Moving out for visitor accommodation

January 2020

Like many cities around the world that are popular with tourists, Hobart decision-makers are having to confront the challenge that long term housing is being replaced by tourist accommodation.

Tasmania’s Tenants Union estimates say that 995 out of 25,000 rentals in Greater Hobart are used for short stay visitor accommodation, which is 4% of the total stock.

While this seems like a manageable number, the City of Hobart Council area, with its attractive inner city suburbs, is under the greatest pressure.

University of Tasmania (UTAS) housing experts have found that 57% of visitor accommodation listings are in this part of Hobart, even though we only have 28% of rental properties in the Greater Hobart area.

The problem is not with properties where a host is just renting out a room or two in their home to tourists or renting out their home while they are on an annual holiday.

This traditional home-sharing arrangement is extremely positive and provides new accommodation that was probably never available as long term rental.

After taking these properties out of the debate, UTAS estimate that in our inner city suburbs, at least 400 properties have been converted from long-term private rental properties to short-stay visitor accommodation since 2016.

This is a huge number of properties to lose and amounts to a large number of residents that can no longer live in the inner city of Hobart.

There is a clear need for governments to play a role in balancing private and public interests, and that development accommodates the residents of the city.

However, the State Government’s regulation of visitor accommodation provides no opportunity for Councils to tweak the rules to respond to local circumstances or to fund extra compliance staff that might help us police the regulations.

The main regulation that the State Government requires is for some visitor accommodation operators to get a permit, but only some, such as those who are renting out more than 4 bedrooms or a property that is not their primary place of residence.

Council can’t refuse to provide a permit unless:

  • it is in Battery Point and is a self-contained visitor accommodation (ie. an empty house used solely for this purpose).
  • it is in an apartment building and visitor accommodation is considered to cause an unreasonable loss of amenity to long term residents in the building.
  • The visitor accommodation is larger than 200m2 and is considered to cause an unreasonable loss of residential amenity.

But there are many loopholes to get around even these rules. For example, if someone wants to claim that they are simply renting out their primary place of residence, while they are ‘temporarily absent’, they are exempt from needing a permit, even if they rent out the place for 10 or 11 months a year.

This is even the case in Battery Point, where Council lobbied to put stronger rules in place. If the owner claims that they’re ‘temporarily absent’ or ‘on holiday’ they are exempt and can rent out the house without a permit. There are no definitions of what ‘temporarily absent’ means in the law.

On the other hand, NSW is about to bring in even stronger regulations that are supported by AirBnB. Short-term letting will be allowable for 365 days a year, as long as the host is present. If the host does not live at the property, short-term letting will be limited to 180 days in Greater Sydney. In the tourist town of Byron Bay it will be limited to 90 days. This provides some incentive to rent out a property as a long term rental rather than as visitor accommodation

At this stage the City of Hobart is expecting the State Government will provide us and the public with new data on both the number of residences with a permit and the number who claim they are exempt from needing one.

But this information alone isn’t likely to change much. Our Council does not have the staff resources to do a proactive audit if people who say they are exempt from needing a permit actually are.

The State Government didn’t include any consideration of how Councils would fund the monitoring and implementation of this permit system, which makes it a weak self-regulatory system.

Visitor accommodation is an important part of the economy but the city’s housing market is now out of balance in favour of short stays.

For the sake of our renters, the State Government needs to consider stronger regulation like the rules being implemented in NSW or other cities around the world.