Many local governments throughout Queensland have been confronted by the challenges associated with the short-stay accommodation trend such as Airbnb, which has for many years seemed to skirt around the edges of local government planning schemes and local law regulations.
However, a recent decision of the Planning and Environment Court helps shed some light on the regulatory minefield that short-stay accommodation creates. With the introduction of a new prescribed activity requiring Council approval for ‘Short Stay Letting and Home Hosted Accommodation’, which commenced on 1 February 2022, Noosa Council’s first legal challenge in administering the approval process for this new prescribed activity was considered by the Planning and Environment Court in Maroochydore in the decision of Escanaba Pty Ltd v Noosa Shire Council  QPEC 14.
The P&E Court was being asked to consider an appeal against a decision by Council to refuse a local laws application for short stay letting at the appellant’s duplex under its Local Law No. 1 (Administration) 2015 and Subordinate Local Law No. 1 (Administration) 2015 (“the Local Laws”).
The premises had a 2015 development approval for a material change of use for a ‘Multiple Housing Type 2 – Duplex’ pursuant to Noosa Council’s Planning Scheme (“2015 Development Approval”), but Escanaba Pty Ltd wanted to be able to use the premises for short stay accommodation on a commercial basis which required a separate approval from Council pursuant to its Local Laws. The Local Laws defined the activity for the ‘operation of short stay letting’ to be the letting of premises by the owner to someone else, on a commercial basis, for a period of less than three months.
One of the requirements for approval under the Local Laws was that the proposed use for short-stay letting must comply with the development approval for the premises. After consideration, Council refused the application on the basis that the 2015 Development Approval did not allow for visitor or short-term accommodation use at the premises.
The Court considered the question of whether the 2015 Development Approval permitted the operation of short-stay letting. In working through the definitions contained within Council’s Noosa Plan 2006, it was determined that a ‘multiple housing’ type use was considered to be a permanent or semi-permanent residential use, in contrast to other short-term accommodation which was consistent with visitor accommodation use classes. Giving support to this conclusion was the fact that the level of assessment for both uses was different, with multiple dwellings being code assessable and visitor accommodation being impact assessable.
After considering the provisions of the Noosa Plan 2006 according to the ordinary principles of statutory construction, the Court dismissed the appeal on the basis that the 2015 Development Approval did not authorise the operation of a short stay letting as defined in the Council’s Local Laws.
The issues presented by short-stay letting of premises are usually difficult for Councils to regulate as more often than not the use or activity sits in a regulatory gap between a local government’s planning scheme and local laws.
Councils often receive complaints about noise, parties, parking and waste, as well as other amenity issues, created by short-stay holiday makers within those predominantly residential areas that are not typically designed for this type of activity. Without any basis to regulate, other than referring noise-related matters to the Police, local governments are often powerless to respond adequately to those complaints.
What can be done?
Under section 28 of the Local Government Act 2009 (“LGA”), local governments are given the power to make and enforce local laws, including the power to make subordinate local laws, that are “necessary or convenient for the good rule and local government of its local government area”.
For those local governments wanting to tackle the issues created by short-stay letting accommodation within their local government areas, introducing a new local law or amendments to existing local laws is an option available.
As with any Local Laws regulation, Councils have to be mindful of not creating ‘alternative development processes’ in seeking to regulate this type of activity, as this is prohibited under the LGA. However, this is a consideration during the drafting stages and in consideration of the local government’s Planning Scheme and how it regulates accommodation type uses.
Once the Local Laws have been adopted to regulate the use, the ongoing challenges for Councils will be:
- allocating the appropriate level of resources it has available to facilitate an approvals process (if seeking to regulate it in this way);
- acknowledging a likelihood of increased requests for internal reviews for any application refusals; and
- being prepared for legal challenges to its decisions, similar to the Escanaba appeal.
It can also be quite a costly exercise for Councils if seeking to regulate short-term accommodation uses in this way and therefore it’s important for Councils to weigh up the benefit of such regulation in consideration of the issues being experienced by the community against the cost and resourcing implications likely to be encountered.
Councils have the ability to regulate the gap between its current Planning Scheme and Local Laws that has been identified through Airbnb and other short-term accommodation arrangements, by introducing amendments to its Local Laws. However, Councils have to be prepared, that even if successful when challenged in Court, like what occurred in Escanaba, there are still financial implications for doing so.
Our team at Preston Law regularly assist our local government clients in advising on appropriate regulatory strategies when it comes to consideration of amending or repealing and replacing their local laws. If you have any queries, or would like to know how we may be able to assist, please contact our team in Cairns today.