The first shots have been fired in what might be a long war between Queenstown’s council and online house-sharing giant Airbnb.

In a pot-shot at peer-to-peer platforms, Queenstown’s council yesterday announced moves to restrict short-term lets, particularly for people renting whole houses or flats in lower density residential areas. The proposals will be voted on at an extraordinary meeting of councillors tomorrow and, if approved, will go to public consultation on November 23.

As reported on Monday, both Airbnb and Queenstown’s mayor are open about the fact they’ve been talking to each other about potential rule changes. But it seems Monday’s announcement blindsided Airbnb. The council had previously referred to “incentives” for home-owners to take in long-term renters – but rather than being swayed by financial carrots, users might be hit with a restrictive stick.

Airbnb’s Australasia head of policy Brent Thomas confirms to Newsroom it’ll fight the Queenstown council proposals.

“As it stands, our community will resist these innovative-denying policies which rob people of their property rights and would hurt the tourism economy,” he says in an emailed statement. “The council needs to ask itself – does it really want to win the prize for being the least innovative council?”

Airbnb shouldn’t expect Boult’s council to roll over after being chided by a few choice public statements. His council is proposing a bold move to introduce leasehold land to make housing more affordable and has arm-wrestled other agencies into adopting a $2 bus system in the Wakatipu Basin, while increasing parking charges, in a bid to get people out of their cars and soothe the city-like congestion. Airbnb might have to mobilise its thousands of users in the district to give its argument some heft, by asking them to flood the council with angry submissions about the proposed changes.

Given its embrace of local taxes around the world, Airbnb is likely sympathetic to Boult’s push for a district-wide visitor levy. But with a new Government in power, there’s no saying when that idea might be endorsed for Queenstown, if at all.

The council paid consultants Infometrics to produce a report on Airbnb’s rise in the district – although there could be questions over its numbers, considering many homes have multiple listings. Infometrics found 1700, or about half, of the district’s 3458 Airbnb listings were in low-density residential zones. Hosts earned $68.6 million in the 11 months to August, the report said, at an average of $19,886 per user – about two-and-a-half times the country’s average. The council admits it gets few complaints about Airbnb accommodation.

Queenstown council’s proposals are aimed at absentee owners or owners of sprawling, multi-bedroom houses. If you live in your house, you’ll be able to host up to five guests as a “homestay”, year-round. But rent your whole house or flat and you’re only allowed to do so for up to 28 days, in three separate lets. Above that threshold, operators can apply for costly resource consents, but the council warned on Monday they were “unlikely” to be approved in low-density areas. Existing rules allow short-term lets for up to 90 days.

The council’s policy analysis, contained in a report ahead of tomorrow’s meeting, says the proposals aim to restrict the use of whole houses for visitor accommodation, to prioritise residential use. Short-term house and room bookings should be restricted to “appropriate locations” such as the “town centre, mixed use and high intensity residential zones”, and away from “low intensity” suburbs.

The report says council aims include “potentially reducing the attractiveness of housing as a speculative investment choice” by reducing the “extraordinary returns” from visitor accommodation. Short lets should be limited to “an appropriate level”, it says. It’s hoped that will increase supply of houses and improve affordability, presumably by reducing rents and property prices. Without restricting visitor accommodation, the report says, there are worries about how much infrastructure would need to be provided – and paid for.

Skyrocketing house values in Queenstown – now over $1 million, on average, have occurred at the same time as a massive surge in tourist numbers. That’s meant rising rents for long-term residents and many renters being kicked out – sometimes out of a house they’ve lived in for years – while the landlord chases either a higher yield from short-term lets or a high sale price to realise capital returns.

Queenstown Airport’s annual passenger movements were a touch under 1.8 million last year – a 100 percent increase in six years. The airport’s predicting those figures will rise to 3.2 million by 2025.

Economic consultancy Rationale Ltd predicts “peak day” tourists to the Queenstown-Lakes district will rise from an estimated 79,300 next year to about 100,000 in 2028.

Given the current hotel bed shortage, the district’s growth planners may well ponder where those extra tourists will stay if the council clamps down on the likes of Airbnb.

David Williams is Newsroom's environment editor, South Island correspondent and investigative writer.

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