Tougher standards for holiday rentals

•   Holiday rentals are on the rise across the North-East. Image from AirDNA.

By Daisy Baker ,
March 02, 2022

With short term accommodation rapidly on the rise across the North-East in recent years, legislation has struggled to keep up. 

The current development standards and regulations were a topic of discussion at last week’s council meeting. 

Cr McLennan asked whether local government should look at charging people who own Airbnb properties a rate like that applicable for hotels and motels.

Mayor Greg Howard responded that there is a motion that will be raised at the March LGAT meeting which seeks to introduce a variable rate, that would enable councils to charge visitor accommodation a separate rate.

“That’s something that’s coming up and something I would imagine we would strongly support,” he said.

“It would solve the problem at Derby where we have to charge them a waste levy because we can’t charge them any more as Airbnbs but if this got through, we’d actually be able to charge them an Airbnb rate.”

Currently there is rate of 7.63 cents in the dollar of AAV across all the industries and uses in Dorset, and Airbnb businesses in Derby alone are charged an additional $1,000 a year for waste management.

Mayor Howard said if the motion is successful at the March LGAT meeting, it could still be 18 months before it comes into play.

He said a new rate for short-stay accommodation would be largely dependent on how the Valuer General values Airbnbs when it revalues the municipality in 2023, given many of the premises were probably valued as residential properties at the last valuation. 

“In 2017 the Valuer General grossly underestimated the value and rental potential of houses in Derby,” Mayor Howard said. 

According to AirDNA, the amount of active holiday rentals listed on Airbnb and Vrbo reached a three-year high in Bridport and Derby in the final quarter of 2021, with 78 and 65 respectively.

Active rentals are those that had at least one reserved or available day in the last month.

In Bridport there are currently 72 active rentals 98% of which are entire home rentals, with the remaining private rooms.

On average, holiday rentals had 2.9 bedrooms and hosted 6.8 guests.

In Derby despite several dips in numbers in recent years, there has been a general upward trend since the final quarter in 2018 when there were 41 active rentals.

There are currently 66 active rentals in Derby, on average 2.6 bedrooms, sleeping 6.3 guests.

As for the visitor accommodation standards, the new planning scheme which will potentially begin later this year, will provide more specific development standards.

Council’s Draft Local Provision Schedule (LPS) was lodged with the Tasmanian Planning Commission (TPC) in late September 2021. 

Dorset Council town planner Thomas Wagenknecht said after several months of collaboration with the TPC representative, it is anticipated the draft Dorset LPS will commence its statutory 60-day public advertising period. 

“Pending feedback from the community and the final decision of the TPC, it is expected that the State Planning Provisions and Dorset’s LPS will come into operation as early as September 2022,” he said.

In the meantime, Council continues to operate under the Dorset Interim Planning Scheme 2013 and any Planning Directives issued by the State Government such as Planning Directive No. 6 – Exemption and Standards for Visitor Accommodation in Planning Schemes. 

“An unfortunate part of Planning Directive No. 6 (introduced in mid-2018) within the Dorset context is that while it provided for greater consideration of how the visitor accommodation use affects residential amenity it also substantially reduced the consideration able to be statutorily given to the building proper by bestowing the development component with an automatic permitted status,” he said.

“During this time, Council has endeavoured to work with developers and landowners upfront to encourage visitor accommodation buildings that are, as much as practicable, compatible with the residential areas that they are being proposed within.

“The future State Planning Provisions will address this situation by introducing specific development standards in residential zones for any non-residential use (for example visitor accommodation) – such as boundary setbacks, building height, and building envelopes – consistent with those also provided for residential developments. 

“These development standards will provide both clear acceptable solutions and corresponding performance criteria – considering matters such as loss of amenity through overshadowing and if the building has an excessive bulk and scale - to ensure more compatible outcomes in the future,” he concluded.