Kiama may have one of the highest levels of short-term rentals in the state but the council believed moves to make owners rent them out could backfire.
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However, it also complained about some short-term rental owners taking advantage of a grey area when building their properties.
The Department of Planning, Housing and Infrastructure has released a discussion paper on short-term rental accommodation (STRA) and what effects they are having on housing affordability.
The paper listed the Kiama Local Government Area as being the third-highest in terms of density with 612 of the 10,317 homes - 6 per cent - being non-hosted STRAs.
Kiama Municipal Council lodged a submission to the department acknowledging the tourism value of STRAs, especially an area with relatively few hotels.
The council has placed the number of its non-hosted STRAs at a slightly lower 526, but when hosted properties are added the figure was 743.
It stated users of the non-hosted rentals spent $669 per trip, in addition to the cost of their accommodation and the overall STRA industry was worth $30 million to the Kiama economy.
In the submission, the council stated that a one size fits all cap on the number of STRAs or on the days they can operate may not result in any increase in longer term rentals.
"In Kiama, it is possible that if the STRA rules are overly stringent, properties will be left vacant rather than rented and tenanted," the submission stated.
"This is stated because currently there is no clear evidence that by changing regulations properties would be returned to the rental market."
The paper identified a major concern of councils that STRAs - which were effectively commercial tourism accommodation - were being built in areas where that type of development would otherwise not be allowed.
"It is particularly concerning in certain localities within our LGA when developments are assessed through a DA process as residential accommodation, only to once built be marketed and promoted as solely tourist accommodation," the submission stated.
It added that these developments "do not align" with the current STRA legislation.
"Unfortunately given the current compliance regime and regulatory framework there is little council can do to respond to these concerns," the submission stated.
In terms of the housing crisis, the council submission felt it was incorrect to place all of the blame on STRAs.
"In part a lack of sufficient formal tourist and visitor accommodation to meet demand, coupled with a shortage of affordable rental housing in perpetuity have exacerbated the negative impacts of non-hosted STRA in certain areas," the submission stated.
Glen Humphries
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
