Accommodation providers seek ‘level playing field’ for Airbnb-style rentals

City councils are urged to create a “level playing field” for Airbnb-style rentals and charge commercial rates.

Nelson became the latest battleground this week in a nationwide campaign for absentee owners of Airbnb-style short-term rentals to abide by the same rules as commercial providers.

At a Nelson City Council meeting on Tuesday, around 30 lodging providers attended to support a Hospitality New Zealand presentation.

Hospitality New Zealand CEO Julie White spoke about the organization’s efforts to bring about change from central government, while Nelson’s lodging sector president Stacie Warren addressed the local situation.

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Warren said the council was losing more than $ 1 million each year in unpaid fees, and that many of the short-term rental properties fall under commercial rather than residential definitions.

He said now was the perfect time to address the issue, following the rapid growth of short-term hosting providers in recent years and the damage done to the industry by the Covid-19 crisis.

“We have two platforms that offer the same product, but one is regulated and the other is unregulated,” Warren said.

“These companies offer accommodation to the public just as we do in our sector; our current goal is to ensure that all hosting providers comply with council regulations. “

He said more regulation would provide greater security for customers and could help ease the burden on Nelson’s overheated rental market.

Figures provided by the Airdna website as of June 11 showed that there were 441 entire properties listed for short-term rental on Airbnb in Nelson.

Warren said for comparison, there are currently 38 commercial properties in Nelson offering 788 beds, and only 84 residential rentals are listed on Trademe.com.

From February to April, Airbnb occupancy (in Nelson) was 87%, with commercial properties only 54%.

She said that according to the current Nelson Resource Management Plan, people who provide their property for short-term housing while living off-site do not meet standards for residential activity.

If those same properties were subject to commercial rates, the city would get more than $ 1 million in revenue per year, he said.

One of the most profitable Airbnb properties made $ 131,000 in revenue per year, but only paid $ 1,397 in annual residential fees, he said.

“We are not here because we want to get rid of these properties, we just want those properties to comply with the same rules and regulations as us, we want a level playing field.

“These properties are businesses and we believe they should be treated like businesses.”

Warren said the council should increase its resources to be able to follow existing legislation, enforce fines and monitor the sector in the same way it did with commercial accommodation.

He also requested the council’s support for a proposal from Hospitality NZ to the central government, to establish a property registry for short-term accommodation providers.

Mayor Rachel Reese said there was a need for central government regulation on the issue, and that the Rating Act provides some significant challenges.

“One would logically think that if a company had to obtain the consent of the resources to operate for a commercial activity, that would translate into the Qualification Law, but the advice for me so far is that it is not.”

Reese said a number of issues were raised that the council could consider in its Long-Term Plan.

“We are a city where the affordability of housing is our main problem.

“What you can see from these numbers is that we have a lot of properties that are not available for residential use … if that regulation would make a difference, I don’t know, but I think we have an obligation to explore this further.”