Melbourne's hotel industry has called on the state government to intervene to stop houses and apartment buildings becoming quasi-hotels.
A parliamentary committee hearing into proposed changes to the Owners Corporation Act has heard that a lack of legislation around short-stay accommodation, including Airbnb, meant Docklands "party houses" were colliding with retirees seeking quiet enjoyment.
The Environment and Planning Committee is inquiring into the impact of short-stay rentals on families, residents, apartment owners and owners corporations, as well as the adequacy of owners corp rules to deal with that impact.
The Australian Hotels Association told the hearing that government intervention was required to discourage residential lots from becoming quasi-hotels.
"It is jeopardising our regulated space," chief executive Paddy O'Sullivan said.
He expressed concerns around consumer protections in unregulated facilities, referring to food and fire safety, liquor licensing, public liability insurance, disability access and taxation.
"Bad behaviour in hotels can be dealt with on the spot," he said. "In unregulated accommodation space, liquor and EPA laws don't apply.
"The lines are blurred here and it requires clarification."
The Holiday Rental Industry Association has opposed the government's legislation, labelling it draconian and unfair.
Director Trevor Atherton said the bill made innocent owners liable for the sins of their guests and suggested the changes be set aside for two years to make way for a self-regulatory code of conduct to be promoted and implemented.
"Make the culprit pay, throw the book at the misbehaving person," Mr Atherton submitted.
Under his proposal, an established complaint would trigger a delisting of the property on Stayz, but it he conceded that Airbnb did not subscribe to the code.
The HRIA used the example of Flinders Wharf, a building of 300 residents, where up to 74 are short-term accommodation and 14 are Airbnb apartments.
The association trialled brochure distribution about the code of conduct as part of a process of education from December 16, a key high period of disturbance, and found no adverse complaints.
But Greens MP Collen Hartland said there had never been complaints at that building beforehand.
Ms Hartland said though she had attended several community meetings in Docklands, where for years there had been horrendous stories of short term leases affecting other residents, she had never heard of a self-regulatory scheme that worked in favour of other community members.
The committee will prepare a report for the upper house. The hearings continue.
