Council has endorsed the option of a policy position to free up short-term rental accommodation for homes in the longer-term rental market.

Specifically, Council endorsed the implementation of a short-term rental accommodation local law by February 2024, following consultation with the community and key stakeholders, including short-term rental accommodation operators and the tourism sector.

The features of a new local law will be determined through community consultation. Options under consideration include:

• A registration fee for all short-term rental properties, payable annually.
• A cap on the number of days that a short-term property can be rented.

Like other capital cities around Australia, the City of Melbourne is in a housing crisis.  

The quickest way to create more housing is to utilise housing stock that we already have. A new local law is a first step to encourage short-term rental operators to shift their properties onto the long-term rental market.  

Considerations for a local law, including a registration fee and a cap on the number of nights a property can be rented, would particularly help to incentivise owners of properties that are permanently rented out as short-term rentals – particularly in high-rise neighbourhoods like Docklands and Southbank – to shift their properties onto the long-term rental market. 

The features of a new local law will be determined through community consultation. Options under consideration include:

• A registration fee for all short-term rental properties, payable annually.
• A cap on the number of days that a short-term property can be rented.

Any new local law would not come into effect until February next year. 

We will consult extensively with the community before making any final decision on whether to introduce a new local law.

The proposed changes are designed to ensure the city’s tourism sector continues to thrive.

A short-term rental accommodation local law would not apply to hotels.

There is significant capacity in our hotels, both in the inner city and in our neighbourhoods, to accommodate new tourists – including more than 10,000 new hotel rooms which have become available in the past two years.

We will consult extensively with the community and key stakeholders, including short-term rental accommodation operators and the tourism sector.

Governments around the world are effectively using regulation to manage the impacts of the short-term rental industry – including Sydney, Hobart, London, Denver, Vancouver, San Francisco, Amsterdam and Singapore. These cities range from lenient to strict, utilising a range of measures including registration fees, annual caps, codes of conduct, nightly fees and audits.

In Victoria, a range of other local governments have short-term rental accommodation policies, including Mornington, Warrnambool, Bass Coast and Frankston.

Registration fees help to track and regulate the industry to minimise negative impacts with a data-led approach. Mornington Shire, Warrnambool, Bass Coast and City of Frankston all have annual registration fees for property owners of short-term rentals. Costs range from $150 to $400.

Global benchmarking highlighted the day-per-year cap as a policy lever to encourage conversion from short-term rentals to long-term rentals. Cities explored in the research employed caps ranging from 30 to 180 days.

Council has met with Airbnb as part of an exploration phase in introducing a short-term rental accommodation policy. We will continue to work with third-party platforms, local government and other levels of government to determine best ways to enforce regulation.

Our primary objective is to better understand the short-term rental industry, and to help shift short-term rental properties onto the long-term rental market.  

Following community consultation, the City of Melbourne may in future propose introducing a Code of Conduct.