Urgent need to mend Tasmania’s housing crisis

This opinion piece by Institute for the Study of Social Change director Professor Richard Eccleston first appeared in the Mercury on February 21 2018.

THE word “crisis” is overused in political debate. But, when growing numbers of families are living in tents and tenants lucky enough to have a roof over their head are facing big rent increases, it’s pretty clear we have a serious problem.

Voters are right to expect action — access to suitable, secure and affordable housing, either to buy or rent, is vital for community and economic wellbeing.

Unfortunately, most of the proposals that have been suggested to fix the problem during the State Election campaign are short term and unlikely to be effective.

The next state government must tackle our housing crisis as a priority and develop an integrated suite of policy measures to provide urgent relief, while also improving housing outcomes in the longer term.

Real reform will involve making tough political decisions because tinkering at the edges simply will not make our housing system fairer or more affordable.

The Institute for the Study of Social Change today releases a report setting out a blueprint to improve housing outcomes in Tasmania based on independent research and analysis.

We argue that making Tasmanian property taxes simpler and fairer will improve housing affordability and economic efficiency. The main aim here is to simplify stamp duties and gradually replace them with a fairer, more efficient annual property tax.

We also need innovative partnerships between government and the community and private sectors to increase housing supply. The housing crisis is an opportunity to improve the livability and productivity of our capital city. This goal must be front and centre of any Hobart City Deal.

All this will take time and commitment. In the short term we must address the rental supply shortage crippling Hobart.

I welcomed Will Hodgman’s announcement in late 2016 that his government would embrace the sharing economy. While the likes of Airbnb can be disruptive and pose a risk to traditional hotels, I thought that in Tasmania, with its booming tourism industry and accommodation shortages, the benefits would outweigh costs.

I agree with my colleague Louise Grimmer who, in an article in The Conversation last week, pointed out that Airbnb continues to offer benefits for visitors, hosts and the broader community, including Tasmania’s small independent retailers.

However, there are growing concerns that the rapid growth in Airbnb and other holiday rental platforms is coming at the expense of housing for ordinary Tasmanians.

Courtesy of New York-based Inside Airbnb, we finally have detailed data on the rise of Airbnb in Tasmania and the findings are quite stunning,

In January 2018, there were 4552 properties listed on Airbnb in Tasmania, up from 1827 from July 2016.

The Airbnb boom has been most dramatic in central Hobart. In the Hobart local government area in January there were 1121 properties listed, of which 876 were “entire properties” (up from 416 total listings and 250 “entire property” listings 18 months ago).

Many of the entire properties may have been shacks or granny flats, not previously used for long-term rental. However, it is safe to assume that many had, until recently, been long-term rentals.

It is not hard to join the dots — if just 70 per cent of the entire properties listed in Tasmania in January 2018 were previously in the long-term rental market, it would mean that about 2500 homes statewide, and more than 600 homes in inner-Hobart had been removed from the private rental housing pool.

Institute for the Study of Social Change director Professor Richard Eccleston

Institute for the Study of Social Change director Professor Richard Eccleston

Let me be clear, I’m not for banning Airbnb, which is now a $90 million business in Tasmania.

What we need is a clever policy framework that will allow us to capture the benefits of Airbnb without decimating inner-city rental markets.

There are options for achieving better outcomes, including strategic zoning and levies in certain suburbs. Fortunately, the evidence from overseas suggests that Airbnb has been willing to co-operate with governments to address the impacts of its business and help implement new forms of regulation.

Tourism has become a mainstay of Tasmania’s economy, but the sector’s growth is dependent on broad community support.

If we have to choose between an Airbnb free-for-all and providing a secure home for ordinary Tasmanians, the government should back the people every time.

Ahead of next week’s election all parties should commit to an urgent evidence-based review of Airbnb and to give serious consideration to a longer term reform agenda.

Professor Richard Eccleston is a political scientist and taxation expert at the University of Tasmania. He is the director of the Institute for the Study of Social Change and the lead author of the Australian Housing and Urban Research Institute’s Pathways to Housing Tax Reform report released in Sydney late last year.

A free public talk was held at Hobart Town Hall on February 23 featuring Murray Cox from Inside Airbnb. Watch now via livestream.


The Institute for the Study of Social Change has released a Blueprint for improving housing outcomes in Tasmania.


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