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The community impact of Airbnb calls for closer scrutiny

19 January 2017
New research looks at Airbnb's impact across 5 Sydney council areas

There needs to be closer scrutiny of the impact of online short-term home rentals following concerns over platforms such as Airbnb, new University of Sydney research finds.

Airbnb online

 

The research published this month in the Journal of the American Planning Association (Issue 1, 2017), centred on Sydney - the country’s biggest city where Airbnb has grown rapidly since 2011, doubling year-on-year to around 15,648 Sydney properties listed in January 2016.

Given the high demand for permanent rentals and the hot housing market, researchers from the University’s Urban Housing Lab sought to understand what impact Airbnb might be having on the Australian housing market and affordability.

The research analysed five municipalities across Sydney that attract tourists and see a concentration of Airbnb listings in locations around Sydney’s harbour, beaches, attractions and commercial hubs. These were the City of Sydney, Waverley covering Bondi, Bronte and Tamarama beachside suburbs, Marrickville, Leichhardt and Parramatta council areas.

Leading the research was Professor Nicole Gurran of Urban and Regional Planning and Policy in the University’s School of Architecture, Design and Planning: “There is little research to show what impact Airbnb has had on Australian communities over the last five years.

“While it is recognised that not all forms of online homesharing have had a serious impact since 2011, it is clear that providers like Airbnb are not helping the affordability problem facing many Australians on low incomes.

Our research has provided an early indication of the impact and the findings do call for further analysis of the implications of online home-sharing for local communities and the housing market.
Professor Nicole Gurran

The impact of Airbnb on Sydney residents and neighbourhoods, rental and property markets, and the income opportunity for landlords was examined, drawing on written evidence from the local councils and planners, Inside Airbnb data and the 2011 ABS census.

The research showed that nearly one third of Airbnb listings in greater Sydney are held by owners of multiple properties, with frequently listed rentals offering a lucrative income of $600 more per month than permanent rental incomes. Currently it appears only a small portion of the population benefits from Airbnb income.

Airbnb is likely to help some residents who are sharing their homes with tourists by renting beds or rooms, earning a rental income equivalent to 10-19 per cent of median rents and mortgages. With time, however, the risk is that the mortgage relief or subsidy of housing costs gained by property owners will drive up property values, making these suburbs unaffordable for the next generation of wishful home owners.

The number of Airbnb properties potentially removed from Sydney’s permanent rental market with an average vacancy rate of around three per cent amounts to approximately half of the available rental properties. At the time of the research, it was found that in the city of Sydney a total of 1,268 properties were available on Airbnb, which is equivalent to 144 per cent of the city’s vacant rentals.

In Waverley there are also concerns about the loss of whole property rentals to short-term holiday makers, with Airbnb properties making up more than three times the suburb’s vacancy rate. In Leichhardt and Marrickville the figures were lower but still significant, with Airbnb representing 69 per cent and 44 per cent of available rentals, respectively. In contrast Airbnb listings in Parramatta are much lower, probably due to its distance from Sydney’s tourist attractions, but Airbnb listings are continuing to extend beyond the traditional tourist hot spots. It is expected this is only likely to put more pressure on rental prices overall in Sydney.

The impact of noise, congestion, parking and garbage on communities is not a new concern in residential areas where tourists have long resided, like Waverley and its surrounding beach suburbs. However, in higher-density locations such as the Leichhardt municipality, there is growing resentment towards increasing tourist numbers, with weekly resident complaints about tourist behaviour.

“Our research indicates that tighter zoning and residential development controls are needed to distinguish between the different forms of short-stay accommodation so that the impact on local communities and residents is kept in check. However, current land use planning controls cannot regulate these new forms of visitor accommodation by Airbnb and others,” added Professor Peter Phibbs, Head of Urban and Regional Planning and Policy, University of Sydney, and research collaborator.

The University of Sydney research follows a decision in late 2015 by the NSW Parliament to launch an inquiry into the adequacy of regulations on short-term rental sector, partly in response to concerns about the spread of online visitor accommodation. The government’s response to the inquiry remains pending.