Wednesday, May 25, 2022

The Docklands own Watergate scandal rages on

Docklands own watergate

Veteran American journalist Bob Woodward once said: “We’re not going to have another Watergate in our lifetime.  I’m sure.”

He was, of course, referring to the 1970s American political scandal that ultimately brought down President Nixon.  Woodward couldn’t possibly have predicted that, four decades later, it would be a twin apartment tower building in one of Melbourne’s most prestigious inner-city precincts, the Docklands, that would be in the news so much.

The 18-storey Watergate apartment towers were built by powerful Melbourne property developer Morry Schwartz between Collins and Bourke Streets.

And they hit the headlines in a big way some years ago, when the Watergate’s owners corporation tried to ban apartment owners from using short-stay websites like Airbnb, HomeAway, Travelling Frogs and others to boost their income.

The saga ended in the Victorian Civil and Administrative Tribunal, with the Watergate’s manager seeking a court order against owners trying to rent out their apartments for under 30 days at a time.

The Tribunal did not see it the owner corporation’s way, arguing that laws as they exist do not support an Airbnb ban.

Just last week, the issue of trying to regulate Airbnb-style ‘short stays’ sent a shockwave through the NSW government, when backbenchers staged a revolt that halted proposed regulation less than an hour before it was set to be announced.

Various ‘impacts’ of Airbnb-style stays

Indeed, Airbnb is a big topic of conversation anywhere in Australia where apartment living is on the rise.  Undoubtedly, Airbnb-style stays boost the economy and the industry, but there are what the NSW government describes as “social and environmental impacts”.

In other words, while many apartment owners love the Airbnb boost, owner corporations are concerned that short-stays are turning apartment buildings into ‘party houses’.  Indeed, the Watergate has even be referred to as ‘Partygate’.

Airbnb parties can be loud, revellers unruly and damage to common property extensive.

And the Tribunal decision in 2015 left owner corporations with little power to do much about it all.

In the spotlight was a company called Docklands Executive Apartments, run by a couple of Watergate residents called Paul Salter and Belinda Balcombe.  They own 11 apartments that are up for grabs for ‘short stays’.  “Docklands Executive Apartments is not a hotel,” the website states.  “There is no reception, however we live here, which means you have a 24/7 personal host at your service to look after you”.

Mr Salter argues that over 10,000 bookings later, his guests cause no more problems than the average long-term tenant.  “Some of the fears people have are probably a bit old-fashioned,” he says.

Other Watergate residents do not agree, with the owners corporation saying 90% of them want short-term letting to stop.

‘Short stays’ have exploded in Melbourne

Airbnb-style hosting has absolutely exploded in Melbourne, which is now in the top 20 worldwide for short stays.  It means the Victorian government is now looking into statewide legislation to stamp it out, while the City of Melbourne is considering changing zoning laws.

It’s been tested at the Building Appeals Board, the Court of Appeal and the Supreme Court, but still Airbnb reigns in Melbourne.

Angry owners responded by banding together to fight back – the Watergate owners corporation alone spending over half a million in legal costs to enforce rules such as a 30-day minimum stay.

“We want to reclaim our building,” Barbara Francis, head of the Watergate corporation, said.  “We live here.”

‘We live here’ is exactly what she called a new lobby group whose aim is to unite voices at Watergate with others in Melbourne, Victoria and beyond.  IBIS World (February 2018) reports that nearly 750 businesses just like Docklands Executive Apartments operate across Australia, turning over $3 billion.

‘We Live Here’ not appreciated by all

But ‘We Live Here’ was not universally appreciated.  One apartment owner, Anton Sare, took the owners corporation to the Victorian Civil and Administrative Tribunal last month, alleging that because We Live Here is headed by the owners corporation chairperson, it’s a major conflict of interest.

Mr Sare also says the Watergate’s security is run by a company linked to the owners corporation, meaning money from that contract could be flowing into the anti-short stays We Live Here movement.

The Tribunal rejected the conflict of interest accusations.

“There is nothing here that indicates what the activities of that movement are which would constitute conflict,” Tribunal member Hugh Davies said.

At the same time, Salter’s Watergate-based business also continues to have its victories.  After Supreme Court hearings in late 2016, the owners corporation had to pay him over $130,000 in legal costs.

But the opposition is having an effect anyway.  Short stays in the Watergate are down, and the 11 Docklands Executive Apartments are essentially the only Airbnb-style options in the building – down from a 2011 high of 42.

The Docklands own Watergate scandal rages on.

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