District Plan review: good news for holiday home owners

In the ever-shifting sands of council rules, the recent review of the Operative District Plan indicates a possible change to Residential Visitor Accommodation (RVA) to allow homeowners to rent their houses out for longer periods.

In a region with scare and unaffordable long-term accommodation, Queenstown Lakes District Council was attempting to force owners out of short-term letting by only allowing 28 days of holiday rental activity before making owners apply for resource consent to become a visitor accommodation provider with a significant hike in rates and compliance costs. Their logic was that owners would opt for long-term rental activity instead and thereby provide housing for residents.

However, the legal submissions from Bookabach and Bachcare stated that “there is no evidence that a restrictive regime for Residential Visitor Accommodation (RVA) will result in those houses being available for long-term rental, as many of the houses listed through those platforms are holiday homes where the owners want flexible access for themselves, family and friends.” They submitted that, if properties are not available for short-term accommodation, they will be left empty for longer periods, not making a significant contribution to residential cohesion.

Independent commissioners stated in their report and recommendations on visitor accommodation that, “We heard from numerous submitters that the opportunity to be an accommodation provider or homestay host was significant economic and social benefit to them, in a District where the cost of living and property values are high and many jobs are low-wage positions. We accept that these economic and social benefits are important for a substantial number of hosts and that their loss, as a result of increased restrictions on RVA and/or homestay opportunities, would be significant for many District residents. The great majority of hosts who spoke to us stressed that they would not rent their properties long term, if they did not undertake short-term visitor hosting.”

Notably, “the Panel did not agree there is sufficient evidence that short-term letting activities are having an adverse effect on housing affordability or the supply of residential accommodation capacity... Accordingly, the recommendations are to remove policies on maintaining housing supply and changes to a large number of the rules and standards from what was proposed in council’s evidence.”

What does this mean for the average homeowner who rents out their house for a few months a year? In low-density residential zones the Panel is recommending that: “the proposed 28 night permitted standard for Residential Visitor Accommodation in residential zones be changed to a 90 nights per year controlled activity, a 90-180 nights per year restricted discretionary activity, and a non-complying activity for letting of over 180 nights per year.”

A Resource Consent will still be required for homeowners up to 90 nights but as it is a controlled activity, Councillor Calum MacLeod said they are cheap and “pretty easy to get”.

MacLeod was a member of the Panel in this review and believes the recommendations that his Panel are putting forth will be good news for Wanaka homeowners.

“The biggest issue in this district is affordability. We are the least-affordable district in New Zealand. And evidence was that having ability to do BnB actually helps,” he said. “For example, a family in Timsfield where he went to work and she let out a room on AirBnB. By doing that it enabled her to stay at home to be a mum.”

MacLeod said it’s part of council’s job to ensure people can live in their district, and letting a room year-round, or the whole house for a few weeks or months, makes a huge financial difference for many people in Wanaka.

In regards to rates, MacLeod said, “Under the current regime there will be no extra rates for RVAs offering less than 90 days. If you have a four-bed house, you basically have the same impact as having tourists so the rates will be the same.”

“I got here in 1989 and 40 percent of housing was vacant. It was holiday homes. I don’t think that’s changed a lot. If you look at the initial attempt by council to control housing affordability through the District Plan, I am not sure that was the right tool to affect housing affordability,” he said.

“But the way things are changing with AirBnB, the 40 percent stock is still there… most people won’t rent it long term because they want to use it themselves so that stock wouldn’t affect the rental stock.”

“We need to address affordability in the district and retaining rental stock. The District Plan is like mowing the lawn with a combine harvester. It’s a blunt instrument that takes a decade to evolve.”

At the present time these changes are merely recommendations.

“These recommendations would need to be ratified by the council for them to be incorporated into the ‘Decisions Version’ of the Proposed District Plan,” said Amy Bowbyes, Senior Planner for QLDC.

However MacLeod is optimistic that the recommendations will be adopted.

The recommendations are currently scheduled to be considered by council on March 7.
 


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