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Adjournment: Short stay accommodation

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Samantha Ratnam
Leader of the Victorian Greens
21 June 2022

My adjournment matter tonight is for the Minister for Consumer Affairs, Gaming and Liquor Regulation, and the action I seek is that she expedites the overdue post-implementation review of the Owners Corporations Amendment (Short-stay Accommodation) Bill 2016. As the world begins to open up, we are seeing an increase in the number of visitors to our cities and regions and an increase in the number of Airbnb and other short-stay guests. We acknowledge the benefit that short-stay platforms offer to residents wishing to rent out their home while they are away. Too often entire properties are turned into holiday rentals 365 days of the year. Home owners and residents who have moved into high- and medium-density living in search of a community can find themselves instead living in a busy hotel. We need to strike a balance, allowing genuine residents to rent out their homes on a short-term basis without letting the short-stay industry run rampant over our communities.

In Victoria we have not got that balance right. Victoria continues to lag behind the rest of the country in properly regulating the short-stay industry. Other states have cracked down on the industry, for example, by capping the number of days a property can be let out as a holiday rental, requiring all hosts to register their properties before they can be listed or allowing owner corporations to make rules restricting the operation of short stays in their building. Some states have even done all the above, like New South Wales, but Victoria has dropped the ball. The only measure we have taken is to introduce penalties for unruly parties or damage caused as a result. The government promised to conduct a review into the operation of the new party rules within two years. But over three years since these changes came into effect we are still waiting, and in that time I have heard that zero orders have been made against short-stay operators under the new provisions.

We are once again facing a rental crisis, which is only likely to worsen as inflation increases. Rents are skyrocketing, up 5.7 per cent in Melbourne since this time last year, and the median cost of renting a house in Melbourne is at a record high of $450 per week. Rents in the regions are not far behind at a median of $420 a week, an increase of a massive 9.1 per cent since last year, and the number of available rentals is plummeting back to the prepandemic levels of a 1.6 per cent vacancy rate. But the short-stay industry is booming. Right now there are around 15 000 active short-stay rentals in the city, the majority of which are entire homes. Victoria needs to step up. A good place to start would be to review the current regulation around short stays, including reviewing how effective the short-stay party provisions have been. I ask the minister to release the overdue post-implementation review of the Owners Corporations Amendment (Short-stay Accommodation) Bill 2016.

Answered: 14 July 2022

The Victorian Government is committed to ensuring fair, safe and secure housing for all Victorians. This includes providing a fit-for-purpose regulatory framework for curbing unruly short-stay parties in CBD apartment buildings, ensuring that impacts to residents’ safety and amenity within their homes are managed effectively while also providing a sustainable supply of short-stay accommodation to Victoria’s tourist economy. 

The Owners Corporations Amendment (Short-stay Accommodation) Act 2018 (Short-Stay Act) came into effect on 1 February 2019, inserting new powers into the Owners Corporations Act 2006 aimed at protecting the liveability of apartment buildings by responding to issues arising from problematic short-stay arrangements. 

Firstly, it allows owners corporations to issue breach notices in relation to excessive noise, interference with resident’s enjoyment of their units and of the common property, obstruction of common property and property damage. 

Secondly, it empowers the Victorian Civil and Administrative Tribunal (VCAT) to award loss of amenity compensation of up to $2,000 per breach to affected residents, impose civil penalties of up to $1,100 on short stay occupants for breaches of the conduct proscriptions and make orders prohibiting the use of an apartment for short-stay where there are three or more breaches of the conduct standards in a 24 month period. 

Short-stay accommodation providers have been made jointly and severally liable with short stay occupants for satisfying any civil penalty and compensation orders, as well as any orders for damages or rectification arising from damage to common property in the apartment building caused by the short stay occupants. 

As part of the Victorian Government’s response to the Environment and Planning Committee’s Inquiry into the Bill, we committed to undertaking a post-implementation review of the Short-Stay Act. The review will examine the operation of the short-stay requirements and investigate whether further amendments are required to strengthen owners corporations rule-making powers in relation to short-stay accommodation, and the potential costs and benefits of a registration and compliance framework for short-stay accommodation providers. 

As the tourism sector was heavily disrupted during the pandemic, the post-implementation review will be undertaken as part of the mandatory statutory review of the recent legislative reforms to the Owners Corporation Act 2006, which is due to be undertaken between 2023 and 2026. Combining the reviews will allow for more extensive data collection to be undertaken and assessment of the amendments, while also ensuring consistency with the broader review into Owners Corporation legislation and regulation. 

The Government will continue to closely monitor the impact and effectiveness of the reforms as the Victorian tourism industry picks up pace again following the impacts of COVID-19 over the past few years.

 

The Hon Melissa Horne MP

Minister for Consumer Affairs, Gaming and Liquor Regulation

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Samantha Ratnam
Leader of the Victorian Greens
21 June 2022
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