The Victorian government will consider introducing rent caps and new taxes on owners of Airbnbs and vacant properties to help ease pressure on renters, under a deal struck with the Greens in exchange for their support for the state budget.
Before the last sitting of state parliament before the winter break, the Greens will announce their support for the budget, which includes tax increases for big business, property investors and private schools to pay off the state’s Covid-19 borrowings.
In exchange, a taskforce led by deputy premier Jacinta Allan, which is currently examining measures to boost housing supply, will consider renter safeguards the Greens have been campaigning for.
This includes “rent caps or other forms of rent control”, “regulation or taxation” of the short-stay industry and “improvements” to the state’s vacancy tax, according to a letter sent to the Greens by the treasurer, Tim Pallas, and seen by Guardian Australia.
Pallas has also committed to meeting with the Greens each month to discuss the crisis and possible solutions to help fix it.
Guardian Australia understands the government has also secured the support of the remaining progressive crossbenchers – Georgie Purcell from the Animal Justice party and the two Legalise Cannabis MPs – meaning the bill should pass parliament by the end of the week.
It follows weeks of negotiations between the Greens and Labor, during which the minor party had lambasted the government for failing to support renters during the housing affordability crisis.
The Greens leader, Samantha Ratnam, said the party would continue to pressure the government to implement the proposals, as well a two-year rent freeze.
“This is just the beginning of us pushing them to go further and faster to address the rental crisis and address the housing affordability crisis more broadly,” she said.
“We’re not easing up on that pressure any time soon. In fact, given how much worse the housing crisis is getting day by day, we’re going to be increasing our pressure on the government to act as a matter of urgency.”
It comes as an inner-city Melbourne council on Monday night became the first in the state to create an emergency fund for those struggling with the cost-of-living crisis.
From 1 July, people living in Yarra city council experiencing rental stress will be able to access a pool of $100,000.
At Monday’s meeting, councillor Stephen Jolly moved an amendment to ensure funds would be allocated specifically for young renters in the area, which takes in the suburbs of Abbotsford, Collingwood, Fitzroy and Richmond, but this was voted down.
Instead, the fund will take in all concession card holders who live in the council, as well as homelessness support services. Jolly said this could equate to about “30-50%” less assistance for young people but was hopeful other inner-city councils would follow suit.
“It’s a start, even though I’m disappointed the Greens watered it down,” Jolly told Guardian Australia. “Direct wealth distribution is rare in Australian politics, so this is hopefully a new trend that other councils will follow.”
(1/4) It was two steps forward, one step back for Yarra's struggling renters tonight as Council voted on its 23/24 budget.
— Stephen Jolly (@stephenjolly99) June 19, 2023
My $100,000 assistance for those young people suffering rental stress was reduced by the Greens & their allies by an indeterminate amount - probably 30-50%.
The council is examining whether it can impose an Airbnb tax on owners in the area. According to the open-source database Inside Airbnb, there were 1,608 properties available in the city of Yarra on Airbnb in March this year.
Jolly said he was hopeful any revenue derived from such a tax would go directly into the fund announced on Monday.
Pressure is also growing within Labor’s ranks to address the housing crisis. The party’s state conference at the weekend unanimously passed motions to make housing a human right, introduce a mandatory inclusionary zoning scheme and provide affordable housing for young people.
Another motion to introduce a cap on the number of nights each year an owner can rent out a property as short stay accommodation also passed. The motions are non-binding but play an important role in guiding Labor policy.
A government spokesperson said it was working to deliver a pipeline of more housing via its $5.3bn “big housing build” and build-to-rent incentives but acknowledged more needs to be done.
“Whether it’s housing supply, first homebuyer affordability, public housing or renters’ rights – we know the housing system needs reform,” they said.
“We’re working hard on a package of reforms that will come later in the year, and we will have more to say in due course.”
