A massive rule change could spell bad news for the hordes of tourists visiting Byron Bay as a tighter cap on short-term holiday rentals is enforced.
From Tuesday, holiday home owners will be restricted to leasing their homes to holidaymakers for no more than 60 days per year - one third of the already restrictive 180 days some homes in the northern NSW hotspot currently adhere to.
The controversial new rule had been pushed by the local council for many years who wanted restrictions limiting the amount of non-hosted short-term rental accommodation (STRA), news.com.au reported.
Locals, who believe STRA properties have made permanent rentals in the area unaffordable and limited in numbers, have welcomed the new restriction - but others believe the reform will devastate the economy.
The bustling beachside town heavily relies on the tourism industry and attracts more than two million holidaymakers every year.
The decision, which was handed down last year, is the first 60-day restriction for anywhere in NSW amid hopes the change will positively impact the long-term rental market.
Ballina MP Tamara Smith took to social media on Monday to express her hopes for the stricter cap following a ten year struggle for Byron Bay.
I am hoping that it works … that we see thousands, or many hundreds, of whole homes come onto the private rental market, she said.
It is feared short-term rental accommodation (STRA) in Byron Bay will become more expensive when the 60 day cap for renting out a property starts on Tuesday (picture a tourist looking at Wategos Beach, Byron Bay)
More than two million Australian and international tourists flock to the Byron Bay region each year - with their money supporting local jobs (pictured Byron Bay Regional Markets)
We know they are going to be expensive, but we are the only local government area in the entire state that is having this trial… and we really want it to be a success, Ms Smith wrote.
The new cap was spurned on by the housing shortage and homelessness in the area, which is one of the worst in Australia.
When an annual survey and count of homeless people sleeping rough was carried out statewide in February, an astonishing 348 were found in Byron Bay - a 16 per cent rise from last year.
The City of Sydney had less, with 208 people.
The spike in locals sleeping on the streets, combined with Byron Bay having one of NSWs highest amount of short-term rental properties - 8.5 per cent - has residents hoping the new cap will see holiday homes enter the long-term rental market.
But many homeowners believe it will not fix the housing crisis in Byron Bay - especially with some areas being exempt from the rule.
Beachfront properties, homes in the Byron Bay CBD and those in the prestigious precinct of Wategos Beach - are exempt from the new cap.
Some of the exempt back streets have always been the most affordable to tourists - and it is now feared that these properties will increase their prices - especially since these areas will soon be able to operate without a cap.
There are exempted areas (in purple) from the new cap - and soon these parts of the region will be able to operate without restrictions. It is feared prices will be pushed up
Airbnb Australia and New Zealand head of public policy Michael Crosby told Daily Mail Australia caps dont solve housing issues.
Night caps, both locally and internationally, have not worked to improve housing affordability or supply, he said.
In New York City where short-term rentals have effectively been banned, hotel prices have soared and rental availability and affordability has not improved.
Tourism will suffer given guests will have less affordable accommodation options.
Mr Crosby said Airbnb guests in Byron Bay spent a whopping $200 million in the community in the 12 months to March 2023.
And helped to support 800 local jobs, all the while empowering local hosts to make extra income in the midst of a cost of living crisis, he said.
Mr Crosby suggests one way for the NSW government to increase affordable housing supply is for tourists to pay a small levy.
It is believed that most of the non-hosted holiday homes listed on Airbnb in Australia are primarily used as second homes by their owners - making it highly unlikely they will ever enter the long-term rental market . Pictured are current Byron Bay Airbnb listings
It is also believed that many properties available on Airbnb are primarily just used as holiday homes for the owner - making it highly doubtful they would ever enter the long-term rental market.
Daily Mail Australia contacted Byron Bay mayor Michael Lyon for comment.