Wednesday , August 22 2018

The holiday let horror stories of our capital cities – and how to fight back

A new shimmering 63-storey, $300 million skyscraper that was meant to provide private residential accommodation to Melbourne’s booming inner city population has instead become a quasi-hotel with dozens of rooms listed by owners and investors on Airbnb, Booking.com, Expedia and others.

Long-term residents in the 633-apartment EQ Tower – three-quarters of them young Asian students – now have to deal with loud parties next door, theft of their belongings and concerns about their personal safety and security as anonymous short-stay guests enter the building at all hours of the day and night.

EQ Tower is just one of many examples were Melbourne residential towers have been swamped by Airbnb, inflaming a debate that has brought in politicians.

A 2016 Victorian Owners Corporation Amendment Bill that will award compensation to residents and fine short-stay occupants who breach conduct rules is awaiting the resumption of debate in Victoria’s Upper House, the Legislative Council, but it won’t block listings of whole apartments on Airbnb.

Figures from Airbnb research house AirDNA show more than 2200 whole apartments were for rent in the Melbourne CBD in April, up a whopping 70 per cent in just one year, with more than 600 whole apartment listings in Southbank and 500 in Docklands.

Up until recently – when they were removed by bolt cutters by the building manager – guests at the EQ Tower gained access to the building via an informal system of padlocks attached to the side of the building that contained keys and swipe cards. Now a safe has been installed across the road outside beauty studio Lash Labs, where guests enter a code to get their keys.

There is no concierge in EQ Tower and none of the Airbnb guests have to register their names or show any identity before entering the building.

Residents who spoke to The Australian Financial Review complained of “drunken people running down the corridors at night”, of theft of their belongings and even identity theft given access to all the letter boxes at the back of the building.

“The police have been called in more than 10 times recently,” said one resident. Another, an apartment owner from Malaysia, said her partner’s $10,000 bicycle had been stolen from the bicycle storage space while they were overseas. “It took three attempts, but they eventually broke the lock with a blowtorch. I suspect it is Airbnb people,” she said.

Higher returns

A block away from EQ Tower, 37 Airbnb padlocks are still attached to a railing opposite Eporo Tower, a 44-storey apartment block on La Trobe Street that was finished last year.

Investors in the tower were given the green light to list their apartments on Airbnb – where the returns can be significantly higher – following a landmark 2016 Victorian Supreme Court ruling that prevented the Owners Corporation of a Docklands apartment complex from locking out short-stay operators.

Matt Khoo, deputy managing director of ICD Property, the developer of EQ Tower, said it was in a similar situation to all developers in that they had no control over how apartments were used once they were sold and settled.

“This is not a new issue and since the rise of Airbnb there has been a lot of discussion, particularly as there is not a national approach to this but a state-by-state one,” he said.

While he said the building managers and owners’ committee were limited in what they were able to do because it involved private property, they had “been actively responding to short-stay issues including removing key boxes from street furniture and trees that had appeared outside, reporting antisocial behaviour to police and employing additional static and roaming security over anticipated peak periods such as long weekends”.

But some developers are taking action. Mohan Du, who runs developer Capital Alliance, said he was introducing new enforceable safeguards into sales contracts that would prevent owners putting their apartments on Airbnb and other short-stay platforms.

Contractual promise

These include a retrictive covenant on the title and a personal contractual promise from each purchaser that it will not use its apartment for short-stay.

Mr Du said these clauses would be included in contracts for its new development The Docklands and all future projects. “The majority of developers don’t live in these apartments and don’t care once they are sold. We think its very misleading not to tell people their neighbour may be an Airbnb apartment,” he said.

Tom Bacon, CEO and partner at Strata Title Lawyers, said such a restrictive covenant on title would be enforceable.

“Mirvac did this with the Yarra’s Edge development [at Docklands] to ensure that it could not be used for short-stay apartments, and it has been very successful down there. It is very rare that developers registers these types of covenants, but they absolutely do work,” he said.

Airbnb’s head of public policy ANZ Brent Thomas said: “Airbnb strongly supports the right of Victorians to share their own homes responsibly and respectfully.

“Hosting is a big responsibility and we expect our hosts to meet our community’s high standards. We are also constantly striving to make our platform better and safer, as well as help our hosts be good neighbours in the places they call home.”

About Kate Jackson

Kate Jackson
Kate Jackson is the editor of Accomnews and Accom Management Guide. You can reach her at any time with questions or submissions: editorial@accomnews.co.nz

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