Recommended 60-day cap on short-term rentals in Byron is validation for Eurobodalla Shire Council, according to the mayor

The Independent Planning Commission recommended to the NSW Government that use of non-hosted short-term rentals in the popular tourism shire of Byron Bay Shire should be limited to 60-days per year, unless granted council approval, to address the homelessness crisis in the shire.

Byron has the highest proportion of short-term rentals in NSW, at about 8.5 per cent of all dwellings. It also had the highest level of rental stress in the state, according to the 2021 Census.

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On the south coast, 5.6 per cent of dwellings in the Shoalhaven are short-term rentals; 4.2 per cent in the Eurobodalla and 3.3 per cent in Bega Valley Shire.

The percentage of dwellings on the south coast used for short-term renting has only increased since COVID.

The Census showed the Eurobodalla had the highest proportion of homes unoccupied for any LGA in NSW, with 25.4 per cent of houses empty on census night. The Shoalhaven had 23 per cent of dwellings unoccupied on census night; Bega Valley 16.6 per cent. The NSW average was 10 per cent.

The report is formal planning advice given to the NSW Government that Planning Minister Paul Scully will now consider.

Eurobodalla Shire Council mayor Mat Hatcher said the report affirmed what the council had been requesting from the state government.

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In June 2022, the council wrote to the NSW government asking for the council to have the ability to enforce a limit on the maximum number of nights short-term accommodation could be used in a year. The request was rejected.

"We aren't saying we want to do it - or that we will do it - but this is a crisis, we need to be agile, and we want the state government to give us the ability to be able to do it if we need," Cr Hatcher said at the time.

Cr Hatcher said while the report provided data to back up what the council wanted to do, it didn't change the situation at all.

"It's a report. Nothing is actually changing. Byron isn't able to do it yet," he said.

"It's a lot of speculation until [local councils] actually have the ability to change something.

"The best recommendation that has come out of it is 'you should be letting local council make the decision'.

"This report validates what the council has been asking for so long. Now it is on the State Government to make some decisions."

Cr Hatcher said it was difficult for the council to have an official position on whether they would limit the use of short-term rentals because they didn't have the ability to enforce anything under current legislation.

However, Cr Hatcher said short-term rentals were an essential part of the economy on the south coast.

"The money flow from the tourism sector is what keeps this place going every year, so we can't simply shut off the tourists from coming here," he said.

"We don't have enough hotels for the tourists who want to come here. We need short-term rentals and we need to look after locals.

"We should not penalise a young family from Canberra who wanted to come down here and buy a holiday house and use it half the year and spend their money while they're down here."

Cr Hatcher said the housing problem in the shire was more complicated than investors buying houses and that the real solution must increasing housing supply. He said an increase in housing supply would drive down the return on investment, freeing up more houses for locals.

Cr Hatcher said the council was working to speed up the development application process to increase housing supply.

He said limiting the use of short-term rentals was "not the fix".

"It could be something that we look at down the track if we have the ability to," he said.

Ultimately, Cr Hatcher sees the State and Federal Governments as having a responsibility to step in and help with the crisis, and said he was optimistic after the recent state election.

"I am confident that the [NSW] Government now is looking at any any new way to to address the issue," he said.

A spokesperson for the Department of Planning and Environment said it was important to balance all the different needs of the community, residents, businesses and visitors.

"Regarding short-term rental accommodation, we need to make sure we strike the right balance for the entire community," the said.

"The statewide short-term rental accommodation policy plays an important role in regulating the industry, providing consistency across the state, and balancing the needs of hosts, guests, and neighbours."

Bega MP Dr Michael Holland was contacted for comment.

In 2021, the NSW Government changed the short term rental accommodation (STRA) legislation so regional council's were given the option to enforce a 180-days-per-yer cap on non-hosted (where the host does not live on site) STRA.

The Eurobodalla chose not to adopt this cap.