Community versus profit – the short-term rental dilemma

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New rules for holiday rentals recently introduced by the State Government promise to bring more consistency to short-stay regulation, but they also reveal the delicate balancing act between managing short-term rentals and creating liveable communities.

Recent amendments to Western Australia’s planning regulations include the introduction of a statewide register for all short-term rental properties, planning exemptions for hosted short-term rentals and a new 90-night development approval exemption for unhosted holiday rentals in the Perth metropolitan area.

These changes bring much-needed clarity to the sector, allowing developers to better understand the potential uses of the properties they create and potentially opening new markets and investment opportunities.

On the flip side, however, giving flexibility to local governments in regional areas to determine their own planning approval requirements for unhosted holiday homes could lead to a patchwork of regulations across the state.

This inconsistency might create market distortions, potentially driving investment away from areas with stricter regulations and towards those with more lenient rules.

The changed regulations also give little consideration to the potential negative impacts on long-term rental availability due to properties being converted into short-stay accommodation.

As many Western Australians continue to grapple with a housing affordability crisis, a proliferation of short-term rentals reduces stock available for long-term leases, potentially exacerbating housing shortages in high-demand areas.

While there are generous incentives available for property owners that convert short-stay properties to long-term rentals, it is important for local and state governments, as well as the development sector, to think bigger.

We need policies that do more than simply manage short-term rentals. They need to ensure we’re building communities not just accommodation.

Importantly, these regulations highlight the need for innovative approaches to urban planning.

As developers, we should be exploring mixed-use developments which can accommodate both long-term residents and short-stay visitors in harmony.

This could involve designing buildings with dedicated short-stay sections or creating communal spaces fostering a sense of community regardless of length of stay.

We also need to consider the impact on local infrastructure and services. An influx of short-term visitors can strain resources in ways different from long-term residents.

By addressing these challenges proactively, we can create more resilient, adaptable urban spaces benefiting all Western Australians.

The development sector is a dynamic industry and all stakeholders need to be ready to be flexible, but we also need governments and planning authorities to give us a clear long-term vision.

Short-term rentals have their place but not at the cost of liveable, affordable neighbourhoods.

As we move forward, let’s make sure our planning creates cities which work for everyone who calls WA home – whether for a night or a lifetime.

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