2 May 2024
Media: Local Democracy Reporter
Topic: Proposed commercial rating of short-term rental accommodation
Enquiry
I had some comment and questions if someone could please help me, to do with the proposed Airbnb (and similar) rating change.
I spoke with host Kerris Brown who disagreed with the mayor's comment they had tried to find a balance between casual hosts and those making significant profits, and said she would stop hosting if it went ahead.
Brown said, for her, offering the four rooms short-term in her family home was a side hustle to supplement the mortgage payments. If she didn’t Airbnb, the rooms would stay empty.
“How else are we meant to keep our noses above water?”
Being rated as a commercial property “beggars belief”, she said. Brown did not believe what she did compared to what commercial premises did.
The Ministry of Business, Innovation, and Employment website provides information on Rotorua’s short-term accommodation occupancy.
From January 2023 to January 2024 the lowest was in July at 44.6 per cent. The highest was in January at 68.8 per cent.
Brown said she averaged 19 per cent between May 2023 and April 2024.
In April she had one room booked for one night.
“And for that I’m going to pay an extra $5000 a year.”
The council estimated between 800-1000 properties offered short-term accommodation in the district and the proposal was expected to generate $900,000 for the council to initially go towards tourism marketing.
While Brown’s property’s rates would increase 103.67 per cent to a total of $8658.83, others in the district Local Democracy Reporting found faced a 187 per cent rise.
This totalled more than $20,000 for one.
Brown argued the council’s math did not add up.
She said if the council expected $900,000 generated from the proposed change, if 900 properties faced a change they wouldpay a $1000 increase.
Brown believed if short-term rentals were to be charged it needed to be a case-by-case basis, such as a resource consent that managed things like car parking, noise, and services to the house.
Hosts like herself offered tourists a different experience to motels, she said, and as accommodation became scarce during busy periods she believed side hustles like hers were needed.
She also disputed the hosts reaped all the benefits, as she actively promoted the city’s tourism offerings to guests.
Can I also ask how hosting properties were identified? For instance, addresses are not provided until booked
Who did this work?
What money has been spent on the drafting of the proposal, including on any consultants, research?
Between 800-1000 properties in the district hosting, how many would face a rating change if this goes ahead?
What does it mean by 60 advertised guest nights? (i.e. you can leave a property on Airbnb for the entire year and only be booked three times)
What advice did the council seek in regards to the structure of the proposal and by who? Why 60 nights?
What happens if the property is no longer used as an Airbnb but is rated as commercial?
How was the "balance" struck?
Response
The reporter was advised that Mayor Tapsell had no additional comment to what the organisation provided.
From Rotorua Lakes Council Group Manager Corporate Services – Thomas Collé:
More than 1000 properties in the Rotorua district are being used for short-term accommodation, and are being advertised on platforms like Airbnb and Book-a-Bach.
Proposal 11A – Rating Policy (Short-term rentals) of the draft 2024-2034 Long-term Plan, raises the question of fairness and equity and whether owners of properties offering short-term accommodation are paying their fair share towards the district and tourism promotion compared to traditional accommodation providers like motels, hotels and campgrounds.
Currently these more traditional accommodation providers incur additional costs such as the Business and Economic Development Rate and a higher general rate that reflects the higher demand they place on council services like roads, footpaths, and parking. These rates are also used to support RotoruaNZ to promote Rotorua as a top tourist destination. Currently properties advertised for short-termaccommodation do not incur these additional costs but do benefit from the exposure and marketing funded by the commercial operators who do pay these rates.
Short-term accommodation options have become more popular with the rise of user-friendly platforms like Airbnb and Book-a-Bach. Before the pandemic the district had between 1200 to 1300 properties offering short-term accommodation. During the pandemic, these numbers dropped as properties returned to the long-term rental market but we are now beginning to see a resurgence in short-term accommodation offerings.
To gain a better understanding of the situation in Rotorua, council used a third party to analyse online public information regarding short-term accommodation. Note to reporter: due to commercial sensitivity we cannot give you that cost.
When developing the proposed policy, options for 30, 60, and 90 day advertising thresholds were considered and Council elected to propose a short-term rental rating policy that applies to those advertising accommodation availability for 60 or more days per year. We also looked at what other councils are doing. For instance, Queenstown has a voluntary registration system and applies different rates based on how properties are used.
Currently Rotorua Lakes Council has a 100 day policy where if a property is used as short-term accommodation for more than 100 days then it is rated as a commercial property. What we are proposing is to change this threshold from 100 or more days of occupancy, to 60 or more days advertised, as short-term accommodation.
It is intended that the proposed policy will find a fair approach to distinguish between homes used predominantly for family living but occasionally advertised for short stays, and those solely used for commercial purposes. If adopted, the policy would classify short-term rentals as commercial if advertised for more than 60 days. Homeowners that rent or advertise their properties for more than 60 days will be included. Homeowners that rent only part of their home (like one room) won’t be included and were never intended to be. But those using properties solely for short-term rentals would be treated as commercial and pay their fair share towards the district and work done to promote Rotorua as a top tourist destination.
If ratepayers providing short-term accommodation in Rotorua have received a letter to say their rates will include the Economic Development Rate from 1 July (if the policy is adopted), but don’t believe their property falls within the proposed criteria, they’re encouraged to contact Rotorua Lakes Council on 07 348 4199 or info@rotorualc.nz so a staff member can look into this.
If Council adopts the proposed policy as part of the 2024 – 2034 Long-term Plan, the rating information database (RID) for all properties in the Rotorua district will be updated by 30 June 2024. This database will determine whether a property is residential or commercial for the following year, effective from 1 July 2024. If a property owner ceases short-term accommodation provision during the year, their rate cannot be reset until the next RID update. Once a rate is set, it cannot be adjusted unless there was an error. If the proposed policy is adopted and ratepayers planto cease providing short-term accommodation before 1 July 2024, they will need to notify council about this before 1 July.
So far we’ve received more than 200 pieces of feedback on our 2024-2034 Long-term Plan and we encourage others to do the same.
To provide our Rotorua community with more opportunity to have their say, the Long-term Plan consultation period has been extended to 5pm, Friday 10 May. Feedback will help to inform final decision-making.
Read about what's planned and share your views on Council's preferred options.
All feedback will be considered by Council and used to finalise the Long-term Plan.
There are various ways to share your feedback – learn more by visiting www.rotorualakescouncil.nz/ltp
Note to reporter: for more information on Proposal 11A – Rating Policy. Here is a link to part of the 18 October workshop relating to rating of short-term rentals:
https://youtu.be/bfSMX8S5eIg?list=PLRVp2Vvzh6cEZ_iV9ZK8hUU13lBo6B90O&t=8312
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Media: Crux News (Queenstown)
Topic: Proposed commercial rating of short-term rental accommodation
Enquiry
I’m a reporter in Queenstown for digital news platform Crux and have been following your discussion around commercial rates for short term accommodation providers in business more than 60 nights a year. Can you provide some comment on the council’s plans to enforce this if it is adopted? Will council actively keep tabs on, for example, Air bnb properties to see when they tip over the 60-night threshold, and how will they do that - I’ve been told about some third party apps that can be used to gather the data, or is Air bnb willing to share data, or will it be a manual process of checking Air bnb listings against rates information, or will you rely on complaints?
Response
From Rotorua Lakes Council Group Manager Corporate Services – Thomas Collé: If the policy is adopted Rotorua Lakes Council will use a third party that analyses online public information regarding short-term accommodation for monitoring purposes and it will be enforced by Council staff.
