Housing crisis prompts council action on short-stays

The City of Melbourne is the latest Victorian local council to look to do what it can to mitigate the growing number of short-stay apartments in its municipality.

At their August 29 council meeting, councillors voted in favour of introducing an annual registration fee per property and a day-per-year cap per property after adopting a policy position that recognised a "need to track and regulate the short-term rental accommodation industry to relieve a tight housing rental market by increasing the availability of housing being used for longer term homes for people".

Council management will begin a consultation process with the community and stakeholders to inform the draft local law with a report to come back to council in November.

The City of Melbourne is home to one of the biggest short-term rental markets in Australia, with more than 4100 active short-term rental listings representing around 14 per cent of the city’s residential properties.

The overwhelming majority of these properties (84 per cent) are located in the CBD, Docklands, Southbank and Carlton.

With the motion endorsed by councillors on August 29, the council says it will consult extensively with the community and key stakeholders. Any new regulation would not be introduced until February 2024.

Options under consideration include a registration fee and a cap on the number of days a property is available for short-term rental – options Lord Mayor Sally Capp represented an “important step to address the housing crisis and increase the number of homes available to our residents, students and key workers”.

“We are in a housing crisis,” Cr Capp said. “Every home that becomes available matters. That’s why we’re looking to encourage property owners to move into the long-term rental market.”

“As Australia’s fastest growing city, we are considering all options that will deliver more housing – and the quickest way to do that is to utilise housing that is already in place.”

Based on benchmarking from other capital cities and municipalities, an annual registration fee for short-term rental properties may be set at $350, and a short-term rental cap may be set at 180 days.

If successful, the City of Melbourne would join the Bass Coast and Warnambool Shires, as well as Frankston and Mornington Peninsula Councils to introduce such measures as an annual registration fee.

Other metropolitan councils including City of Port Phillip and City of Yarra are also currently investigating options to deal with short-stays.

A Docklands Representative Group (DRG) spokesperson told Docklands News that “while it was pleasing to see action finally” from the council on short-stays, it was “somewhat disappointing that their motivation is only upon increasing available housing rather than the wellbeing of impacted residents”.

“In terms of the proposed actions, the DRG believes the registration component is key and must be more than a simple listing.”

“Registration needs to check if the operator has the required insurance, that they have processes and procedures in place including 24-hour responsible contact and that they have informed relevant bodies, including the owners’ corporation (if they are operating in an apartment).”

“Of course, action is still required at state government level which empowers owners and residents to a have a real say in how their residences are able to be used.”

As reported by sibling publication Southbank News in August, the state government is currently considering a $5 tourism levy on short-stay accommodation, but the Victorian Tourism Industry Council (VTIC) and some local business groups have argued the proposal would be a major impediment to the sector’s post-pandemic recovery, while doing little to solve the housing crisis.

New South Wales already implements a 180-night cap on properties being used as short-term accommodation in Sydney and a number of tourist regional areas, while governments around the world have already introduced nightly caps, registrations or other licensing.

With housing primarily the responsibility of state and federal governments, a meeting of National Cabinet was held in Brisbane on August 16 where a new ambitious target of 1.2 million new homes over five years from July 1, 2024 was set.

The housing crisis has prompted what could result in the biggest planning reforms in Victoria in decades in order to pave the way for more homes to be built across the state, with the Property Council pushing the government to bypass local councils to fast-track planning approvals. •