24 Jan Share Economy Regulation Plays Catch-Up
Earlier this year, after a long period of consultation and community debate, the NSW government announced welcome reforms to short-term letting. This came in response to the burgeoning growth in online home-sharing platforms across the world.
The new planning framework will clarify the regulation of short-term letting, designating the practice as exempt development. There are now a range of new rules that hosts must observe, most significantly the limit of 180 days for short-term leasing of a property in Greater Sydney when the host is not present.
The share economy demonstrates how consumers and technology are moving further ahead of regulation. The regulation of the share economy – whether it be homes, taxis or labour – has been notoriously challenging for governments to address. But despite the wide range of views on this topic, I feel confident of one thing: the share economy is not going away.
We need to find a way for the online disruptors to participate lawfully in our economy, as they add competition, dynamism and innovation. While regulation will be required in some instances, we can be certain the technology being developed by entrepreneurs will far exceed the imagination of our politicians.
Home sharing in particular has been a boon for some regional communities. The wealth generated has help put money in the pockets of local households. This is partly why the government has been eager to bring the share economy into the tent by developing a set of regulations that allow businesses to continue to innovate while also observing some ground rules.
The NSW government’s reforms are not a blank cheque for the home-share industry, as a range of limitations have been placed upon its activities. The reality of monitoring and enforcing the 180-day cap seems particularly challenging.
The reforms also enable buildings to ban short-term letting, which is likely to be contested by those who feel their property rights have been ignored. Overall the approach to compliance and enforcement remains to be seen.
Home sharing is a policy area that has caught governments all over the world flat-footed, with some jurisdictions clamping down hard, others adopting a laissez-faire policy, and even more jurisdictions having no clear policy at all.
Policy certainty is one of the most important factors underpinning successful economies. We need rules that are logical and consistent and that foster entrepreneurship as well as respect community concerns.
The new rules in NSW provide this certainty, enabling home sharing to continue to grow and innovate. However, the property industry is such an important employer and contributor to our nation’s wealth that the industry should remain vigilant in ensuring regulation does not stifle economic development and entrepreneurship. For this reason we are committed to working in collaboration with the government to ensure that regulation is fair and appropriate for the sector.
is managing partner for oceania
real estate and construction
at EY Australia.