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  • Writer's pictureRyan Posselt

The problem with Airbnb

Updated: Mar 30, 2022


Hobart has a housing crisis, there is no two ways about it. It has one of the tightest rental markets in the country, driving rental prices higher than some of the larger capital cities. Purchase prices show no sign of abatement either up 30% in the 12 months to December, a price rise equivalent to $440/day. The competition and profits for existing property owners is a boon for the established amongst us. However, it provides major stresses on those less fortunate and our communities future - our young people.


The majority of solutions are managed in the state government sphere and outside the realm of local government. However, there has been a continued failure to act at the state level, which has caused rental costs to sky rocket. Extraordinarily high rents have combined with rapidly rising costs of living to put serious pressure on vulnerable people, families and young people. It doesn't help that Tasmania has proportionally lower incomes than our mainland counterparts. Although the majority of policy levers lie with The State, there are options available to Hobart City Council and other local governments


The use of appropriate housing for Airbnb is contributing to the problem. There is no doubt that many Airbnb operators are good willed families who work hard to both purchase the property and provide a service to their guests. That's why a retrospective change would be unsavoury, as those people may rely on the income produced from Airbnb to cover daily family expenses. However, a prospective pause on Airbnb approvals in Hobart doesn't actually lead to worse outcomes for any of our society; its a change in legislation for the greater good.


I believe Council can act to put downward pressure on rental costs in particular. One immediate lever is limiting short stay accommodation, while longer-term solutions are sought and implemented. I support both motions currently in front of Hobart city council. I support:

  • Pausing new approvals for whole property Airbnbs

  • Finding a financial lever to encourage existing owners to rent their property out to long term tenants over Airbnb.*

*I'm not convinced that a different rate schedule is the best approach for this financial lever, and there may be a better solution, such as charging a small per-night surcharge for visitor accomodation in Hobart municipality. I would need to seek expert economic advice on this matter before I had a firm position. But the idea of a small (<$5/night) surcharge for tourists visiting Hobart has merit and is worth exploring. the ongoing cost to airbnb operators may encourage some to move back into conventional land lordship. While, large profit making hotels would contribute just a little bit extra to our services, resulting in a better experience for tourists and locals alike. Such a scheme could increase council's operating budget by more than $5 million. I don't believe such a small surcharge would dissuade interstate and international tourists who are spending hundreds to thousands of dollars per day. But as always, I would seek expert analysis before moving such a motion before council.


Back to the housing crisis. Hobart City Council needs to work with property developers and current land holders to increase the rate of apartment developments in appropriate areas within the city. Planning now for cohesive, beautiful and functional developments will only enhance this great city of ours. Current light industrial operations in the municipality should be given incentives to relocate further out from the city, opening up plots of land for future development. It's a 5 year plan for our city, so we need to act now. I'll have more to say on urban consolidation closer to the October election.


But for now, lets pause Airbnb approvals and allow more of our society to live their best life with security, certainty and a long-term roof over their head.


Ryan.

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