Consideration and Noting - Select Committee on Short Stay Accommodation in Tasmania - Report

November 25, 2019

[7.52 p.m.]

 

Ms ARMITAGE (Launceston) - Mr President, I move -

 

That the report of the Legislative Council Select Committee on Short Stay Accommodation in Tasmania be considered and noted.

 

I am pleased to note this report.

 

Due to the myriad of widely publicised concerns about the effect short stay accommodation schemes have caused in Tasmania's housing and rental markets, the inquiry was charged with investigating a number of issues.

 

The terms of reference involved reviewing the growth and character of the short stay accommodation market; the impacts the market had on residential housing and tourism; and what possible regulations regarding safety, planning, amenity and licencing should be recommended.  The inquiry, therefore, has been responsible for examining wide-ranging economic, social and sustainability concerns - issues which affect all Tasmanians.

 

We received 192 submissions, with 34 groups or people giving evidence at hearings held across the state.  This enabled us to gain a detailed understanding of the varying effects the short stay industry has had on different geographic regions of the state.

 

Obviously, we found there were varying and differing issues across the state.  Some of the east coast for example - places like Freycinet and St Helens - had problems finding long-term accommodation for people at holiday periods.  We were told that in some areas, like Freycinet, it was very hard for entities such as Federal Hotels, Saffire, and others to find accommodation for their workers, and many had to provide accommodation themselves.  On many occasions when people sold a long-term property, they were picked up very quickly by someone wanting the short‑term market so it was very easy to find accommodation in winter, but in summer it was much harder, which certainly makes it difficult for those wanting to live in these areas.  It changes the dynamics, too, of people living in coastal areas.

 

Through the process, the report endeavoured to reflect the diverse range of views concerning the short stay accommodation industry and the sharing economy as it relates to the Tasmanian context.

 

We had five terms of reference.  Briefly our first term of reference was the growth of the short stay accommodation in Tasmania and the changing character of the market, including the recent trends in online letting of short stay accommodation.

 

We found reliable data was not currently available on the stock of private rental properties in Tasmania.  For example, the Launceston City Council had tried on one occasion to determine how many properties there were in the short stay sector.  Obviously, at that time in order to determine where the property was, you had to rent it.  You could go online, but it became almost an impossibility to try to determine where the properties were.

 

When we had briefings from Break O'Day Council, it was much easier for them.  They had their own building surveyors; they looked at properties, and they could recognise properties, which certainly helped with a smaller local government area.  They recognised a property and said they went and knocked on doors just to determine whether it was for short-stay or what they were doing.  Some councils were very proactive.  I am sure members will remember that some really went above and beyond and also had the building surveyors.  Building surveyors are limited; there are not that many.  Break O'Day Council was very fortunate to have its own building surveyors, but I think some of the other councils had to bring people in to do that work, which certainly made it a lot harder.

 

Our second term of reference was the impact of the short stay accommodation on the residential housing sector.  In different areas it was affected differently.  In Hobart, it was certainly more severely affected than in Launceston or some of the other areas.  The east coast and some of the holiday areas were heavily affected in the summer period.  In winter it was not such an issue, but it certainly gave them some problems when it came to summer accommodation.  It was very difficult for people wanting to live in these areas because not only were they not available, but when they were available, they were very expensive.  That was one thing we discovered in some of the more popular holiday areas.

 

People were simply buying them.  Members will probably remember there was a very expensive holiday accommodation place, I think it was in the Break O'Day area, in St Helens or in that general area, Binalong Bay - I think it was Bay of Fires.  The owners had purchased it.  They were never going to live in it, or maybe a long time ago after as they had young children, but they had purchased it purely for short stay accommodation because it was a popular area and it was something they could get a return from. 

 

That was one of the things we found:  different councils had different charges.  From memory, in the Break O'Day Council the commercial rates were not any more expensive than the residential rates, whereas in many of the areas commercial rates were more expensive.  Things changed between councils.  No two councils were the same and that was one of the things I found quite interesting.  Councils determine what works for them and change matters accordingly, which was quite interesting.

 

Term of reference (3), the impact of short stay accommodation on the tourism sector, also had some quite interesting findings.  I think it was the west coast - and members will correct me - where a couple of people we spoke to said it was really hard because it was not a level playing field.  In the commercial sector, one lady had purchased a property for commercial use.  Many people in the same area had purchased homes and they were renting them out in the same market but without the overheads she had, which made it really difficult for those in the commercial sector. 

 

Basically, it was apples and apples, but they were not apples and apples when it came to costs.  Someone in the commercial sector had a property they were paying for, and down there the rates probably were more expensive for the commercial properties.  I know sewerage and water, for example, is much more expensive when you are looking at commercial aspects.  They would be paying those costs, yet someone who had purchased a property and were renting it out in the short‑stay sector did not have the same commitments.  It made it really difficult for some people who were paying a lot more when they were doing same thing - they were both hiring out to the tourism sector.

 

Mr Valentine - When you say 'commercial', you are talking about commercial bed and breakfast operations?

 

Ms ARMITAGE - Yes, sorry.

 

Mr Valentine - Not motels or hotels?

 

Ms ARMITAGE - No, commercial bed and breakfasts.  I was thinking of the lady on the west coast who had purchased - I think it was a home with three or four bedrooms - for a commercial Airbnb and was paying the commercial rates.  Whereas someone along the road who purchased a home with still two or three bedrooms was renting it out as short stay accommodation and not paying anything commercial, still going along on the residential rates. 

 

There were a lot of issues that it really was not a fair playing field for a lot of those people.

 

Our fourth term of reference was on the regulatory issues, including the customer safety, the land use planning, neighbourhood amenity and licensing conditions compared to other jurisdictions in Australia and worldwide.  That is where it was really interesting too, getting the building surveyors and also the Tasmania Fire Service to come in and finding out simple things such as the building surveyors saying that in a lot of the old homes the balustrades were lower and the glass was float glass - simple things that really needed attention before people could live there safely.  Of course, they are not things that you think of.  You do not think that in an old heritage house the balustrades are lower than they should be or that the glass will break very easily.

 

Mr Valentine - Unless you live in one.

 

Ms ARMITAGE - Unless you live in one, exactly.  One of the issues raised by both the fire service and the building surveyors was that when people come to short stay accommodation, it is not like a motel or hotel where people are onsite.  They get the key, they go in and they are on their own in most situations.  If there is a fire, they do not know how they are going to get out.

 

Many places did not have emergency lighting. Some had a sheet showing people how to get out.  Very few had emergency lighting so that if the power went off in a fire, they would not know how to get out.  It is really important that fire service issues are taken into account, as are other things like the float glass and balustrades. 

 

Simple things can be done.  The building surveyors said that something as simple as a screen or a film could be placed over the glass so that if it breaks, it does not fall and cut people to shreds.  However, they need to be done.  There need to be regulations in place to make sure that they occur.

 

The recommendations were fairly basic.  We tried to keep things very simplistic.  Our first recommendation was that an urgent review of safety standards for short term accommodation be undertaken to mitigate the risks and address inconsistencies between provider types. 

 

As I mentioned, the fire service came up with some very simple things:  they need wired-in smoke alarms; and they need battery lights so that if the power goes off, people can see the way out.  These are simple things to make things safer.  While we have not had any tragedies yet, it is not if, but when.  If we do not look at these safety issues, it will happen.

 

Our second recommendation for the state Government goes further than the requirements of the Short Stay Accommodation Act 2019 and develops comprehensive data collection and analysis programs covering both short stay accommodation and the private housing market to underpin policy and resourcing responses in relation to housing supply and demand.

 

The third recommendation says that for properties other than a principal place of residence local government authorities be provided with discretionary powers to issue permits regarding short stay accommodation.

 

This is one of the matters discussed by the committee, that the principal place of residence, the true home sharing economy, where someone has a home and they rent a room or two out, should not be affected.  Now, a house goes up for sale, particularly in a coastal or holiday area, someone buys it and all of a sudden instead of there being a long-term resident in there, it becomes a short stay.  That was where it was decided that the principal place of residence should not be affected as much as someone who buys it specifically for a short-stay.

 

The local government authorities should have a discretionary power to issue the permits regarding short stay accommodation.  Each local council area is the one that knows best what suits its area.

 

It is all very well for us to say what happens at Break O'Day or what happens at Glamorgan Spring Bay or Launceston or Hobart, but those councils are best placed to know what happens and what should actually happen in their area.

 

I often look at council advertisements in the paper.  I notice regularly, particularly in The Examiner in Launceston, it will say, 'change of use to visitor accommodation'.

 

At least twice a month, three or four will be changing to visitor accommodation.  It is becoming more of a norm. 

 

When we were talking about the platforms, we heard evidence from people about areas such as Barcelona.  These were lovely areas where people used to like to stay.  Suddenly, the only people staying in those nice little areas, such as Barcelona, were short-stay.  They have huge fines now if you are actually renting out without having a licence.

 

I think the member for Hobart might remember some of the recommendations given to us about the fines we should put on people that have a short stay without a licence were quite exorbitant.

 

Mr Valentine - They certainly were.

 

Ms ARMITAGE - I think only one person would need to be fined and no-one would ever do it again.  I believe that in Barcelona, they have quite exorbitant fines. They knock on the doors to see who is living there and if it is someone from short-stay or a rental who does not have a permit, they get a massive fine.  They are very unlikely to do it again because they will probably lose their property because of the cost of the fine they actually get. 

 

Our fourth recommendation was that the local government authorities determine the frequency and the rate of permit fees for short stay accommodation.  It was felt the local government authorities are the ones best suited, they know what is happening in their area.  They are best suited and obviously with any regulations, they are the ones who are going to have the cost and have to put staff on to determine, to regulate and to do permits.  There is a cost to administration and it should be up to local governments to determine the frequency and rate of permit fees.

 

Our fifth recommendation was that the short-term rental of a person's principal place of residence be exempt from obtaining a short-term accommodation permit, but be required to be registered with a local government authority for data collection purposes.  Behind this recommendation was that if you are a traditional short-stay renter - for example, you have a bed in your home and want to rent out - it is a traditional type of short stay.  It needs to be registered with the local council so they are aware of who is renting out their home or renting out a room or that you are not, and there are safeguards in place, but there should not have to be a permit.  It is not the same as someone having a whole house and renting that out totally separately, which comes into a different category. 

 

The feeling of the committee was if the principal place of residence - and I will be corrected if I am wrong -  had a granny flat in the backyard, that is still really on the principal place of residence.  Anything confined within your area really should be registered with the local government and obviously there is probably a cost.  I imagine there would be a slight fee, but it should not be exorbitant.  Those people who own a separate property they are not living in really should have to have a permit. 

 

Our sixth recommendation is short stay accommodation providers be required to have appropriate levels of public liability insurance.  Another interesting case, because on the Airbnb platform, they provide $1 million dollars public liability insurance many people may feel is adequate but obviously in these times, it is not.  Many people felt their home insurance actually covered their public liability.  It did not really come up in the committee that people said that, but in the community, people have said, 'I have public liability insurance', but obviously, public liability insurance when you are renting out something is a totally different area and you have to have an attachment to your policy.  Not all insurance companies will do that, and you may have to get a separate policy.  It is very important short stay accommodation providers have a separate public liability policy to cover people when they break a leg or whatever might happen, bearing in mind even when they are living in your home with you, they are still renting from you. 

 

Even the traditional home share should have an attachment to the public liability because someone is living in your home and paying you to live there.  Once someone is paying you to live there, if they break a leg, fall down or something happens, they are not covered unless you actually take out an attachment on your policy.

 

It was really all about getting the balance right and capturing the benefits but mitigating against the downside and the consequences.  We found the rapid growth in short stay sector has clearly had an impact on the supply of private housing in some areas.  There is not any doubt, and the report endeavours to provide a series of constructive findings and recommendations for consideration by the Tasmanian Government.  The committee carefully considered all the evidence and took a range of information into consideration when coming up with its findings and recommendations.

 

I also extend my sincere gratitude to Jenny Mannering, who started off with us, and Stuart Wright and Julie Thompson and the other Legislative Council and parliamentary staff for their excellent and tireless work.  While we had many submissions and many groups coming along, I need to make particular thanks to Professor Richard Eccleston and Dr Julia Verdouw from the Institute for the Study of Social Change, who provided us with a lot of information.  They came back a couple of times and were very willing to help to the committee; they provided much information.  We were very fortunate to have many groups willing to give freely of their time and assist us. 

 

It is a very important matter and at the end of the day, it is all about safety and trying to ensure we are not overpopulated with short stay.  We all know in many areas tourism is extremely important.  It is also extremely important that we have housing for people, for those who cannot find housing.  On one hand there were many anomalies - how do you tell someone that they cannot purchase a house and rent it out?  On the other hand people are looking for rental accommodation and they cannot find it.  People in holiday places cannot find somewhere to stay long term if they want to live there, if they are working there.

 

Was it King Island or Flinders Island, one of the islands, was having some building work done.  It is really hard now that King Island -

 

Mr Willie - Through the Chair, it was King Island where they have had the boom in tourism because of the golf courses and they could not find places for builders to stay.

 

Ms ARMITAGE - That is the thing.  You are a casualty of your own success.  You have something wonderful happening and everyone wants to stay there.  Then the properties are purchased by people renting them out, but then there is nowhere for the permanent people to stay.  It is a really difficult situation. 

 

As mentioned, it was felt that realistically, rather than the government being in control of the permits and the charges, it really should come down to the local councils.  They are the ones who have to administer this.  They are the ones who know best, whether it be Break O'Day, whether it be Hobart, whether it be Glamorgan Spring Bay, or on the north-west coast or Launceston - they know what is happening in their area.  Realistically they should be in charge of their own areas, deciding that there is only a certain number they can allow in a certain area and what the charges might be.

 

It is not an easy area and I do not think it is an easy fix.  I am interested to hear the Government's response.  I thank the members particularly for the work that they have done.  As I said, it is not an easy determination to come up with a finding.  I hope that along the way we continue our tourism, that we continue to find homes for people to live without preventing people from going forward and purchasing homes.  It is a no-win in some ways.  As I said, we are a casualty of our own success.

 

It is hard to know what is going to happen.  I hope we do not go the way of some of the areas such as Barcelona, that realistically have lost their heart and soul.  That is one thing that we do not want to do in Tasmania - we do not want to lose our heart and soul.  We want to keep our tourism, but also have places for our own people to live.  I note the report.

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