3 May 2024
Media: Local Democracy Reporter
Topic: Proposed commercial rating of short-term rental accommodation
Enquiry
NOTE: This is a follow up to enquiries responded to yesterday regarding proposed new rates for short term rentals:
couple follow up questions and polite request to answer some previous:
If it is more than 1000 properties in the district offering this kind of stay why does the draft plan say between 800-1000?
Based on the council's response is it fair to say then that Kerris Brown's property should not be rated as a commercial property given she hosts where she lives in the family home?
How many people who would be rated differently under the proposal have disputed it?
Can I please be provided with the source of the publicly available information?
I do not believe commercial sensitivity should apply here as a reason to not provide information and is outweighed by public interest. I also do not accept the reason why I cannot have the answer be noted only to myself, I will need to explain to readers why I was denied information.
“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.”
Why was this not made clear in the draft plan?
Why does the draft plan did not specify it would be whole-house short term rentals impacted and not casual hosts?
Out of the more than 1000 offering short-term accommodation, how many are used solely for short-term rentals?
How confident is the council it was correct in the number of properties it has identified as solely offering short-term accommodation?
Can these questions please be answered:
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)
The response [provided yesterday] does not explain this.
Subsequent from reporter:
I have gad it clarified by Kerris she was told she would be rated commercial not because of the rooms in her home but because of the tiny home she has on the section. As a portable it isn’t rated on capital rates and it is used for 1/3 of the year as a short term rental and she says lots of these kinds of accomodation would not meet residential standards for long term.
Why does the draft plan not include any detail on who this does and does not impact or by how much?
Response
From Chief Financial Officer and Group Manager Corporate Services, Thomas Collé (responses in red):
If it is more than 1000 properties in the district offering this kind of stay why does the draft plan say between 800-1000?
The numbers are indicative and may change over time.
Based on the council's response is it fair to say then that Kerris Brown's property should not be rated as a commercial property given she hosts where she lives in the family home?
If she continues to reside in the home during the stays then Council’s proposed policy would not apply.
How many people who would be rated differently under the proposal have disputed it?
RLC is currently dealing with 70 enquiries.
Can I please be provided with the source of the publicly available information?
Information about short-term rentals is available on the internet.
I do not believe commercial sensitivity should apply here as a reason to not provide information and is outweighed by public interest. I also do not accept the reason why I cannot have the answer be noted only to myself, I will need to explain to readers why I was denied information.
Happy for you to say we said the cost was commercially sensitive.
“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.”
Why was this not made clear in the draft plan?
Why does the draft plan did not specify it would be whole-house short term rentals impacted and not casual hosts?
The LTP consultation document is intended to provide a summary of proposals but we accept we could have made this clearer. Property owners who received letters were invited to an information session regarding the proposal which enable us to provide more detail. They have the opportunity to discuss their situation with us so that we can confirm with them whether the proposed rate would apply to them.
Out of the more than 1000 offering short-term accommodation, how many are used solely for short-term rentals?
Council sent 912 letters to the owners of properties identified as potentially fitting that category.
How confident is the council it was correct in the number of properties it has identified as solely offering short-term accommodation?
We have a high degree of confidence in the 912 letters sent but expect it may ultimately be fewer as we receive more information from property owners.
How many would face a rating change if this goes ahead?
912 property owners received letters but as above, it is likely to be less than this.
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) The response does not explain this.
Advertised for rent for short term accommodation for more than 60 nights in a year.
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Media: OneRoof (real estate publication)
Topic: Local real estate market
Enquiry
I'm working on a story about the growth in property values before Covid and after Covid. Our research shows that Rotorua saw a 84% rise in property values in the four years prior to the Covid lockdowns, but in the four years after Covid Rotorua's growth only lifted 13%, which was low compared to most other cities.
I've spoken to a real estate agent about this who put the growth prior to Covid down to a huge increase of people moving to the city, but believed the growth was stymied in the post-Covid period (2020 - 2024) because of the publicity around the city's social housing issues which put people off buying or investing in the city and also because investors were selling up a lot of the older investment stock rather than meeting the healthy homes standards.
I wanted the chance to give the council the chance to comment on what it believed the reasons for the huge growth in property values pre-Covid was and also why the growth was a lot less post-Covid? Does it believe the stigma around the city's social housing issues was one of the factors?
What is the council doing to address these concerns that were publicly raised in 2022 or to change this perception? Is the council planning for further demand for property and possible growth and when does it predict this will happen?
The reporter clarified the following:
The figures relating to the 84% rise pre-Covid vs 13% post-Covid is based on OneRoof-Valocity data,
The agent's comments were his own views. However, I have since spoken to another senior real estate agent whose comments have mirrored his around the market being impacted following the publicity of Rotorua's social housing issues.
In terms of the concerns being raised publicly, I'm referring to the hearing
application to continue operating 13 motels in the city as emergency housing and the widespread coverage around that.
Response:
From General Manager District Development, Jean-Paul Gaston:
Without proper analysis, any reasons given for changes in the way the house market is behaving would be speculation.
In the four years prior to COVID we experienced significant growth, matching population growth and residential values. More so than many other centres we experienced significant impact from COVID, particularly in our tourism sector.
The return of international visitors has begun our recovery and we have had an extremely positive summer.
While at a lower level, we can see that our housing market continues to mirror the national trend and we are continuing to buck the national trend when it comes to new homes being built in our district.
Further information provided:
If you would like some more info about how council is planning for growth (and growth projections) you can see our 30 Year Future Development Strategy here - https://letstalk.rotorualakescouncil.nz/future-development-strategy
The strategy sets out where and when housing growth is likely to happen in Rotorua over the next 30 years, and how council plans to support and manage that growth.
