Airbnb’s head of policy says Sydney’s new rules to deal with wild parties and other problems could be a model for cities around the world

Crowds gather at Sydney Harbour on New Year’s Eve. Scott Barbour, City of Sydney/Getty Images

  • Airbnb hosts will be limited to having guests 180 nights a year under new sharing economy rules for the Sydney area.
  • Apartment buildings will be able to ban Airbnb use entirely from their buildings by a vote of property owners.
  • Airbnb’s head of global policy told Business Insider the rules could be a blueprint for Asia and other markets, especially for dealing with the “party house” problem.
  • He also suggested the regulations could lay the groundwork for a new tax levied on Airbnb guests.

Airbnb says tough new restrictions in Australia’s largest state on how properties are shared on its platform — including a maximum limit of 180 days of occupation — could be a model for the rest of the world, and even pave the way for a type of “tourist tax” that would spread the benefits of the sharing economy more evenly across the population.

The company says regulations proposed this week in New South Wales that will affect tens of thousands of properties listed on its platform in the Sydney area could be used in other markets, especially when it comes to the use of Airbnb-listed apartments as “party houses” that disrupt other tenants — a problem Airbnb is struggling with in cities worldwide.

Chris Lehane, Airbnb’s head of global policy, told Business Insider: “We have 500-plus partnerships that we have put in place with governments… and I look at this one as a potential model, or new paradigm, not just for Australia, but for potentially markets in Asia, and potentially markets beyond.”

The rules limit the amount of short-term stays in properties in the Greater Sydney area to 180 days a year, and allow governing bodies of apartment buildings — known in Australia as strata corporations — to ban short-term letting by a vote of 75% or more of the property owners in the development.

Hosts who breach a new code of conduct twice will be banned from letting their properties on platforms like Airbnb for five years.

Lehane, previously a special advisor to Bill Clinton and press secretary to Al Gore, said the new regulations were a “balancing of interests”.

“At a thematic level, and maybe as a function of taking this much time, they’ve [been able] to look at the data, consider who’s using these platforms in NSW, and ultimately design an approach that reflected both how people are actually using it, but also how they want to balance the different stakeholders here.

“I think this is a policy that looks to the future,” Lehane said.

“One thing I am particularly excited about… is the peace dealing with the ‘party house,’ or what I would call the bad actor. 0.005% of folks don’t conduct themselves appropriately on the platform,” he said.

That number is based on insurance claims made of $1,000 or more.

“The vast majority of people use the platform the right way,” he said.

“Our brand is impacted, our community is impacted, when someone doesn’t conduct themselves the right way. Even one thing impacts everyone’s reputation, and all these other hosts who do a great job.”

Head of Global Policy at Airbnb, Chris Lehane. Supplied

He said the reforms answered a problem the company has been facing in terms of addressing those “bad actors”.

“One of our challenges has always been that we need to work with these local places to be able to identify when that actually happens, and then be able to do something,” he said.

“That almost by definition requires the platform and the relevant government to work together on that.

“We don’t have the legal authority to know when someone may have violated the nuisance laws.

“We have the ability, once the government has identified that, to remove the people from the platform, so [the reforms] are something that we are really encouraged by.”

In Sydney, the typical host makes about $3,700 a year. While in NSW overall, that increases to about $5,400 a year.

“[The reforms] reflect a policy where the government was looking to optimise for those folks who are using there homes for extra money, making sure neighbourhoods are being protected, which we strongly support, and on the strata issue… if it’s for a commercial use then for other people get to say, that’s a fair and good balance.”

While South Australia and Tasmania have implemented their own rules over the last couple of years, the NSW rules are seen as the toughest in the country.

But Lehane thinks it simply reflects the NSW market.

“I tend not to use… tough versus not tough because I think everything ultimately is bespoke to the particular needs of a particular place,” he said.

“But.. is this going to allow our business to grow? Absolutely”.

Tourist tax

He even thinks the reforms could lead to a wider “tourist tax, a potential revenue source”.

“My guess is that as they implement this, there will be things that they sort of learn and find, and discover,” he said.

“Most places that a have significant tourist economy look to create a hotel or tourist tax.

“Guests coming in start using infrastructure, natural resources, they’re having an impact. A tourist tax is a way to democratise the benefits to a broader group of folk.

“I know it’s weird for a private sector to be suggesting that but we do believe that’s one of the big issue in travel and tourism — whether you’re going to have healthy travel or mass travel.

“So I think there will be things like that which the government will continue to look at, and consider.”

While the reforms might be seen as “a short-term hit” to the business, Lehane said ultimately it “put us in a position where we find ourselves in a positive relationship with the various entities that are important to us”.