State government to pay landlords $10,000 to drop short-stay rentals

The conversion of short-stay rentals to permanent rental leases has been seen by one state government as an answer to the rental crisis worthy of $10,000 landlord incentives.

The West Australian Government on Thursday (9 November) announced a raft of new regulations for short-term rental accommodation (STRA) in the state, including a new $10,000 incentive for property owners to transition existing short-term rental accommodation into long-term rental homes.

Premier Roger Cook said the reforms are aimed at returning some properties to the long-term rental market to help increase housing supply in the face of a rental crisis.

Perth’s rental vacancy rates of 0.7 per cent is the lowest in the country, along with Adelaide and regional South Australia.

To qualify for the scheme property owners must have had an entire property for rent on short-stay booking platforms within the past six weeks and then provide a minimum 12-month lease to new long-term tenants. There will be limits placed on the maximum rent that can be charged to protect tenants and ensure housing is affordable.

The payment will be made in two parts, with $4,000 paid once eligible applications are approved and $6,000 after the long-term agreement reaches 12 months.

Property owners will be required to register all STRA properties in WA before being able to advertise and take bookings, including on online booking platforms.

The reforms will also mandate registration of all STRA properties and introduce planning requirements for STRA properties in the Perth metropolitan area, including the need for planning approval for un-hosted STRA properties.

“Short-term rental accommodation remains an important part of Western Australia’s tourism offering, however, it is impossible to ignore the impact this increasingly popular type of accommodation has had on some local neighbourhoods and communities,” Mr Cook said.

“We are doing everything we can to get more housing and rental properties onto the market quickly to help meet current demand, and I encourage owners of short-term rental accommodation to consider the new incentive and other benefits of transitioning their property to the long-term market.”

The new measure received a mixed response from one major short-term rental platform.

Eacham Curry, Senior Director, Government and Corporate Affairs, Stayz, acknowledged the WA government’s move as “a positive first step on regulation of short-term rental accommodation (STRA) with its proposal for a statewide register of properties,” but added that it had missed an opportunity for comprehensive reform.

“Stayz does not endorse caps, or in this case thresholds, because they are not a tool fit for purpose in addressing concerns about the impact of STRA on amenity, housing affordability, housing availability or the impact on the provision of government services.

“Nonetheless, where the government has decided on a threshold, we urge uniformity across the state in order to reduce complexity.

“A threshold will not introduce new homes onto the market but will instead limit accommodation options for tourists and incomes for mum-and-dad investors.” 

Mr Curry said some regional WA councils have already indicated they are considering onerous new restrictions that, if employed, will likely bring severe economic impacts to the local short term rental market, and by extension the wider community.

“Traditional accommodation providers, in these areas, do not have the capacity, or the offerings, to meet the needs of travellers who embrace short-term accommodation for their holidays and the likeliest outcome is that these local communities and economies will suffer the loss.”

WA Housing Minister, John Carey, said planning approval will only be required for un-hosted STRA in the metropolitan area, if it is intended to be let for more than 90 nights (inclusive) in a 12-month period.

“I want to be clear - this is not a cap - rather an exemption from the requirement to obtain development approval if a STRA property is rented for less than 90 nights over 12 months.”

Cath Hart, CEO, REIWA, said there is no one solution to the rental crisis but every action taken helps.

“The short-stay market is not the silver bullet for the rental issues we are facing.

“Entire short-stay dwellings that may be suitable for long-term rentals only make up a small percentage of total dwellings and the ratio to private rental dwellings was generally low,” she said.

“In addition, not every owner is in a position to transfer their property and not every short-stay property is appropriate for the long-term rental market, however, for some short-stay owners, this incentive may encourage them to make the switch.

“We need every long-term rental we can get at the moment and if it does boost rental supply, even marginally, then that’s a positive.

“We commend the Government for encouraging property owners to return to the long-term market rather than employing punitive measures like taxes.”