NSW Better Regulation Minister Matt Kean is gearing up to present the state government’s response to the hot button issue of short-term holiday letting on online platforms like Airbnb and Stayz.

Mr Kean’s announcement, with some details expected by 5pm today (Wednesday), will form the government’s response to a NSW Legislative Assembly Committee on Environment and Planning report into short-term holiday letting,  released in October 2016.

The report recommended the NSW government adopt a light regulatory touch to short-term rentals and said restrictions should be eased so that home owners could rent out a room – or their entire house – without being fined by local councils for failing to lodge a development application for change of use.

The report, which examined how the sector should be legally regulated, split home owners and renters, cheered retailers and restaurateurs and horrified hoteliers, owner corporations and strata residents.

Local councils will also be closely scrutinising the NSW government’s position and hoping for clarity and guidance on how they should regulate the sharing economy through the planning policies they apply in their own backyards.

This came up in last year’s committee report, which recommended a concrete definition of short-term rental accommodation (STRA) to help local government, for example specifying the number of bedrooms that could be occupied or the number of days a property was rented in one year.

The committee also recommended giving NSW councils more detail around planning regulations and how to apply these to STRA.

Another suggestion was that the State Environmental Planning Policy (SEPP) on exempt and complying development be amended to permit STRA and make the process quicker and easier.

Local councils has responded quite differently to Airbnb depending on their location.

Some NSW coastal councils, such as Gosford, Pittwater, Shoalhaven and Kiama have welcomed Airbnb but others like Byron Shire Council have battled with an onslaught of partygoers, while rising house prices lock locals out of the market.

Meanwhile, many metropolitan Sydney councils, such as City of Sydney and Randwick have demanded planning permission for short-term accommodation as complaints from residents grow. 

Although the inquiry recommended greenlighting Airbnb and sweeping away penalties, Tourism Accommodation Australia (TAA), the peak body for the hotel industry, is tentatively predicting that the Minister will be more circumspect.

A TAA spokesman said that while the NSW government was unlikely to follow the lead of cities like New York, Berlin or San Francisco and ban Airbnb lets that were not owner-occupied, it was hopeful that some safeguards would be in place to protect residents from city apartment blocks being turned into ‘quasi hotels’.

“It has been hard to ignore the millions of dollars that Airbnb has poured into ads and MP’s ‘advocacy’ over the past few months but we are confident the NSW government will be able to differentiate between genuine ‘sharing’ and the commercial exploitation of the new online platforms,” he said.

There is a possibility that the government will establish a committee  to examine the more contentious aspects of short-term rentals. 

TAA CEO Carol Giuseppi said in her response to the original inquiry that TAA did not oppose genuine sharing, where the owner was present during the stay, but that figures from Inside Airbnb had shown this was not the majority of cases.

Inside Airbnb reported that 61 per cent of Sydney listings were for whole houses or apartments and that 39 per cent of these were available for 365 days a year, a sign they were effectively functioning as commercial businesses. Almost one-third were listings for multiple properties.

“Our biggest concern is that city apartments will be turned into quasi-hotels, which has already taken place though in a number of cases residents have gone to court to force commercial operators out,” said the spokesman.

“The concern is the NSW government could make it harder for residents to keep Airbnb out, thereby wrecking their community and going against all the rules that were originally in place to keep the apartments for residents only.”

Instead, the TAA wants to outlaw those short-term lets that are obviously commercial and for councils to be given stringent powers to enforce the rules. It is also hoping that the state government will limit the number of days accommodation can be let out in a year.

The TAA believes that operators like Airbnb should be accountable for properties being compliant, in order to protect the safety of renters and other residents from nuisance.