The City of Sydney council is investigating how short-term rentals, like Airbnb, could be banned during periods of low vacancy rates.
The council passed a motion on Tuesday to task the chief executive with investigating 'opportunities' to ban short-term rentals.
NSW already imposes a 180-day per year cap on short term rentals in some areas, including Greater Sydney, but the council is investigating whether a more targeted ban is needed to boost housing availability.
The investigation will look at Millers Point, The Rocks, Darlinghurst, Woolloomooloo, Ultimo, Haymarket, Kings Cross, Surry Hills, Potts Point, Chippendale and Pyrmont.
Other suburbs could also be pulled into the inquiry if they have ongoing issues with low long-term rental vacancy rates, Newswire reported.
City of Sydney also requested more information on how long the bans should be imposed for and what would trigger a ban, like vacancy falling below three per cent.
'The proliferation of the short-term rental sector was having a negative impact on inner-Sydney neighbourhoods in terms of community connectivity, social cohesion and housing affordability,' the councillors noted.
'The NSW Government, and the City of Sydney, have a responsibility to take greater action, wherever possible, to address this issue.'
The City of Sydney council is investigating the introduction of temporary bans on short-term rentals in suburbs with low vacancy rates
The investigation will look at Millers Point, The Rocks, Darlinghurst, Woolloomooloo, Ultimo, Haymarket, Kings Cross, Surry Hills (above), Potts Point, Chippendale and Pyrmont
Popular short-term rental platform Stayz in a statement said existing state regulations were enough to minimise the effects on vacancy rates.
'Stayz urges the City of Sydney to refrain from implementing bans, day or night caps, limits on guest numbers, or day fees,' government and corporate affairs director Eacham Curry said.
'These measures do not address current housing concerns and could jeopardise the value that the short-term rental accommodation sector brings to local communities and their economies.'
He added regulation at the council level 'can create unnecessary complexity for guests, homeowners, and the community'.
'Local regulation increases costs, time, and resources, deterring the economic benefits,' he said.
Several council have already taken local action to limit short-term accommodation, including Byron Bay which introduced a 60-day cap in late 2024.
Daily Mail has contacted Airbnb for comment.
The City of Sydney began investigating the effects of short-term rentals in May 2023.
The investigation will consider the effects of short-term rentals on vacancy rates and housing affordability
At that time, councillors requested staff investigate how the holiday accommodations impacted the affordability of housing and benefits to tourism.
Premier Chris Minns on Tuesday said he wants to 'understand the concurrent impacts on the tourism sector'.
'We've taken steps in some areas - in coastal towns where there's a big homelessness issue or there's just a complete lack of housing - to intervene but they've been extraordinary interventions,' he said.