The City of Sydney council is set to explore a proposal to reduce the cap on un-hosted short-term rentals from 180 days to 60 days per year. This initiative aims to address the ongoing housing affordability crisis in the inner city. Greens councillors, who introduced the proposal, believe it could return thousands of homes to the long-term rental market.

During a recent council meeting, the motion to investigate the plan received unanimous support. "More and more, we're seeing whole houses or apartments being ripped away and turned into mini-hotels, rented out short-term for huge profit," said Greens councillor Matthew Thompson. He noted that since the COVID-19 pandemic, the number of short-term rentals, particularly through platforms like Airbnb, has surged. "On conservative estimates, there are at least 5,000," he added.

Thompson highlighted that the proposal has garnered significant attention from property investors, many of whom expressed their opposition through emails sent to councillors prior to the meeting. "We actually had a flood of emails over the weekend from property investors and businesses that have ripped hundreds, sorry thousands, of homes from the inner city … calling on us to vote down the motion," he stated during an interview on ABC Radio Sydney Breakfast. He emphasized the urgency of the housing crisis, saying, "In a housing crisis when people can't find homes, every house should be a home."

A report commissioned by the council last year revealed that 68 percent of short-term rental hosts in Sydney manage multiple listings, with some having ten or more properties. Thompson pointed to Byron Shire, located on the state's north coast, as a successful example of a similar cap reduction. In September of the previous year, Byron Shire limited non-hosted short-stays to 60 days annually, resulting in a 15 percent decrease in short-term rentals in the year following the change, according to figures from the NSW Department of Planning, Housing and Infrastructure.

The council's proposal comes shortly after a childcare center in the inner-city suburb of Millers Point announced its closure due to low enrollment numbers. Local residents have expressed concerns that the area has increasingly become dominated by short-term rentals. Millers Point resident Cormack Champion shared his observations, stating, "The problem is much worse than people realize. We've had, I think, it's about eight young families that had young kids just in our street that have been pushed out in the last 18 months. There's a street that has over 100 or so houses. There's only two permanent residents in that street; every other door is lock boxes."