2021-10-12 P&E Agenda - Item 2 - Attachment 6 - Cost Benefit Analysis

COST BENEFIT ASSESSMENT – PROPOSED LOCAL LAW AMENDMENT: SHORT STAY
LETTING & HOME HOSTED ACCOMMODATION

Table E.1. Quantitative Assessment – All Impacts Irrespective of Location
All Impacts                                Discount Rate
Impact                            0%          4%             7%        10%
Costs
Council Administration   $     13.0    $     7.9    $       5.9   $     4.6
Property Management      $    183.6    $   110.1    $      81.3   $    63.5
Total Costs              $    196.6    $   117.9    $      87.1   $    68.1
Benefits
Health and Amenity       $    286.9    $   172.0    $   127.0     $    99.2
Total Benefits           $    286.9    $   172.0    $   127.0     $    99.2
Net Present Value        $     90.2    $    54.1    $    39.8     $    31.1
Benefit Cost Ratio             1.46         1.46         1.46          1.46
Source: AEC.

When considering impacts only within Queensland, the value of identified benefits exceeds the value of identified
costs by an even greater extent.

Table E.2. Quantitative Assessment – All Impacts in Queensland
Queensland Impacts                         Discount Rate
Impact                            0%          4%             7%        10%
Costs
Council Administration   $      6.4    $     3.8    $       2.9   $     2.3
Property Management      $     26.5    $    15.9    $      11.7   $     9.1
Total Costs              $     32.8    $    19.7    $      14.6   $    11.4
Benefits
Health and Amenity       $    286.9    $   172.0    $   127.0     $    99.2
Total Benefits           $    286.9    $   172.0    $   127.0     $    99.2
Net Present Value        $    254.0    $   152.3    $   112.4     $    87.7
Benefit Cost Ratio             8.73         8.72         8.71          8.68
Source: AEC.

When considering impacts only within Noosa Shire, the value of identified benefits exceeds the value of identified
costs by an enormous margin.

Table E.3. Quantitative Assessment – All Impacts in Noosa Shire
Noosa Impacts                              Discount Rate
Impact                            0%          4%             7%        10%
Costs
Council Administration   $       1.8   $      1.1   $       0.8   $     0.7
Property Management      $       7.6   $      4.5   $       3.3   $     2.6
Total Costs              $       9.4   $      5.6   $       4.2   $     3.3
Benefits
Health and Amenity       $    286.9    $   172.0    $   127.0     $    99.2
Total Benefits           $    286.9    $   172.0    $   127.0     $    99.2
Net Present Value        $    277.5    $   166.3    $   122.8     $    95.9
Benefit Cost Ratio            30.57        30.54        30.47         30.38
Source: AEC.

Based on the assumptions underpinning the cost benefit analysis, the quantitative assessment highlights that the
benefits associated with the proposed local law significantly outweigh the costs associated with the proposed local
law. Short stay accommodation operators – 86% of which are located outside of Noosa Shire and 51% of which
are located outside of Queensland – are currently receiving commercial benefits at a significant cost to local
resident health and residential amenity.

In addition to the quantitative outcomes, it is also envisaged that the proposed local law would result in the following
qualitative benefits:

•   An enhanced feeling of safety and security for residents in their homes.

•   The creation of additional local employment through the requirement to have a local contact person on call for
    all short stay accommodation premises.




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