Tuesday, June 5, 2018

Gerry Eckhoff: AIR BnB

A former Prime Minister of England once observed that getting a good outcome from a new tax is a lot like standing in a bucket and trying to lift yourself up by the handle. 

The current debate over whether Air BnB homeowners should be regarded as commercial players in the tourism industry and rated accordingly highlights some interesting issues and wonderful euphemisms. “A level playing field” is demanded by commercial operators who seek to eliminate the so called unfair advantage of the poor old house holder who seeks to utilize a spare bedroom in their biggest asset. 

Level playing fields don’t exist despite the plaintive cry from those who already are bigger, stronger, faster, wealthier but who really want the field to themselves. We are asked to forget that size and scale matters and that purchasing power by major players in the accommodation industry really does give them significant advantage. The hotel and motel chains however cannot trump the personalized single unit home stay available for travellers looking for the real Kiwi people and experience, not to mention individualized interaction and service.

It is entirely obvious that all industries change. Even motels were once something of a novelty not so many years ago and undoubtedly took customers away from hotels who for a time saw occupancy rates diminish. BnBs tend to appeal to a certain sector of tourists, just as motels do over hotels. For councils to now suggest that your spare bedroom - being occupied for a day or three by visitors is some form of rampant commercialization of the family home is, well, the politics of stupid. 

Ever watchful for the chance to regulate (which is another word for rate), Councils are now looking with a jaunty eye at full regulation of the house holder as yet another prospective source of income looms. One can only image the dreaded knock on the door from the Council's accommodation police, checking to see whether a report of sheets on the washing line (on a daily basis), adds up to subversive activity occurring within your family home:  “Good morning Madam - I’m from the council and I’m here to check on your daily usage of sheets shower and shampoo”.  “Oh, and I would like to check on your cereal usage as there has been reports of increased flows within our drainage systems”. I don’t think so.

Making a few bob at home is not yet an illegal activity. As many people now work from their place of residence, there clearly is a potential for council to expand their rent seeking activity as designers, call centre operators, artists, writers, guidance councillors, researchers etal can all work on a commercial basis -  from the family home. If commercial activity is really the problem, why have councils always remained silent on these other aspects of commercial activity? Health and Safety is now given as a reason to control the industry. Is an overseas guest’s health and safely really at more risk than a family member or a visiting friend? Few would suggest so.

Councils rate people on the capital value of their home. No rebate is ever offer to those with a four bedroomed house of which only one or two are utilized. The four bedroomed houses will generally attract a higher rate than a two or three bedroomed house. If it is the council's job to be fair to all – which it's not -  then the ratepayer must be offered a rebate for the under-utilization of their dwelling. Water meters solve the water usage issue so the ‘rate for service’ principle flies out the window with this new tax proposal.

Perhaps comment from Dunedin’s Mayor Cull and LGNZ chair, would be useful on the complete failure of his and all other councils to rate the multitude of Government departments from schools, hospitals, universities and indeed students who use ratepayer funded facilities such as parks and reserves, roads, public good street lighting etc and but pay nothing towards the upkeep of the towns and cities. The highly unpopular poll tax would be a fairer way to ensure all pay their way? It's likely however that Mayors and councillors' tenure would be exceedingly brief once a poll tax is implemented.

How refreshing it would be for our elected representatives to say, “We encourage our overburdened rate payers to help make ends meet with a little bit of entrepreneurial activity that undoubtedly assists our reputation as a great place to visit and maybe even stay a while.” 

We need new ratepayers not new rates as no council anywhere has raised the prosperity of the people or region by imposing a new rate or tax.

Gerry Eckhoff is a former councillor on the Otago Regional Council and MP.  Disclaimer: We do not operate any kind of BnB.

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