the housing crisis in the Byron Bay region. Picture: Andy Summons

It’s not just Byron Bay putting caps on the short-term rental market, but areas in wider NSW too. A 180-day cap is already in place in Greater Sydney and Newcastle.

In Brisbane, it was recently announced that landlords who rent out their entire property for more than 60 days per year will soon pay 50% more in council rates.

In Hobart, which is also heavily dominated by short-term rental properties, a new law was passed in March put a halt on any new permits for homes being purpose built for short-term stays.

How do renters feel?

Claudia Wareham has been a renter in Byron Bay since 2020 and recently opened a yoga studio in town called State of Salt. Ms Wareham welcomed the council’s decision on the cap.

“I think it’s great because I have security of knowing a landlord is most likely to want me in their property for the other nine months of the year and that’s some security,” she said.

Renters are concerned with being evicted during peak tourist season. Picture: Getty

Ms Wareham is currently on a six-month lease at her home, which is common in the Byron Bay market, and said she doesn’t mind the arrangement.

“I had never heard of a six-month lease before living here, actually. I feel comfortable with shorter leases in Byron as it seems to be what everyone does and I get to experience living in different areas.”

However, other tenants are concerned about what will happen come summertime when tourists flock to the area and landlords are enticed to profit from demand.

“Undoubtedly that has been expressed as a concern,” Mr Lyon said.

“There will be a bit of that [nine-month leases] going on, but that’s still better for us given the crisis that’s going on, to have people in a home rather than sleeping in their cars.

“But also there are a lot of people who come to Byron as transient workers who only want a six-month lease.”