Byron Shire Council’s plan will hurt us all
Who will be adversely affected by the Byron Shire Council letting proposal?
If council gets its way, a major effect, and one which is a goal of the anti-business faction of the council, is the very likely devaluation of Byron property prices.
This applies to all properties, not just properties engaged in short-term letting.
There are many different scenarios and reasons why properties are available for holiday letting.
Holiday homes that have been in families for generations are let for part of the year to pay for substantial land tax and rates that are pegged to current values.
Property owners investing in their future have chosen the real estate sector which depends on rental return. Byron Shire, due to its dependence on visitors, offers the option of short or long-term rental. All is dictated by demand.
The value of property determines the rate income, which is the lifeblood for the operation of the council. The council should have fundamental interest and duty in protecting and nurturing the economic well-being of the community it serves.
Obviously this economic well-being is underpinned by the capital value of property.
Consider the flow-on effect of the council holiday letting proposal on the economy.
Firstly, a substantial amount of visitor accommodation is eliminated. This means that visitors who want to stay here simply can’t. The downturn in visitor numbers means a severe reduction of income throughout the shire.
What happens then?
Businesses of all kinds, already stressed by the economic downturn, will suffer a fall in turnover. In many cases this could take them to or below break-even, severely reducing cash flow. They will do what they can, including cutting margins, which affects the whole business environment, bringing more pressure. They will then be called in by their finance providers and requested to show how they intend to service their loans.
The lenders are already concerned about flattening and falling values.
Loans will be called in and many will be instructed to sell. Businesses will disappear. Residents, including families, will have to leave to find work elsewhere.
The precinct concept will also split the town as real estate in those areas may escalate in price, despite the requirements to upgrade dwellings to Class 3 standards, creating a wealth strip at the expense of the rest of town. The precinct concept also provides a ready-made opportunity for the big corporations to take over the prime positions and apply pressure through the state government for high-density development to satisfy the visitor demand.
Why would council put up a proposal that will damage its own viability?
So, again, who will be adversely affected?
The real answer is everybody.
HLO recommends that all stakeholders demand that the council abandon this proposal and support self-regulation of the holiday letting sector