Backlash builds against Airbnb party towers

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By Leith van Onselen

The backlash against short-stay apartment rentals through portals like Airbnb continues to fester after a series of wild parties were reported across Melbourne’s high-rise apartment complexes.

Melbourne residents’ group, We Live Here, is seeking powers to allow owners’ corporations to “ban commercial operations who have, say, 20 Airbnb apartments in one building”:

…new laws introduced by the Victorian Government last month… will make apartment owners liable for “damage, noise or loss of amenity” caused by short-stay guests, and fine guests up to $1100 for these types of breaches from February 1.

The Victorian Civil and Administrative Tribunal will have new powers to compensate neighbours up to $2000 and ban short-stay apartments repeatedly used for unruly parties…

[But] some high-rise residents would rather body corporations had the power to outright ban short-stay apartments in their buildings…

Since December, wild parties have trashed rentals in Altona, Werribee, North Melbourne, Footscray, Carnegie, Hawthorn East and the CBD. Police officers and neighbours have been assaulted and threatened, and 19-year-old Laa Chol was murdered at a CBD short-stay apartment hired for a party in July…

Mr Delves said his group We Live Here, which represented residents of more than 300 Melbourne buildings, didn’t “have issues with mums and dads” listing on Airbnb and other platforms.

It blamed “commercial operators” with multiple short-stay apartments, and wanted owners’ corporations to have the authority to reject them.

Figures by independent “activist project” inside Airbnb suggest more than a third of Melbourne hosts are offering multiple Airbnbs, making them “unlikely to be living in the property”, and 61 per cent of more than 20,000 listings are whole homes or apartments.

Mr Delves said the new Victorian laws did “absolutely nothing for owners or residents”, and merely took responsibility away from platforms like Airbnb.

There’s a simple solution to this mess: disallow Airbnb-style letting in an apartment block unless more than half the strata owners permit it. This would give owners the democratic choice as to whether they want their buildings used for short-stay accommodation.

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This is a broader problem that the deleterious impact on resident amenity, however. Short-term rentals are also crushing the traditional rental market in Melbourne, which is already under siege from mass immigration fuelled population growth.

Melbourne’s rental vacancy rate has crashed:

Despite dwelling supply rising in unison with population growth (albeit not by enough):

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The biggest losers, apart from the apartment dwellers effected by the unruly behaviour, are younger and vulnerable Melbournians unable to afford a home and stuck in the increasingly insecure rental market.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.