Sydney residents angered by Airbnb impact

Reports state that while Airbnb, Stayz, Gumtree and other such online holiday letting agencies are of great benefit to people, the owners and tenants of apartment blocks on the outskirts of Sydney's city center are suffering from their expansion. Companies such as Airbnb are a danger to such areas as they increase the prices on residential rentals and threaten the hotel industry, as they allow anyone to turn their home into a hotel. Within the 'Airbnb belt' in Sydney there are over 1,200 listings, and among the apartment block residents many of them are annoyed that their paid shared facilities are being renting out, sometime rented illegally. This problem is heightened by the fact that Airbnb refuses to remove listings, even when they know that the property is rented illegally. However, despite the anger expressed by local residents, reports also suggest that services like Airbnb are "here to stay", and that if residents cannot accept the change in their local economy, they ought to "move to the country".

Airbnb, Stayz, Gumtree and other online holiday letting agencies may be opening up local homes to tens of thousands of happy holidaymakers, but they are also bringing anger, misery and frustration to the residents of hundreds of high-rise buildings.

Cut-price holidays are forcing up residential rents, hammering the hotel trade and turning people’s homes into hotels, critics say. And the people suffering most are the owners and tenants in apartment blocks on the fringes of Sydney’s city centre. A recent Fairfax Media survey of the spread of Airbnb and other short-term rentals highlighted the serious threat that online holiday letting agencies are posing to apartment buildings in Sydney.

Apart from the seaside suburbs, the highest concentrations of short-term lets available in Sydney are in a band that sweeps from Central Station to the harbor through Surry Hills, Darlinghurst, Kings Cross and Potts Point.

Apartments in the suburbs on the fringe of the CBD are in high demand on Airbnb. Photo: James Alcock

Throughout that Airbnb belt, by far the greatest number of homes, including more than 1200 listings, are in apartment blocks. In Darlinghurst alone, according to the survey, one home in 15 is listed.

Airbnb and its ilk have taken off for good reason; not only can people who can’t afford hotel rooms travel, but they get to meet locals and share their knowledge of where to visit, eat and generally have a good time.

However, there is a difference between renting a room in a house and renting a whole apartment in an otherwise residential block. The former is questionable under some local zoning, but forgivable in many people’s eyes.

Cut-price holidays are forcing up residential rents, hammering the hotel trade and turning people’s homes into hotels, critics say. And the people suffering most are the owners and tenants in apartment blocks on the fringes of Sydney’s city centre. A recent Fairfax Media survey of the spread of Airbnb and other short-term rentals highlighted the serious threat that online holiday letting agencies are posing to apartment buildings in Sydney.

Apart from the seaside suburbs, the highest concentrations of short-term lets available in Sydney are in a band that sweeps from Central Station to the harbor through Surry Hills, Darlinghurst, Kings Cross and Potts Point.

Apartments in the suburbs on the fringe of the CBD are in high demand on Airbnb. Photo: James Alcock

Throughout that Airbnb belt, by far the greatest number of homes, including more than 1200 listings, are in apartment blocks. In Darlinghurst alone, according to the survey, one home in 15 is listed.

Airbnb and its ilk have taken off for good reason; not only can people who can’t afford hotel rooms travel, but they get to meet locals and share their knowledge of where to visit, eat and generally have a good time.

They call it the sharing economy, we call it the stealing economy.Kings Cross resident.

However, there is a difference between renting a room in a house and renting a whole apartment in an otherwise residential block. The former is questionable under some local zoning, but forgivable in many people’s eyes.

Away from the beaches, the highest concentrations of short-term lets are in a band that sweeps from Central Station to the harbor through Surry Hills, Darlinghurst, Kings Cross and Potts Point.

The latter is often not only illegal on several levels but can be disruptive and destructive, especially in communities where first-time apartment residents are wrestling with the issues of communal living. Last year, more than 450,000 lets were organised in NSW through Airbnb, according to a Fairfax report, 25,000 of them for the Christmas and New Year period. But it’s the city fringe areas that have the highest concentrations of apartment blockswhere the Airbnb battle lines are being drawn.

“They call it the sharing economy, we call it the stealing economy,” said one resident of an upmarket Kings Cross apartment block where notices have appeared warning residents that short-term lets, specifically through Airbnb, are illegal and may lead to penalties.

“We pay for all the shared facilities and then someone comes along and rents them out to holidaying families, or, even worse, partying hoons, so you don’t know from one day to the next who your neighbours will be.”

A survey of 34 Sydney councils by Domain last year revealed that only six of them allowed short-term lets, yet Airbnb claims there are 150,000 properties available across the city.

Exacerbating the problem for permanent apartment residents is that Airbnb refuses to remove listings, even when a property is clearly proven to be rented illegally. A spokesman told Domain last year that Airbnb’s policy was to pass any complaint on to the offending host and let them decide whether or not to continue with the listing.

Sydney is far from alone in wrestling with this issue. In 2014 New York state’s attorney-general forced the company to hand over its files and discovered that 72 per cent of Airbnb rentals there were illegal. Concerned at an upsurge in the cost of residential rents, the city hit back, fining owners who allowed short-term lets in residential buildings while tenants were evicted from rent-controlled apartments they had illegally sublet for huge profits.

Another accusation aimed at short-term lets is that they harm the hotel trade and lead to job losses. One would be forgiven for wondering how many investors in the planned Omnia apartment building in Airbnb hotspot Kings Cross, which will replace 226 bedrooms in the Crest Hotel with 135 luxury apartments, are quietly hoping to cash in with holiday lets.

The state government’s environment and planning committee closed submissions to its inquiry into short-term and internet-based letting in November last year and we await their report. Ironically, however, arguably Sydney’s most obvious example of illegal short-term letting is not only right on Macquarie Street’s doorstep, but features three current and former Coalition MPs.

They are part of a power group steadfastly defying efforts to prevent short-term lets in the notorious Bridgeport building in Bridge Street, despite a Land and Environment Court ruling last year that holiday lets are in breach of the building’s development application.

Bizarrely, the NSW Civil Administration Tribunal, which resolves strata disputes, was last year unmoved by indications that at least one-third of the Bridgeport’s 160 units were illegally let, as well as allegations of bullying of whistleblowers.

The Tribunal, which comes under the aegis of the Attorney-General’s office rather than Fair Trading, can appoint a professional strata manager to take control of a dysfunctional building. It, and its predecessor, the CTTT, both found the Bridgeport to be adequately managed.

The issue of short-term letting is spreading throughout Australia and while the law is ignored in Sydney, it actually allows short-term lets in Melbourne’s Docklands.

There the combined efforts of residents and the city council failed in legal action to curb short-term lets in the notorious Watergate building which had been plagued by weekend bucks parties, allegedly with strippers, hookers and drunks running riot in the hallways.

An application to the Victorian Civil Administration Tribunal to enforce a minimum 30-day residential limit on apartments was knocked back late last year on the grounds that the Owners Corporation was trying to act as a planning authority.

The building’s managers told ABC television this week that they are forced to employ two security guards on weekends because of short-term lets, costing other owners $100,000 a year.

However Paul Salter, whose Docklands Executive Apartments business operates holiday and short-term rentals in the Watergate, said he was legally entitled to rent the apartments for whatever periods visitors chose and the employment of the security guards was unnecessary.

In the meantime, high-rise owners and residents in Melbourne have formed an action group called We Live Here to push for tighter restrictions of the use of residential buildings. And there are whispers that the state government is looking at amending planning and strata laws to allow the majority of owners to choose how they want their buildings to operate.

“Airbnb is here to stay,” Mr Salter told the ABC. “If you cannot embrace change, and you want a quiet life, then possibly what you need to do is possibly sell your property, buy a farm and move to the country.”

However, long-term strata resident groups like We Live Here and Sydney’s Owners Corporation Network, see apartments as already being part of a sharing economy. And they don’t see why individuals should take more than their fair share, disrupting other owners’ and tenants’ lives, for their personal profit.

Jimmy Thomson writes the Flat Chat column for Domain, runs the related advice website at flat-chat.com.au and edits Title online magazine for apartment residents.