A perfect world where one size fits all

Step up to fix the downside of a booming capital, says Richard Eccleston

NO longer an economic basket case, Tasmania is now arguably one of the most liveable places in Australia. That more people are moving to Tasmania is a good thing for the economic and social fabric of our state. But we need to work together as a community to ensure this growth does not cost us the very things that are attracting people here in the first place.

Affordable, secure and suitable housing is the foundation of community wellbeing and economic prosperity. By and large, Tasmanians have fared better than our interstate counterparts, who look enviously at the relative affordability of our housing.

However, something has clearly shifted in the past 18 months. Hobart in particular is suffering an acute shortage of suitable residential rental accommodation. The current vacancy rate is estimated at 0.3 per cent, a historic low. To put this in context, a vacancy rate of below 1 per cent is considered a market failure and is likely to result in an increase in homelessness and deter migration.

Last winter Tasmania’s population growth rate hit its highest level since the mid2000s and greater Hobart’s population has increased by approximately 3500 over the past 18 months. This is a good thing, but needs to be managed. My colleagues at the Institute for the Study of Social Change estimate the housing supply shortage in the greater Hobart market equates to approximately 1400 dwellings.

The overall housing challenge confronting greater Hobart in particular is complex and requires a collaborative long-term approach. We therefore commend the State Government for calling today’s housing summit.

It is important to acknowledge that the University of Tasmania has contributed to this situation, as more students from across Australia and around the world have come to study in Hobart. Many of these young people stay on after their studies, or return with family. Again, this is a good thing, but again, it requires a response. The university has made significant investments in accommodation, but needs to — and will — do more.

As we are seeing in the news pages of this paper, the immediate problem in Hobart is a lack of suitable homes for families to rent. As winter draws nearer an emergency response is required. Options such as fit-for-use demountable housing on public land and vouchers for hotel/motel/short-term holiday accommodation should be considered. We should also consider strategies to use existing homes more efficiently, such as incentives for long-term home sharing and encouraging those who no longer need large homes to downsize.

A priority of the summit must be to understand the causes of this immediate problem. Is it because the supply of properties has not kept pace with population growth? Is it because rental housing has been used for other purposes such as holiday lets?

If a short-term goal is to increase the number of existing properties available to rent, the government should consider providing incentives for owners to make their vacant properties or holiday homes available for long-term rent. Evidence suggests vacancy taxes are difficult to administer and a more productive approach would be direct financial incentives to owners who rent out previously vacant or short-let homes long-term.

We also should consider targeted regulations to temporarily limit the growth of Airbnb in key inner-city markets. One model that has the potential to strike the right balance is to postpone new approvals for entire properties for short-term holiday accommodation in areas experiencing rental shortages. This “pause strategy” would not impact on regional areas relying on the tourist dollar nor would it apply to hosts with existing accommodation businesses and approvals, or those who rent out rooms or part of their homes.

New short-stay approvals could resume once housing

supply increases and the balance again tips in favour of those requiring secure longterm rental accommodation.

Data from Airbnb and other home share platforms highlights a high degree of turnover and host fatigue, which indicates that over time, holiday lets may be returned to the residential housing pool. This process would accelerate with targeted incentives.

In the longer term we need a carefully planned, farsighted strategy to ensure housing supply meets anticipated population growth. One-off tax cuts and short-term grants might be popular, but there is little evidence they deliver meaningful outcomes.

Many cities have experienced and solved the growing pains Hobart is now going through and we can look to the best models interstate and abroad to facilitate state, community and private investment in our future housing needs.

New housing must be affordable, fit for purpose and well served by key infrastructure, services and employment to ensure all Tasmanians can enjoy the enviable lifestyle on offer in this state. Above all, future housing investment must enhance the liveability and productivity of Hobart. Collaborative future-focused housing solutions should be a key element of any city deal. Professor Richard Eccleston is Director of the Institute for the Study of Social Change at the University of Tasmania. The Blueprint for Better Housing Outcomes in Tasmania and its submission to the Housing Summit are at www.utas.edu.au/social-change

Options such as demountable housing on public land and vouchers for hotel/motel/ short-term holiday accommodation should be considered