Readers of the recently released Noosa Housing Strategy could be forgiven for being somewhat puzzled if not downright confused. The document is devoid of any strategy to address the single most obvious cause of the housing crisis – namely Noosa’s bloated and distorted short term accommodation market. Income derived from visitors has come at the cost of long-term tenants.
Evidence shows that all around the country, and not just in the Noosa Shire, holiday letting hosts have been allowed (indeed encouraged) to reduce the rental market by turning tens of thousands of residential properties into short-term lets.
There is an argument that investors make a lot more out of short-term rentals than they do from residential lets but only by having multiple properties and treating them as a business rather than a hobby earning pin money. While Noosa is unlikely to mirror the situation in places such as Sydney where housing portfolios can range from 16 to 170, Council should investigate, and publish, the number of property owners in the Noosa Shire that own more than their primary place of residence.
As another Noosa Matters piece pointed out, in Noosa “more than 5000 homes remain empty much of the time as they wait for the next short-term holiday renter to book in.”
The 2021 Australian Census shows that the total number of households in Noosa Shire was 21,847 with 36% of them not the principal place of residence of the owner.
Council has access to a considerable amount of data relating to household ownership and usage and needs to carry out a forensic examination and analysis of the ownership of the 36% of those properties which are not the principal place of residence of the owner. Data should be compiled that would identify the number of owners who own one or more properties in the Noosa Shire that are not their principal place of residence and a differential rating category applied to those premises. Neither the Housing Needs Assessment Report (2021) nor the recently released Housing Strategy (2022) provides data on the extent to which multiple properties are owned by a single owner.
If Council cannot persuade those owners to place their multiple properties on to the local rental market, then those properties should be subject to a differential rating category that would attract a significantly higher rate. A higher rate differential might just encourage some owners to divest some or all of their property portfolios. There needs to be a differential, sliding scale, rating system that favours the owners of a single, owner-occupied dwelling over those who own multiple properties in the Shire.
Council has the power to do just that. Local government has considerable autonomy in adopting a rating system. Councils may determine different categories of rateable land based on land use, access, or consumption of Council services.
Of particular interest and relevance is the Queensland Supreme Court decision in June 2020 in Island Resorts (Apartments) Pty Ltd v Gold Coast City Council in which the court confirmed that local governments have broad discretion to set differential rating categories of land and to levy differential general rates.
Interestingly, the Court held that the distinction between renting to a “permanent resident” or “itinerant” (i.e., visitor) related to an attribute of the land, being the use to which it is put, was a relevant consideration.
The Court noted that although renting a property is always “owner dependent” in that the owner has chosen to use their land for rental use, that does not mean the different uses that land is put to by their owners cannot be a relevant consideration when deciding rating categories and rates.
So clearly, Council has the power to discriminate between owner occupiers resident in Noosa Shire and those owners with multiple properties none of which are a principal place of residence.
If councillors are serious about addressing the significant social and economic impacts on the community as a result of the housing crisis gripping the Shire, then they need to take some serious action. The fifty or so actions outlined in the draft strategy, while commendable, will have minimal impact on the problem. By its own admission, the strategies outlined in the draft Housing Strategy might only add a few hundred dwellings to the housing stock.
What is required are some specific actions that will change behaviour in the market. A sliding scale, differential rating category might just free up some underutilised housing stock and go some way in alleviating the housing crisis in the Shire.