Location Rules as Byron Shire’s Airbnb Ban Greenlit

How close a home is to a Byron beach will help dictate if it can be used as a short-term rental under the rules introduced in New South Wales this week.

Planning minister Paul Scully announced the Byron Shire Council would be permitted to put a cap on short-term rental accommodation in the shire. 

Non-hosted short-term rental accommodation will be capped at 60 days per 36d days.

“It’s well known there has been an undersupply of housing, particularly affordable and diverse housing, across the Byron Shire for many years,” Scully said.

“This shortage of housing largely affects key workers and permanent residents.

“Given the region’s unique and exceptional circumstances as one of Australia’s most visited tourism destinations, it is crucial housing supply shortages are addressed and more homes are returned for permanent residency, particularly to have workers in the visitor economy.”  

Byron Shire Council had submitted to the state government a planning proposal for capping operation periods for short-term rental accommodation to incentivise using the properties for long-term rentals.

The council identified precincts in Byron Bay and Brunswick Heads as having high tourism appeal, near beaches and services, that should be exempt from the cap, therefore allowed to host short-term rentals year-round. 

In December, 2022 the Independent Planning Commission was asked for advice on the housing supply issues.

The commission said that the cap should be tightened to 180 days from 60 days for each every 365-day period and that the 90-day cap proposed by the council was not enough. 

The Byron Shire Council put forward its planning proposal in April, 2023 after community consultation.

“The council’s original proposal to the NSW government and the IPC was for a 90-day cap on STRA in most parts of Byron Shire, with some 365-day precincts, while the IPC recommended a 60-day cap be applied across the shire, but with a development pathway for 365-days,” Byron Shire mayor Michael Lyon said.

▲ Byron Bay has experienced increased population growth as well as increased tourism visitation with house prices and housing demand following suite. 

Hosted short-term rentals where the host lives on the premises are exempt from this cap.

A 12-month transition period will preceed the the new rules coming into effect on September 26, 2024, ahead of the 2024-2025 summer tourist season.  

The housing crisis in Byron Shire differs from other locations in NSW in regards to the percentage of short-term rentals increasing, along with population growth, skyrocketing house prices and demand for housing. 

It is hoped the decision will help support more permanent housing for key workers and long-term residents. 

“These changes to short-term rental accommodation only address part of Byron’s housing supply and affordability issues, and it was important for me to clearly understand the council’s plans to deliver more housing through other mechanisms before making a decision on the proposal,” Scully said.

The NSW Department of Planning and Environment will now help the council monitor its commitment to increase housing supply and deliver more than 4500 houses by 2041. 

The decision also means that development application pathways for non-hosted short-term rental accommodation beyond a 60-day cap are not recommended because it would require more time and legal input to develop a workable approach. 

“The announcement is part of a broad government response to our planning proposal, and we now need to take some time to review and digest this information and start planning for the implementation of the changes which will take effect from September 2024,” Lyon said.

Elsewhere, in Greater Sydney and some self-nominated local government areas such as Ballina and parts of the Clarence Valley and Muswellbrook, the cap is set at a maximum of 180 days within any 365-day period. 

There is no cap for non-hosted short-term rentals elsewhere in the state with councils required to monitor compliance with the policy.  

Victoria’s housing statement released last week includes a 7.5 per cent levy on short-term stay platforms with funds derived put back into building social and affordable housing.

There are more than 36,000 short-term rentals in Victoria—nearly half are in regional areas.