Air Bnb

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<img src="https://counter.theconversation.edu.au/content/71488/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Australian homeowners who have been sharing their homes for profit using Airbnb, or like services, could be subject to the same “robo-debt” recovery services that have targeted Centrelink recipients. 
This is problematic because of ongoing uncertainties about the legal relationship between owner and Airbnb guest, and whether or when the property can be subject to land tax. Despite this, owners are receiving automated notices and may possibly be admitting liabilities and paying fines they shouldn’t. 
Until recently, governments, especially in Australia, have tended to be cautious and conservative in response to the sharing economy. That is not just because of the long-standing inability of regulatory systems to keep pace with technology, but also because of the threat of disruption to traditional industries and those who work in them. Despite this conservatism, the shift to a sharing economy has had a sense of inevitability about it. 
Airbnb has had perhaps the most long-standing and significant influence in Australia, in most cases prior to any specific legislation being created to regulate it. And if trade and commerce are free of regulation, they are also free of government control, protection and taxation. In many cases legislators are still to work out how to regulate or tax this new economic model.  
This Notice of a Data Matching Program shows the ATO casts a wide net (click to enlarge), and the results are shared with state revenue offices.Commonwealth Government Gazette
While some arms of government, such as lawmakers, may have struggled to keep up with the information revolution, others, such as law enforcers, have not. Over the past decade, state and Commonwealth agencies have worked together to develop data aggregation and data-matching systems into a powerful regulatory surveillance tool. 
The Australian Taxation Office (ATO), for instance, reportedly data-matches some 600 million pieces of data. It shares the results with state revenue offices (which are responsible for land tax). These offices aggregate the ATO data with their own records along with data from other agencies, such as rental bond authorities, electoral rolls and apparently publicly available information.
The volume of data is massive, and limited only by the power of the computers used to identify target behaviour.
It is very likely, however, that state revenue offices can identify (see, for instance, here, here and here) when houses are being used for income-generating purposes (especially when owners declare that income as required to the ATO).
<h2>What’s the problem with this?</h2>
The problem is that the law is hardly certain on whether homeowners do owe land tax on short-term lodging arrangements like Airbnb. While each state and territory differs in the approach to land tax, the general rule is that a person’s principal place of residence is exempt. Land tax generally applies only to investment/second properties or commercial premises. 
A landowner can do a number of things with their property – including generating revenue there – without turning it into a commercial premise. To think otherwise would mean parents who charged their adult children board would suddenly see their home treated as a business operation – and so would people receiving compensation for hosting home-stay students, or allowing a house cleaner or au pair to live in the house in exchange for reduced wages.
In fact, current laws are relatively nuanced when it comes to working out when a house is being used as a “principal residence” and when it is a “residential tenancy” or commercial premises. It requires looking at a range of factors, weighing them up, and ultimately working out if the owner is in exclusive occupation of the property for their own domestic purposes (even if they make some money there). 
If a person staying in the house does not undermine the exclusive occupation and control of the overall property, then they are a lodger and the home is a principal residence. 
If they do (for instance, because they have a separate lock on the door and can exclude the landlord), they are a residential tenant. The part of the property they occupy is then not the principal residence of the owner. 
<h2>Data matching struggles with nuances</h2>
Such nuances are beyond the current scope of automated computer data-matching systems. And the problem with Airbnb is that every single home-stay arrangement is different. 
In some circumstances, a guest may stay only a day or so, sharing common areas, probably not getting a lock on their door (maybe even staying on the fold-out bed in the living room). In other circumstances, the relationship may resemble more of a residential tenancy, taking possession of the whole house for much longer periods. 
The other problem is that many landowners will have been operating under the assumption that they do not owe land tax on their homes. As a result, state tax offices face a dilemma: leave Airbnb alone until the law catches up, or make judgments on thousands of home-sharing arrangements to determine whether they are lodging arrangements or residential tenancies. 
Some revenue offices appear to have opted for the latter course. And they have dealt with the logistical problem, as Centrelink has done, by employing robo-debt-like approaches.
<h2>Caught in the data dragnet</h2>
As an illustration, in Tasmania, the approach involves using evidence from the dragnet for information that the property is being advertised for accommodation, or that it is generating income. If this is the conclusion, the homeowner is issued with an investigation notice. 
The investigation notice requires, under the force of statutory penalty, that the homeowner provide information relating to current and prior home use. Based on the information from these sources, it is then suggested that the principal place of residence of the titled and resident owner was only part of the building. This leaves the remainder of the property valued for land tax purposes, with the owner then potentially liable.
We suspect that many homeowners receiving the letters do not choose to contact a lawyer. Instead, they pay fines ranging from thousands to tens of thousands of dollars. Those who do challenge the assessments face extended uncertainty and expense. 
An additional problem in this area is that state revenue rulings are not recorded and publicised like Australian Tax Office rulings. This means we don’t know how many successful or unsuccessful challenges there have been. It also means many tax lawyers and accountants may be unaware of the risk to homeowners who provide home-sharing arrangements. 
<h2>What should Airbnb hosts do?</h2>
People who have received such letters should definitely consult with a lawyer with expertise in state tax.
Those who haven’t received notices but who are hosting Airbnb guests, or intend to, should still seek tax advice, preferably from someone legally trained. Given the ease with which people can advertise parts of their homes on Airbnb, it can be easy to forget that you are entering into a business transaction and generating income. Homeowners should protect themselves in advance.
State governments should reflect on this too. While it is legitimate to earn revenue from the sharing economy, the inherent unfairness of retrospectively penalising people who reasonably believed that their homes didn’t attract land tax is palpable. 
Using automated software to “efficiently” achieve this aim by removing the human element is even more unfair. The practice really should stop until the law is modified to make the system more transparent, fair and, it might be argued, human.
Brendan Gogarty is lecturer in Law, University of Tasmania and author for <a href="https://theconversation.com/profiles/brendan-gogarty-146584" target="_blank">The Conversation</a>.
Lynden Griggs is senior lecturer, Faculty of Law, University of Tasmania and author for <a href="https://theconversation.com/profiles/lynden-griggs-281247" target="_blank">The Conversation</a>.
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jchancellor-FAypfDUnLy

Airbnb hosts beware – it’s not just Centrelink using robo-debt systems

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GUEST OBSERVER
New York's ban on commercial short term lettings – and the advertising of non-conforming short terms stays – should provide a model for Australian jurisdictions.
New York state law prohibits apartment owners from <a href="https://www.reuters.com/article/us-airbnb-regulation-insight-idUSKCN12L0DY" target="_blank">renting units for less than 30 days</a> if they are not present, with fines of up to US$7500 forbreaches. On Friday, New York Governor Andrew Cuomo approved a law that also outlawed advertising of short-term stays on sites such as Airbnb that violated the existing law. 
The New York law follows similar crackdowns in cities such as San Francisco, Berlin, Paris and Amsterdam, while Dublin and London are also considering tightening regulations. 
The global move to curb commercial unregulated short-termaccommodation comes less than a week after a NSW Legislative Assembly Inquiry recommended a reduction in regulation, a move that has been strongly opposed by resident/strata bodies and regulated accommodation operators. 
It is ironic that at a time when city administrators across America and Europe are imposing major restrictions on unregulated commercial short-term accommodation operators that a NSW parliamentary committee should be advocating a softening of regulations
The overwhelming majority of listings for unregulated short term accommodation in Sydney are for full houses and flats involving no sharing, and increasingly the sector is being controlled by commercialoperators with multiple properties available 365 days a year. 
This is the same situation that has occurred in American and European cities and they have taken action to control the situation.
We call on Australian governments at all levels to take note and take action to protect residents, communities and regulated accommodation operators.
As in New York we want a very specific ceiling on the number of days an apartment or house can be let out on the short-term market and we want online distribution channels to be held responsible for ensuring these limits are not exceeded and that they advertise only properties that are compliant – meeting safety, insurance, body corporate, strata, council and state regulations. 
We are not against genuine ‘sharing’, but we believe there needs to be sensible and proportional regulations imposed on non-resident commercial property owners – especially multiple-property investors – who rent out full properties for short term stays.
Carol Giuseppi is chief executive officer, Tourism Accommodation Australia and can be contacted <a href="https://nsw.tourismaccommodation.com.au" target="_blank">here</a>. 
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New York bans commercial Airbnb-style short-term letting, now it’s time for Australian jurisdictions to follow suit

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<img src="https://counter.theconversation.edu.au/content/63932/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Infrastructure in our cities – let’s call it the hardware – remains much the same as ever, but the software – the way we use it – is transforming rapidly. One piece of that software, Airbnb, is dramatically reshaping the world’s cities.
The digital platform allows citizens to find and rent short-term accommodation from other citizens. Airbnb has the potential to rupture the traditional spatial relationship between tourist and local, making our cities more vibrant and diverse places to live in and to visit.
The question is: what opportunities and dangers does the platform present? What are the implications of repurposing existing residential infrastructure for short-term accommodation? What happens when the global “sharing economy” meets a city’s suburbs?
<h2>Lessons from an early adopter</h2>
Melbourne was an early adopter of Airbnb. It is also one of the top 10 cities for global travellers on Airbnb. What insights can be gathered from its experience?
According to Airbnb, three-quarters of listings worldwide are outside major hotel districts. Airbnb has three types of property listings: entire homes, private rooms and shared rooms.
Entire homes make up over half the total number of Melbourne’s metropolitan listings. Data collected in January 2016 reveals that their distribution is relatively consistent with that of hotels and licensed accommodation, which exist in large concentrations in the CBD and inner city.
Many hosts who list entire homes lease or sublet when they go away. In Australia, tenants require permission from their landlord to sublet, so there is little risk for the landlord if they follow due process. But analysis by website Inside Airbnb indicates that about 75% of entire-house listings in Melbourne are available for over 90 days per year.
Hosts with multiple properties manage about a third of all the entire-house listings in Melbourne. These operators hold an average of three properties, but some have dozens. Through Airbnb, these brokers are turning existing housing infrastructure into informal, distributed hotels while saving on capital costs, overheads and wages.
Globally, the Airbnb phenomenon has been blamed for driving up rents, accelerating gentrification and displacing local residents by reducing available housing stock.
In Melbourne, the boom in high-density development in the CBD has resulted in an excess of homogeneous apartment dwellings. Bedrooms without natural light, as well as insufficient floor area, outdoor space and storage space, characterise many of these developments, rendering them effectively unlivable for long-term residents. But these properties are attractive to itinerant tenants seeking affordable inner city accommodation. 
Shared rooms in Melbourne constitute only about 2% of all listings, but they are almost exclusively confined to the CBD. Box Hill (14 kilometres east of Melbourne), and Maidstone/ Braybrook (eight kilometres west of Melbourne) are secondary outlying hotspots. The majority of CBD listings are around new apartment towers near Southern Cross Station (at the western end of the CBD) and RMIT University.
A number of already small two-bedroom apartments in the Neo200, Upper West Side and QV1 towers are operating as gendered dormitories. These often sleep eight, with four to a room. Overloading these apartments creates potential fire-safety and hygiene-compliance issues.
Short-term letting via sites like Airbnb allows investors to earn up to three times the amount they’d receive in rent (the average cost to rent an entire home is AU$189 per night). Travellers benefit from competitive accommodation rates, cooking facilities, convenient locations and access to private pools and gymnasiums intended for residents.
Airbnb acknowledges that professional hosts with multiple listings are exploiting the so-called sharing economy, but has not yet taken steps to regulate this. Governments would do well to implement the long-awaited and much-needed minimum design standards for apartments to curb the construction of developments in the city that fail to cater for residents or which are purpose-built for the Airbnb market (a few local examples are already emerging).
Beyond the obvious need to protect the amenity of citizens, protection of the liveliness and heterogeneity of the city is essential to maintain the kind of “authentic” experience that appeals to Airbnb users in the first place. Melbourne is beginning to follow the trajectory of international cities like London where the investor market, fuelled by capital gains tax exemptions, has pushed residents further and further out. Dispersing the concentration of entire-house and private-room rental is vital.
More promising is the dispersed pattern of private rooms in Melbourne. These represent around 45 percent of listings across the city. While private rooms are still concentrated in and around the CBD, diffuse listings across Melbourne’s middle-ring suburbs realise Airbnb’s ambition to enable access to the everyday spaces of cities.
This pattern makes sense given the mismatch between Australian house sizes, which remain the largest in the world, and changing household structures – most significantly, the decline of the nuclear family. An increase in housing diversity in the middle-ring suburbs is likely to facilitate more entire-house listings in these areas in the future.
We are also seeing evidence of Airbnb driving housing diversity. Annexed and granny-flat configurations are commonly listed in suburbs close to the Melbourne CBD like Brunswick and Caulfield. Loose-fit arrangements like these provide more flexibility to cater to both residents and visitors, and the by-product is slow but genuine “bottom-up” densification.
Government incentives for this kind of small-scale development would help to make this a viable (and, for many, welcome) alternative to densification through high-rise apartment development.
In 2015, Tourism Victoria entered into an agreement with Airbnb Melbourne to promote buzzing inner-city suburbs Fitzroy and St Kilda as “sharing economy” hotspots. But the cost of renting in these suburbs is already exorbitant. Fitzroy was named the second-most-expensive suburb in Melbourne for apartment rental in 2015.
Instead, policymakers could encourage disruption in the suburbs that would benefit both sides.
<h2>What can be done to capture local benefits?</h2>
Airbnb claims that tourists who use the platform “stay longer and spend more”. Through taxation and additional revenue from the sharing economy, governments could fund more extensive and efficient transport networks to service both locals and visitors. Extending transport infrastructure would support the intensification of distributed neighbourhoods and maximise intermingling between tourists and locals.
Bottom-up densification could also be a way forward for Perth. The distribution of Airbnb accommodation towards Perth’s coastal suburbs highlights potential in this space: here, tourism-specific and local infrastructure can converge. This is an exciting prospect for a state that positions itself as a unique travel destination.
Airbnb emerges from the same cultural tendency as the pop-up shop and interim-use place activation. Built environment professionals must recognise it as an urban issue and lead with a framework for targeted, productive disruption.
Airbnb can increase the density of people within existing building stock, while dispersing the positive effects of the tourist economy. This requires more imagination from planners and designers, who first and foremost must consider the interests of individual citizens, whether they are renters or home owners.
Can Airbnb be a part of the solution of increasing urban infill without compromising a minimum standard of living?
Jacqui Alexander is lecturer in Architecture, Monash University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/jacqui-alexander-196982" target="_blank">here</a>.
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