Scotland cracks down on short-term rentals in world-first law

This month, the Scottish government took drastic action against short-term rental sites like Airbnb to help alleviate pressure on the rental market and it’s not too dissimilar to Australia’s approach.

Scotland has introduced some of the harshest policies against short-term rentals in the world with one of the new laws in place requiring all holiday letting hosts to have a licence to operate.

From 1 April, these licences will only be given to owners who have properties that adhere to strict criteria laid out by local council.

View of Edinburgh from Arthur's Seat

The Scottish government has put some of the toughest laws in place on the short-term rental market. Picture: istock

In tonight’s episode of SBS TV show Dateline, presenter Evan Williams travels to Scotland to find out how the new laws are being received and said the sentiments of locals are mixed.

“In Edinburgh, there are some looking for rental accommodation that welcome any moves to free up more stock, to both have more available and to keep rising rents down,” Mr Williams said.

“Some locals who run one or more Airbnb flats in the centre obviously oppose the extra costs and restrictions because it affects their profits, on the Western Isles the issue is more about the need for more local housing and second home buyers locking up available housing.”

Could similar measures ease the rental crisis in Australia?

In Australia, several cities have already targeted the short-term leasing market in a bid to help with the worsening rental crisis, however instead of a licensing agreement, capping the number of days landlords can lease out their properties and enforcing higher council rates are the popular strategies.

A 180-day cap is in place in Greater Sydney and Newcastle, in Brisbane landlords who rent out their entire property for more than 60 days per year will pay 50% more in council rates, while in Hobart a new law was passed last year to put a halt on new permits for homes being purpose built for short-term stays.

An aerial view of Wategoes Beach in Byron Bay

The Byron Shire Council tried to put a 90-day cap on short-term rentals last year. Picture: Getty

The Byron Shire Council declared a housing emergency in March 2021 and announced a 90-day cap on short-term rentals, but that measure was overturned by the state government in December last year.

Is the short-term rental market the real problem?

Mr Williams said that while cracking down on Airbnbs is one way to help with the crisis, the service is also a necessity for many.

“Careful application of more restrictions or at least licensing so councils know who is doing what with which properties is a useful tool but it’s one aspect of quite a complex problem that has many local factors at play,” he said.

“It can have a negative impact on individuals using Airbnb to provide a popular service and make some extra cash, but it can also help feee up rental housing where short-term rents impact more dramatically on popular destinations, especially seasonally. So it really depends on the location, the local demands and needs,” he said.

Urban geographer Thomas Sigler from The University of Queensland found short-term rental accommodation in Australia accounts for a very small proportion of properties.

“Nationwide, we’re talking about less than 3% of the housing stock,” Mr Sigler said.

The short-term rental market isn’t the only cause of the current rental crisis. Picture: Facebook.

“If you then subtract those that are [built] to be short-stay apartments, such as beachside units, we’re talking about 1% of the nation’s housing stock.”

The National Housing Finance and Investment Corporation said in its State of the Nation’s Housing research released on Monday that strong population growth post-pandemic and ongoing rate hikes were the main contributors to the housing shortage along with obstacles in obtaining approvals for housing developments.

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