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Taking the Air out of Short Term Rental Accommodation – changes to the Christchurch District Plan

October 2, 2020

Gerard Cleary Partner
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Short term property rentals have long been part of the fabric of New Zealand society, providing opportunities for property owners to earn additional income and for tourists to enjoy a more realistic and often less costly holiday experience.  Over the last decade however, this rather humble and benign “renting of the bach” has become synonymous with the global Airbnb empire.  The rise of Airbnb has led to wide ranging concerns regarding unintended impacts including, in particular, the reduction in supply of long term rental properties leading in turn to a decrease in housing affordability.  Enter regulation in the form of planning rules. 

 

Short term accommodation rentals have never consciously been regulated in the Christchurch District, Banks Peninsula included.  Somewhat surprisingly, it was completely overlooked in the full review of the Christchurch District Plan during 2014-2016, the unfortunate consequence of which is that by default it became classified as a discretionary activity for which resource consent was required.  Not unsurprisingly, hardly anyone applied for resource consent, most probably because property owners were simply unaware that resource consent was necessary.  A lack of resources on behalf of the Christchurch City Council, together with difficulties in identifying properties being used for short term accommodation, has meant that this wholesale non-compliance with the District Plan has gone largely un-enforced.

 

The Council is now taking action, with the release of a Proposed Plan Change 4 (PC4) to the District Plan: Short Term Accommodation.  Reduced to its simplest terms, PC4 seeks to introduce limits and controls on both “hosted” and “unhosted” short-term accommodation. The former is essentially akin to bed and breakfast operations where at least one permanent resident is on site for the duration of a stay. As the name suggests, unhosted accommodation denotes the absence of a host.

 

The limits and controls on short term accommodation depend on the particular Zone.  For present purposes, the focus is on Residential and Rural Zones as these provide the most popular locations for short term accommodation rentals.  Within Residential Zones, hosted visitor accommodation is a permitted activity  subject to limits on the number of guests (six), check in and check out times are limited to between 6.00am -10.00pm and a requirement that guests do not hold functions or events (i.e. parties) within the rented property.  Subject to meeting these standards, no resource consent is required for hosted accommodation.

 

Unhosted accommodation in Residential Zones is a controlled activity for up to a total of 60 nights or fewer per year, subject to meeting the same standards as prescribed for hosted accommodation.  To use a property for a total of between 61-180 days is a discretionary activity, and a non-complying activity for a total exceeding 180 days per year.

 

Within the Rural Zones of the Christchurch District, with some minor exceptions, hosted visitor accommodation is a permitted activity subject to limits on guest numbers and a bar on the holding of functions or events.  Unhosted accommodation is a permitted activity for up to a total of 180 days, beyond which it is a discretionary activity.

 

Classification of a use as a controlled activity means that a resource consent is required, albeit the Council cannot decline an application. Applications for discretionary or non–complying activities on the other hand can be declined, with approval for the latter category of activity generally being  the most difficult to obtain.

 

As with much regulation in district plans, there will be competing perspectives as to the need or otherwise to regulate short term accommodation rentals.  Certainly, one benefit of PC4 is that it brings a degree of clarity to the issue within Christchurch District, and provides for a regime whereby the Council can exercise greater control over any adverse effects or strategic implications that may arise from widespread and unchecked use of properties for short term accommodation.  Other accommodation providers such as motel owners will also welcome PC4 as a step towards levelling the playing field in terms of regulating what they regard as an identical commercial use of land.  On the flip side, there will no doubt be many property owners who regard the requirement to obtain any form of consent as an unnecessary imposition on a use the effects of which are identical to all other forms of (unregulated) residential use.  Others may be concerned that their investment in property may be jeopardised by regulations that have the potential to remove the very source of income necessary to sustain their investment(s).  Furthermore, the cost of obtaining consents for unhosted accommodation may act as a disincentive to homeowners, in turn limiting the range of accommodation available to tourists.

 

If you own a property which you rent out for short term accommodation,  you who will be impacted by PC4. There is a limited window of opportunity to comment on PC4, with submissions closing on Thursday 22 October 2020.

 

 

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