Driving People Out of Homes

The conversion of so much housing stock to a “distributed hotel model” helped propel rapid growth in visitor numbers. This triggered push back from local resident populations which developed a sense that tourism was overwhelming local infrastructure, crowding out residents and altering the fundamental qualities and values of neighbourhood communities.

Ultimately a sense of “over tourism” developed in many districts where RVA consents were rolled out on a large scale. And this in turn contributed to the loss of social license that tourism had enjoyed up until the borders closed in response to Covid.

Councils generate more rates revenue from commercial properties than residential ones. So, councils, including the QLDC, have a perverse incentive to keep ramping up the issuing of RVA consents.

The ultimate beneficiaries of the availability of NZ housing for distributed hotels are the booking agents, with the greatest beneficiary the American multinational AirBnB. While some financial returns flow to private investors in those properties, home rental agencies’ stock value reflects the size of their holdings in the marketplace.

The unbridled growth in RVA consents will undermine attempts to “re-set”, “regenerate” or “pivot” NZ tourism. Allowing so much of the housing estate to convert from residential accommodation to commercial visitor accommodation will only serve to exacerbate existing challenges around housing access and affordability, continue to erode neighbourhood values and fuel the loss of tourism’s social licence throughout New Zealand.

Continued growth in RVA consents will also erode prices for accommodation both for existing consented properties and for the formal sector. Allowing continued exponential growth of RVA consents will thus erode the value of the existing accommodation asset base.

Placing a cap on the number of new RVAs permitted in a District could preserve the value of existing RVA consents. Rolling back some existing consents if/when properties discontinue as short-term visitor accommodation and revert to residential or long-term rental markets could actually increase the value of pre-consented properties.

Few, if any, local bodies appear willing to bring the expansion of RVA consents under strategic management. Alternatives to perverse incentives to keep issuing RVA consents seem to elude local body policy makers – compensate the loss in revenue by raising rates on empty properties, for example. In addition, there has been legal push-back. AirBnB brought legal action against the QLDC when it attempted to introduce some minor control measures in the Lakes District. And this appears to have cowered the council because it is ill equipped to defend against the multinational in court. In sum, the QLDC is not effectively positioned to move away from current policy settings and lacks the political direction to do so.

A national-level approach to RVA consenting appears warranted. Central government intervention in local body prerogative in this area is warranted. A range of options could be developed modelled on control measures introduced in jurisdictions in Europe and North America.