Home owners who rent their properties out through Airbnb and other short-stay accommodation platforms should have to pay higher council rates, Hobart's Deputy Lord Mayor says.
A motion proposed by Cr Helen Burnet, set to be voted on at tonight's council meeting, would see an urgent report prepared to determine whether specific council rates should be applied to whole house visitor accommodation, and vacant land zoned as residential.
Cr Burnet said introducing different levels of council rates depending on the property's use could help to ease Hobart's rental crisis.
"We know that Hobart has one of the tightest residential rental availability problems in Australia and we know that rental affordability and even housing affordability is sky rocketing, just making it so much more difficult for people to not only settle in Hobart but remain in Hobart," she said.
According to council statistics, 481 houses have been approved for use as visitor accommodation, with 41 granted approval in the six months to December 31 last year.
The most visitor accommodation properties are in Sandy Bay (129), with 84 in Hobart and 50 in Battery Point.
"There aren't many levers that the City of Hobart can use [to encourage affordable rentals] but we can look at differential rates, not only for short-stay visitor accommodation but also for pieces of land that are zoned residential but have been sitting vacant without houses on them," Cr Burnet said.
For Cr Burnet's proposal to take effect, the state's valuer-general would also have to establish a specific category for short-stay visitor accommodation, so differential rates could be applied.
"I know that the Break O'Day Council has a motion to [the Local Government Association of Tasmania] to lobby for that change because they too have the same sort of problems with having rental properties available for people to live in their municipality, so it's not just an isolated problem to Hobart," Cr Burnet said.
Are short-stay properties 'commercial'?
Tourism Industry Council of Tasmania chief executive Luke Martin said the change could occur without altering the rating system by simply zoning short-stay accommodation as commercial properties, rather than residential.
"The reality is Hobart and most councils apply commercial rates now to commercial accommodation businesses and clearly if you are operating a short-stay accommodation business, irrespective of what platform you're using to sell your room, you should be paying the same as everyone else in the market," he said.
"And that's been a long-term frustration of the industry, we've already got accommodation businesses which are working five minutes down the road that are paying commercial rates which are by their nature higher than residential rates.
Airbnb's Australian manager Susan Wheeldon said short-term accommodation made up less than one per cent of Hobart's total housing stock, and imposing differential rates would put financial pressure on those who rented out their home to "help make ends meet".
"Airbnb welcomes the opportunity to work constructively with the council towards common-sense regulatory initiatives backed by sound evidence."
Short-stay holiday rental provider Stayz's corporate affairs director, Eacham Curry, said he understood the council wanting to take a closer look into variable rates, but urged it to study a Commonwealth inquiry into housing affordability and supply before taking any action.
He warned against making short-stay accommodation providers pay commercial rates.
"We caution against taking a blanket approach to these things," he said.
"We welcome a conversation where the short-term rental sector has a contribution to make towards the cost of administering things, particularly local government, but I'm not sure a blanket determination that it's commercial is the solution."
Proposal won't mean more rental stock
Tasmanian Residential Rental Property Owners Association president Louise Elliot, who rents out a short-stay property, said the proposal would not result in more properties being available for rent.
"People go into short stay for a range of reasons, the flexibility, the comfort in knowing your property's being looked after and also because you don't have the risk of getting a bad tenant and what comes with that," she said.
"So an increase in rates, a 10 or 15 or 20 per cent increase won't push short-stay properties back to the long term market, it won't achieve that objective."
Ms Elliot said short-stay accommodation had been unfairly blamed for a shortage of accommodation in the city.
"We've seen over months and years now short-stay being targeted as the devil, not recognising the benefits that come from distributing the tourism benefits out into the community, the employment, trade, that sort of thing," she said.
Vacant land targeted for higher tax
In the council's response to the motion, it said owners of vacant properties had "little incentive" to develop the land under the current rating system as they did not pay the Waste Management Service Charge or contribute to the Landfill Rehabilitation Levy.
It said looking into rates applied to vacant residential land, which is taxed at higher rates by some Australian councils, should form part of the council's review of its rating and valuation strategy, which is currently underway.
Last year, the council voted to consider prohibiting whole homes being converted into short-stay accommodation in certain areas.
The vote was criticised by Stayz, who said the regulation would damage the state's tourism capacity.
