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Cr David Benson-Pope said the council had been caught in a ‘‘perfect storm’’ as councils and their rules were playing catch-up to ‘‘a new idea that people have taken to like ducks to water’’.
The Otago Motel Association has been lobbying for change since 2014, but this week council finance and commercial general manager Dave Tombs said ‘‘no-one’s come up with a ... perfect model’’ for dealing with residential short-term accommodation providers.
He presented a report to the council that showed how nearly 300 residential short-term visitor accommodation businesses could begin paying rates similar to some bed and breakfast operations in Dunedin.
The report also included advice from law firm Gallaway Cook Allan stating the council could not force ratepayers to declare their properties as residential short-term accommodation and that to be included in a new rating category would require a voluntary declaration from the owner.
Cr Jules Radich questioned the value of relying on a voluntary approach.
‘‘My observation is that people aren’t prone to volunteering to pay extra money,’’ he said.
Cr Christine Garey queried how the council could define those properties it believed ought to be paying rates as a business.
She said it was clear some properties advertising short-term stays online were ‘‘definitely’’ houses that had been taken out of the property market.
New Zealand property rental platform Bookabach has criticised the approach taken by local authorities and called for a Government-led response.
‘‘In other parts of New Zealand, the application of commercial rates on short-term holiday letting has increased the cost of tourism accommodation, forced mum-and-dad bach owners to withdraw their own holiday homes from the market and sent valuable tourism dollars to other parts of the country,’’ Bookabach corporate affairs director Eacham Curry said.
Yesterday, Otago Motel Association president Alex Greenan said he was frustrated the council had decided not to create a new rating category for residential short-term visitor accommodation for next year.
‘‘I will be in a box at this rate,’’ he said.
While council staff had compiled a list of 261 qualifying properties, Mr Greenan said he believed the number of residential short-term accommodation providers in the city would be closer to 1000.
Otago Property Investors Association president Kathryn Seque said the council ‘‘made the right decision’’ but hoped they would consult stakeholders further before it made an informed decision.
‘‘I am glad they decided to wait the next 12 months and hope they will be in contact regarding community involvement and input.’’