The Queenstown Lakes District Council (Council) as part of its Proposed District Plan (PDP) has recently proposed new rules to restrict the ability for owners of residential properties to rent them out on a short term basis.
The use of properties for short term rental accommodation has grown significantly in recent years due to online platforms such as AirBnB and Bookabach, particularly in the Queenstown Lakes district. Some owners can fetch the same amount or more from a one night let on these platforms than from a week’s worth of rent to long term tenants.
While this has been profitable for owners, as well as increasing the number of accommodation options for tourists, it has placed even more pressure on the district’s longstanding concerns relating to the lack of available long term rental opportunities.
To address this the Council has proposed a number of changes to the rules around visitor accommodation through its PDP.
The Existing Rules under the Operative District Plan
Under the Operative District Plan (ODP), owners are able to rent their property short term (short term meaning lets of 3 months or less) for up to 90 days per year, with a minimum number of 3 nights per stay. To do this owners need to register as a holiday home with the Council. A consequence of registering as a holiday home is the owners will likely pay increased rates for the property.
If properties are let for more than 90 days a year without a resource consent they are in breach of the ODP and require a consent from the Council.
The Council when assessing applications for resource consent will consider any adverse effects on the environment that are anticipated from the visitor accommodation activity. Typically this means any adverse effects on neighbours (for example, increased noise), or on the general amenity of the surrounding area. They will also normally require a minimum of two onsite car parks per residential unit, fire evacuation plans and noise management plans.
For this reason it is easier under the ODP to obtain consent for visitor accommodation for properties in the town centres, or in special areas identified as being used for visitor accommodation, than in pure residential areas. It has still been possible however for many residential properties to obtain consents under the ODP – under the PDP this is far less likely.
Changes Proposed by the PDP
The PDP rules will impact unfavourably on owners trying to use their properties for visitor accommodation in a number of ways.
For instance, the holiday home exception will not apply under the PDP – properties will no longer be able to be used for visitor accommodation for 90 days or less without a resource consent. The new permitted standard for residential properties is proposed to be 28 days per 12 months period and for a total maximum number of 3 lets during that 12 month period. If this is exceeded, a resource consent is required.
As well as reducing the ability for owners to operate short term visitor accommodation without a consent, the PDP will make it more difficult for them to obtain consents. One way it proposes to do this is by increasing the number of matters which the Council needs to consider when assessing consent applications. For example a new objective in the PDP the Council must have regard to is the maintaining of the supply of long term housing. If an owner seeks their property be used for short term accommodation, they will likely need to satisfy the Council that it is not contrary to this objective. For a property in a low density residential area, where long term residential use is expected, this will not be easy to do.
Council Decisions on the PDP and Existing Use Rights
It is important to note these rules are still proposed, and subject to change. As part of the PDP process the Council must hear and have regard to submissions made by members of the public. Unsurprisingly there have been many in opposition to the new provisions. Submissions have also been made by organisations such as Airbnb who are strongly resisting the new rules. Even after the Council’s final decisions have been made, those who have made submissions have a right to appeal the decisions to the Environment Court.
Another point to note is that the new rules will not affect property owners who have existing resource consents for visitor accommodation, as these owners can rely on their existing use rights.
Further, no consents are required for those properties occupied by an owner or tenant and who provide accommodation for up to 5 guests, as such are deemed to be a Bed and Breakfast operation. They still however need to register with the Council for rating purposes.
The changes proposed by the Council can have a significant effect on property owners. We strongly recommend you understand the consequences of these changes and if necessary protect yourself and your property.
Please do not hesitate to contact the expert Resource Management and Local Government team at TODD & WALKER Law in order to gain greater understanding of these proposed rules and the options you have for meeting your obligations under them.