A short-stay levy and 800,000 new homes: how Victoria plans to ease the housing crisis
Daniel Andrews on Wednesday released the Victorian government’s housing statement, which the premier described as the most significant “shake-up” of housing policy in decades.
Over some 40 pages, the statement reveals the government’s plans to speed up development approval times, rebuild the state’s ageing social housing towers and unlock land in established suburbs in an effort to build 800,000 new homes over the next decade.
It also includes several measures to protect renters’ rights and an Australian-first levy on short-stay rentals such as Airbnb, opening the possibility that other states may follow suit.
But views are mixed on whether the changes will do enough to ease the housing crisis. Here’s what we know.
Airbnb levy – ‘modest’ or ‘disastrous’?
A key component of the housing statement is a 7.5% levy on short-stay accommodation platforms such as Airbnb and Stayz, which is expected to raise about $70m annually to fund social and affordable housing when it comes into effect in 2025.
Despite Andrews describing the levy as “modest”, it has received significant backlash from the industry.
Felicia Mariani, the Victoria Tourism Industry Council’s chief executive, said the tax would be “disastrous” and a “significant impost” on travellers.
Related: Australian-first 7.5% levy to hit all Airbnb and short-stay accomodation in Victoria
Airbnb’s Australia and New Zealand public policy head, Michael Crosby, had initially welcomed a levy but said the rate of 7.5% was “too high” and would give hotels a “free kick”.
Michael Buxton, a professor of planning at RMIT University, described the levy as “a Band-Aid solution”.
“It’s just going to be passed on to consumers. It’s not going to free up 40,000 dwellings that have been taken out of the medium and long-term rental market,” he said.
Buxton backed a proposal by the Greens to cap Airbnb stays at 90 days, noting it had proved effective in other cities.
Samantha Ratnam, the leader of the Victorian Greens, said the government had “caved in to Airbnb by failing” to impose a cap.
Social housing renewal
Another key policy is a massive redevelopment of Melbourne’s 44 high-rise public housing towers. Andrews described it as the biggest urban renewal project in the nation’s history.
The “out of date”, “derelict” towers will gradually be replaced with new energy-efficient apartments – and the amount of social housing across the sites increase by 10%.
But concerns have been raised as to whether they will remain publicly owned and managed, and how many private apartments will be built on the land.
Katelyn Butterss, the chief executive of the Victorian Public Tenants Association, urged the government to “be transparent as to who will ultimately be the manager of these properties, in order for this announcement to be as positive as it seems on the surface”.
Ratnam described the move as “privatisation by stealth” and the “beginning of the end of public housing in Victoria”, while Louisa Bassini from Inner Melbourne Community Legal urged the government to reverse the decision.
She said the legal centre had already heard from tenants who were “confused, stressed and unsure of what their future holds”.
“This announcement has sent shockwaves through our community today,” Bassini said.
Protecting renters’ rights
Alongside housing reform, there is a chapter dedicated to better protections for renters. It includes making rental bidding an offence, as well as a portable bond scheme – measures that have previously been announced in New South Wales.
Victoria will also increase the minimum period for notices to vacate, from 60 to 90 days.
Landlords will also be unable to increase rent for new tenants within 12 months of issuing a notice to vacate to previous tenants. And a new rental dispute resolution agency will be set up to handle issues between landlords and tenants.
Better Renting’s executive director, Joel Dignam, described the changes as “modest” but a “step in the right direction” – provided they are enforced.
“More rules on paper that don’t make a difference in practice aren’t getting us anywhere. But some of these changes do demonstrate a recognition that penalties do have a part to play in making compliance the norm.”
Dignam urged the government to develop and maintain a register of rental properties, as well as adopt a “secret shopper” approach to stamping out rental bidding.
“There’s nothing to stop the government from having people who got out to rental inspections and apply for properties and offer rents and see what happens,” he said.
The Victorian Trades Hall Council’s secretary, Luke Hilakari, said the changes “will level the playing field between renters and landlords”.
But the Victorian opposition said the plan “fails to address the fundamental causes” of the housing crisis and will leave many young people no closer to owning a home.
“The premier simply can’t be believed when he says he will build 800,000 homes over 10 years,” the opposition leader, John Pesutto, said in a statement.
“We’ve heard these promises before when it comes to housing and they’ve amounted to nothing.”
Developers and a new decision-maker
The most significant part of the housing statement, however, is the chapter called “good decisions made faster”, which details reforms of the state’s planning system.
Under the new scheme, planning applications for developments worth at least $50m in Melbourne and $15m in regional Victoria will be overseen by the government rather than local councils, provided they include at least 10% affordable housing.
The planning minister, Sonya Kilkenny, will become the ultimate decision-maker for these projects, speeding up the process from up to two years previously to four months, and preventing costly battles with councils and resident groups in the Victorian Civil and Administrative Tribunal.
The changes were welcomed by the Property Council of Australia, the Urban Development Institute of Australia, Master Builders Victoria and the Housing Industry Association, who joined the premier at the announcement on Wednesday.
But Buxton said the changes were a “significant erosion of democratic rights” for local communities.
“What it is going to do is to take away residents’ existing rights and council powers. It’s going to be a fundamental change to a democratic decision-making process,” he said.
“It’s going to handover substantial portions of the city to the development industry to be redeveloped without any local or community input.”
Buxton said data shows delays aren’t due to councils but rather developers who are holding off on building bigger projects due to construction costs.
“It’s a manufactured crisis,” he said.
Data from the Municipal Association of Victoria released on Wednesday suggests there are about 200,000 houses, townhouses and units that have been approved under Victoria’s planning laws on which construction has not yet begun.
