US

The NSW government was rolled by its own backbench just as it was about to announce a crackdown on Airbnb

Airbnb/ supplied.

The NSW government was forced to pull its plans to regulate Airbnb yesterday after Premier Gladys Berejiklian and the Cabinet failed to gain backbench support for the overdue reforms.

The official announcement was canned yesterday just an hour before Better Regulation Minister Matt Kean was due to announce the new rules, in what was believed to be a dispute over whether there should be a cap on the number of days a property can be rented out annually.

An Options Paper on short–term holiday letting in NSW was originally released in July last year for public feedback.

Fairfax Media reports that the new rules were approved by Cabinet last week following a fortnight of battles over the policy, but with an election due next March, some backbenchers are believed to be advocating to delay an announcement for another 10 months until after the election. At least six backbenchers are believed to be against the reforms, Fairfax says.

Airbnb has been a hot political topic in Sydney, where many believe rental prices are being forced up due to competition with the US-based online letting business, which councils have been pushing for increased powers to deal with the use of properties for holiday letting.

Academics who looked at the issue in Sydney recently concluded that suburbs such as Waverley, Manly and Pittwater felt the biggest impact, saying that:

The patterns we observed suggest that the pressure Airbnb puts on the rental market – at least at this point of time – is limited to a small number of high-end areas, mainly locations that are attractive to tourists. This represents a concern in terms of rental supply in these areas, where some local residents in the long-term rental market might be losing out to the short-term tourism market.

The sticking point is believed to be a proposal to cap short-term letting at a property in the state’s three biggest cities, Sydney, Wollongong and Newcastle, to 180 days annually. Regional areas would not have caps, but local councils would be given the powers to introduce them if they wanted.

Popular tourist towns such as Byron Bay also have been grappling with the issues created by the growing prevalence of Airbnb-style letting on the local residents.

Byron Shire mayor Simon Richardson recently declared that Airbnb was “gutting our community”.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.