Submission on Short Stay Accommodation — Proposed Amendments to the Hobart Interim Planning Scheme

Short Stay Accommodation - Proposed Amendments to the Hobart Interim Planning Scheme May 2022

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About TasCOSS TasCOSS’s vision is for one Tasmania, free of poverty and inequality where everyone has the same opportunity. Our mission is two-fold: to act as the peak body for the community services industry in Tasmania; and to challenge and change the systems, attitudes and behaviours that create poverty, inequality and exclusion.

Our membership includes individuals and organisations active in the provision of community services to Tasmanians on low incomes or living in vulnerable circumstances. TasCOSS represents the interests of our members and their service users to government, regulators, the media and the public. Through our advocacy and policy development, we draw attention to the causes of poverty and disadvantage, and promote the adoption of effective solutions to address these issues.

Please direct any enquiries about this submission to: Adrienne Picone Chief Executive Officer Phone Number: (03) 6231 0755 Email Address: adrienne@tascoss.org.au

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Introduction

TasCOSS welcomes the opportunity to make a submission on the amendment to the Hobart Interim Planning Scheme 2015. Housing is a human right, but rents are rising so thousands of Tasmanians are experiencing housing financial stress, forcing them to choose between a roof over their heads and paying for other essentials such as food and healthcare as well as leading to tenuous tenancies. At the same time the wait list for public housing is growing and specialist homelessness support services are unable to meet increasing numbers of requests for help. 1 In such a tight market, every home counts. TasCOSS therefore supports the amendment to the Hobart City Council Interim Planning Scheme proposed by Hobart City Council to limit new visitor accommodation involving entire dwellings in specified areas of Hobart. 2 Importantly, the changes would have no effect on existing short stay visitor accommodation, and will not affect people who are sharing their own home. The changes apply only to entire investment properties being newly listed for visitor accommodation and so are a limited and reasonable restriction on the uses to which individual properties might be put.

Key Issues Australia’s housing system is complex, partly due to all three levels of government having some role in the system, and the current housing crisis has multiple drivers including population growth, changing housing need, a retirement income system built upon homeownership, and tax concessions that reward investment in housing as an income- and wealth-generator instead of as essential social infrastructure that provides the foundation for a good life. In this context we need to look at every lever, in every level of government, to give every chance for all Tasmanians to have an affordable and stable roof over their heads.

That is why in recent years TasCOSS, along with Tasmania’s housing and homelessness peak body Shelter Tasmania and a wide range of other organisations, have argued for the need to place restrictions on short stay accommodation particularly in areas of the state with low rental vacancy rates and high demand for affordable housing. As the level of government closest to communities, we believe councils are well placed to assess and respond to key social and economic challenges in their local government areas.

Take for example the Hobart local government area, which is experiencing an entrenched crisis of affordability and availability: • The density of short stay accommodation in Hobart is the highest of any capital city in Australia, and one of the highest in the world. 3 • Vacancy rates in Hobart’s private rental market are persistently below 1%, when a sustainable vacancy rate is 2.5-3%.

Communities Tasmania - Reporting; ST_FACT-SHEET_Homelessness-updatedJune2021.pdf (sheltertas.org.au) SKM_C360i22032916020 (hobartcity.com.au) 3 Peter Phibbs, presentation to Hobart City Council, 4 December 2021 1 2

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The December 2021 Rental Affordability Index showed that Hobart is still the least affordable capital in Australia.

The December 2020 AHURI report Marginal housing during COVID-19 shows the clear impact of short stay accommodation on Hobart’s vacancy rates.

Hobart and indeed Tasmania is not the first to place restrictions on short stay accommodation to prioritise affordable housing for residents and there are already controls on visitor accommodation in Battery Point, the Wapping area of Sullivans Cove and on Flinders Island. 4 Many other cities around the world have introduced various restrictions including caps on visitor nights, banning whole home listings, using zoning laws to prohibit short stay activity in certain areas, as well as taxes and fees designed to reduce short stay activity, with growing evidence that regulatory interventions are effective. 5 As well as likely adding to the supply of private rental properties, there is evidence that this can also result in lower rents. A 2021 analysis of the impact of short stay accommodation on rents in Tasmania conducted by housing researcher Dr Peter Phibbs suggests a direct relationship between a reduction of short stay accommodation and a decrease in rent, presumably because the short stay properties were added to the longer term rental market, adding to supply and thereby putting downward pressure on prices. 6 This echoes research by the Reserve Bank of Australia that the dominant influence on real rents is the vacancy rate. 7 The dire need for housing is Tasmania-wide and TasCOSS hopes that by establishing this planning amendment in the Hobart LGA, other local governments will take similar action where high levels of entire home visitor accommodation are impacting the long term rental market both in terms of supply and rising rents.

Conclusion The impact of rising house prices, demand outstripping supply for private rentals as well as social housing, and rising cost of living pressures means life is increasingly precarious for thousands of Tasmanians. We need to do all we can to ease these pressures, starting with ensuing all Tasmanians have a safe and affordable place to live. One small lever at our disposal – restricting the number of whole homes being transferred from the private rental market to the short stay accommodation sector – is a limited and reasonable response to what is a crisis for an increasing number of Tasmanians. Every home counts.

Planning-Directive-No.6-Exemption-and-Standards-for-Visitor-Accommodation-in-Planning-Schemes-as-modified-1-August2018.pdf (planningreform.tas.gov.au) 5 UTAS-ISC-Insight-Eight-Regulating-Short-Stay-Accommodation.pdf pp.8-10.

6 Peter Phibbs, presentation to Hobart City Council, 4 December 2021 7 A Model of the Australian Housing Market (rba.gov.au), p. 17 4

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