Kiama Mayor Neil Reilly has downplayed concerns that the controversial housing development at Loves Bay will become Airbnb accommodation as the NSW Government looks to crack down on the number of short-term rentals across the state.

Speaking to Kiama Community Radio on 21 November, host Bernie Hems asked Mayor Reilly to comment on the ongoing concerns about the Loves Bay development [you can listen to the full interview here].

Kiama Council approved the development in November 2022 despite concerns from nearby residents that the property was being marketed as a ‘hotel-style’ development despite being zoned in a residential area. 

These concerns were realised a month later when Forte Sydney Property Group, the developer that owns the property, began using the term “oceanfront hotel” in its marketing material.

When host Bernie Hems raised the issue of the developers using terms like “hotel” in their marketing, Mayor Reilly responded: 

“Why did they use that I wonder? I don’t control their marketing, but if they say, ‘OK we’ve got this residential building and we would like you to approve it,’ do we say ‘Just hold on their a minute, is this going to be a residential building or are you going to Airbnb it like so many homes in our area?”

“We’ve had funny things happen in the past where people have described things as one thing and it turns out to be another, and that’s just the pitfalls of people’s basic dishonesty when they approach council. If they want to be dishonest about what it is, how are we to tell? We’re not an investigative bureau, we’re not the FBI or the CIA or ATO or ICAC or any of that, we’re a council. If you say, ‘here’s the plans to our residential building and they comply’, we’ll approve it, and so we should.”

Property owners are entitled to offer short-term accommodations from properties if they wish, and there is no suggestion otherwise. However, the NSW Labor Government has also foreshadowed its plans to crackdown on the number of short-term rentals in the state as it looks to tackle the ongoing crisis around the lack of affordable housing.

This week, Kiama Deputy Mayor Imogen Draisma stated to The Illawarra Mercury on 23 November 2023 that there was a conflict between the DA for Loves Bay and what the actual intended purpose was.

A Kiama Council spokesperson said this was the Deputy Mayor’s personal view not that of Council. Deputy Mayor Draisma was one of the four councillors that voted against approving the Loves Bay DA in November 2022.

NSW Treasurer Daniel Mookhey confirmed on 12 November 2023 that the state government will review the short-term rental accommodation by the end of year after identifying 90,000 homes, including short-term rentals and holiday houses, that could be freed up for the long-term rental market. A Kiama Council spokesperson said Mayor Reilly welcomes the review.

The prior week, National Shelter and consultancy SGS Economics & Planning released a report that found that 5.46 per cent of all homes in the Kiama LGA are short-term or holiday rentals, one of the highest proportions in the state. The report also said that rental prices in Kiama and Gerringong are considered “severely unaffordable.”

It’s worth noting that Councils across NSW, including Kiama Council, are under increasing pressure from the state government to speed up the approval process for DAs to help combat the housing shortage. Councils have 40 days to assess a DA, or 60 days for designated or integrated development where an approval body is required. 

Failing to approve a DA within this timeframe means the DA is entered into a deemed refusal period, where the applicant can then choose to seek a determination at the Land and Environment Courts. Councils risk expensive and protracted litigation in the Land and Environment Court if they don’t meet this deadline making it even more difficult to allocate resources to reviewing other DAs.

The President of Local Government NSW Darriea Turley stated earlier this month that NSW Councils approve 97 per cent of all DAs, with 103,460 DAs approved in the two most recent financial years, but only 83,419 construction certificates were lodged.

Kiama Council stated in its annual report for the 2022-23 financial year that DA timeframes are currently delayed due to staff resourcing, and that further work was needed to improve DA determination timeframes. Kiama Council incurred $1.7 million in legal expenses in the 2022-23 financial year related to legal proceedings, including $1.2 million relating to the tender process for the old Mitre 10 building that ran in 2022.

During the same interview with Kiama Community Radio, host Bernie Hems and Mayor Reilly discussed an article from The Bugle from 15 November 2023. The developer behind the Loves Bay property attempted to obstruct an ICAC investigation into her previous company for bribes it paid to the Mayor of Canada Bay, Angelo Tsirekas. Mr Tsirekas has since stood down as Mayor of Canada Bay.

Commenting on the article, Mayor Reilly said: “This was picked up by our local Bugle newspaper, who felt that because Canada Bay and the loss of a mayor and a corrupt developer, it must have happened the same here in Kiama, I think they put that on me.”

The Bugle made no such connection between Mayor Reilly and Mr Tsirekas in its reporting. The article in question did not actually mention Mayor Reilly at all. 

You can read the full article here.

This article was updated at 11:51AM 30 November to correct information about Kiama Council's legal proceedings related to the tender process for the old Mitre 10 building. We apologise for the error.