SAT takes a position on Airbnb

The rise of the ‘Airbnb’ concept has caused significant disruption in a planning control context. It is commonly assumed that one can simply use their existing residential property as an ‘Airbnb’ and start renting it out to third parties. However, there is a growing concern that doing so represents a change to an entirely different land use category.

Existing and prospective owners of property should be cautious not to make this assumption and first ensure that the necessary planning approvals are obtained.

In the recent decision of Kogon and City of Vincent1 (Kogon), the State Administrative Tribunal (SAT) upheld the City of Vincent’s (City) decision to refuse an application for change in use to permit the applicant’s dwelling in Moir Street, Perth to be used as ‘Airbnb’ accommodation (Proposal).

It was accepted by all parties that the proposed use was not residential and comprised a use class not listed in the City’s Local Planning Scheme No 2 (LPS2). That said, the SAT deemed the use to be a ‘Holiday House’, a use defined but not listed in the zoning table in LPS2, as the most applicable use and assessed the Proposal having regard to the objectives of the ‘Residential’ zone in which the dwelling was located. It is interesting to note that LPS2 includes the use of land for “short term accommodation” in the definition of ‘Holiday House’.

The residential dwelling the subject of the proposal was a perfect candidate for Airbnb accommodation by virtue of its close proximity to the Northbridge entertainment precinct, Perth CBD and public transport. Indeed, the City’s planning officers also thought it was a good idea and twice recommended that the Proposal be supported for approval. However, the SAT had serious concerns about the Proposal’s potential to impact on residential amenity and its lack of compatibility in the context of the locality.

In particular, the SAT was concerned that approval of the Proposal would result in the introduction of a commercial land use in an area that is surrounded by premises used for permanent residential purposes. This would be likely to result in noise impacts as, in the words of the SAT, “if the premises are suitable for use as a holiday house, then those who choose to stay should be entitled to use the premises in an ordinary manner that one may use a holiday house”.

On that basis, the SAT considered it reasonable to assume that noise coming from a holiday house is likely to be more intense than noise coming from a purely residential dwelling. This, and other adverse amenity impacts resulting from the Proposal such as increased movement of people in and out of the dwelling, was incompatible with its immediate residential context. As a consequence, the SAT found that approval of the Proposal would be inconsistent with the principles of orderly and proper planning as outlined by Pritchard J in Marshall v Metropolitan Redevelopment Authority2.

The SAT commented, however, that if the dwelling were situated at the interface with a mixed use or commercial area it would be less concerned about the Proposal’s potential impacts and likely more open to the Proposal.

The decision in Kogon highlights the need for those considering establishing, or those currently operating, an ‘Airbnb’ or other temporary accommodation to first consider the relevant planning framework and whether that type of development would be suitable in the area. It also serves as a timely reminder that planning approval is required before establishing an ‘Airbnb’ where doing so would be a change in the existing use of the relevant land.

In this sense, one should consider how ‘Airbnb’ accommodation is characterised and treated in the applicable local government’s planning scheme, if at all. For instance, in the Town of Cottesloe, “short stay accommodation” is an ‘X’ type use in residential zones meaning it is not capable of approval. By contrast, “short stay accommodation” in a residential zone is capable of approval in the City of Stirling subject to advertising and discretion.

If you need advice about obtaining planning approval for temporary accommodation such as an ‘Airbnb’ please feel free to contact Lavan.

Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.

[1] [2019] WASAT 75

[2] [2015] WASC 226