Editorial June 24th 2022

Welcome to this week’s editorial,

For decades holiday makers have enjoyed coming to the south coast for weeks at a time, to fish, relax, meet up with extended family and generally indulge themselves in the paradise we call home.

Tuross Head is just one of the many holiday destinations along the coast and is typical of its mix of permanent and holiday homes.

In the 1920’s developer Hector McWilliam purchased the Tuross headland from Mylott and turned the old Tuross House into a guest house with a small general store that sold goods and fuel to campers down at Sandy Point.

Hector had recognised that, year after year, campers would come from far and wide to fish the Tuross lakes and to enjoy a summer by the sea. In 1924, soon after purchasing the Tuross headland he began his vision of “Canberra’s Best Seaside resort”

Hector recognised that visitors liked to camp and provided a camp ground for them. He also recognised that some preferred lodging and established a hostel at the old Tuross House. But demand was evident that others wanted their own land where they could build a family holiday shack that was able to be provide better protection from the weather and allow for storage of holiday needs and toys. He subdivided his first section in 1924 marketing the idea that a purchase was an investment for children that will increase greatly in value.

Over the decades more land has been subdivided up and down the coast. And year in and year out new visitors have come, fallen in love with the region and decided to buy a holiday house.

The Tuross Head story can be repeated up and down the coast. We are a holiday destination and as such we have a wealth of holiday homes. How many holiday homes? It appears by the mailout sent by the Eurobodalla Mayor this week that we have 8500.

8500 families with holiday homes that they purchased, maintain and keep for the use of friends and family. Holiday homes that are furnished to be at the ready of spontaneous visits any time of the year. We all know these houses. They are in our street, in our neighbourhood, and for many in our memory of how we first came to settle in the region.

Until recently these house sat quietly waiting to be filled with summer laughter, sometimes not visited for a year. But now they are in the spotlight as the region faces a declared “Homeless Crisis”.

Before moving on the holiday houses are NOT vacant. They are not empty shells devoid of furniture ready for tenants. Most are well furnished and cared for. And all represent an asset. They are somebodies’ property to be used for whatever legal purpose they wish. And that includes renting out, fully furnished, in the short term if they choose to friends, friends of friends, or via holiday rental platforms.

It doesn’t take long at any table discussion on homelessness to begin pointing the finger at the number of holiday rentals available via various online platforms (there are 1500 in the Eurobodalla) with claims that these are the villains.

“If all of these holiday homes were permanent rentals we wouldn’t have a problem,” says every keyboard warrior.

But that is far from the truth. We have to remember that Eurobodalla is a holiday destination. We rely on that and financially hurt when visitors don’t come. Our holiday houses are mowed, painted, maintained, serviced. Their visitors inject millions every year into the community by way of the goods and services they enjoy. Holiday houses serve a purpose in providing tourism accommodation stock. There are not enough hotel or motel beds in the region to cover the demand.

Platform rentals and holiday homes play a vital role in contributing to the region’s revenue but they are now seen as “contributing” to the house shortage issue.

This week Eurobodalla Council wrote to the shire’s 8,500 non-resident ratepayers, asking owners to consider putting their holiday home into the local rental market for the next 12 to 24 months saying “We did this after the 2019/20 bushfires and more than 80 homes were placed into the market. If people can repeat that generosity, it would be a significant help. If there are more properties available for longer term rent, people and families are less likely to become and remain homeless”.

That seems OK. And maybe there will be some who decide that they might pack up their holiday house furniture, put it in storage at their own expense for 12 to 24 months and rent out their home. It won’t be easy for them. To transition from a furnished holiday house to a vacant house ready for a permanent tenant requires considerable effort, additional insurance costs and the costs to have the property listed and managed. The downside is that the owner loses the opportunity to use the house. On the plus side the financial reward might help in paying the ever increasing rates and the backlog of maintenance that an investment property always requires.

Of concern though is Council’s follow-up statement saying some councils around the country, like Brisbane and Byron Bay, are using the regulations available to them to push holiday rentals onto the rental market by reducing the days they can available for holiday stays.

The Mayor says “We appreciate investors have a right to their holiday rental income, but until the state and federal governments invest in social and affordable housing these are the options available to councils trying to support their communities.

“Before considering any regulatory action, however, the Council is writing to the shire’s 8,500 non-resident ratepayers”.

“Before considering any regulatory action?”

So what regulatory action might that be?

The first idea might be to establish a register of holiday homes and apply a penalty rate to them. With changes to the rules established in November 2021 all Short Term Rental Accommodation (STRA) must now be registered on the Department of Planning, Industry and Environment's STRA register before they can be advertised or offered for short-term rental. There are fees associated with registration and proof is required that fire safety standards have been met.

The register, associated with an ABN for taxation linkage, then records bookings and complaints.

In heavily impacted areas of the state Councils have established caps that limit how many nights a property can be rented out for as a STRA. While 180 days per year has been widely adopted to provide some remedy Byron Shire is now considering 90 days in any given year. Across the border the Mayor of Brisbane is going for 60 days as a means of “encouraging” STRA owners to reconsider.

Such a reduction will immediately reduce the income potential of a property. Many of these properties make up the investment portfolios of self funded retirees who chose to invest in bricks and mortar rather than shares.

Eurobodalla Council was given the option to enforce a 180-days-per-yer cap on non-hosted (where the host does not live on site) STRA. It decided not to.

Housing shortages in Eurobodalla extend across all markets but are particularly exacerbated in the low to middle income brackets and for smaller dwelling types. There is an acute need for social housing associated with high unemployment, domestic violence and vulnerable people. In all housing sectors, supply has not been able to keep up with demand.

If one looks at AirBnB listings the properties and their potential “permanent” rental are well outside the affordability of most of our homeless.

In the Eurobodalla Council Submission to the NSW Govt Regional Housing Taskforce (26 August 2021) they advised that 42% of households in our Shire earn less than $600 per week. Eurobodalla has high unemployment (9%) and only 7.1% of the population earn greater than $1,500 per week compared to 12.2% in regional NSW, making home ownership relatively unattainable.

Between 2011 and 2016, the counted Aboriginal population rose by 15%, while the overall population of the local government area rose by 4%. Additionally 7.7% of the population of Eurobodalla Shire need help in their day-to-day lives due to disability (compared with 6.3% for regional NSW) which is further compounded by the number of people with disability of working age (5.0% in Eurobodalla compared to 3.6% in regional NSW).

Eurobodalla Shire has a median house rental of $600 per week, a climb of 62.2% in 5 years.

In coming months and years it will be crucial that Council ensures that our “empty, vacant, holiday houses” or “our greedy investor short stay rentals” become the villains in the discussions around the lack of housing stock.

Eurobodalla Council has long been condemned for the bureaucracy and hurdles it has placed on investors and developers who have taken their money elsewhere.

By its own planning instruments it has placed restrictions on rural land prohibiting additional housing stock and has failed to constrain developers with any requirement that there be a consideration for affordable housing be given. Even their latest sale of Dalmeny land has no such constraints meaning land will be sold at top dollar and only those able to afford to build will do so.

Like it or not holiday home owners have the legal right to enjoy their asset as much, or as little, as they wish. Those who chose to rent out on the Short Term market are legally allowed to do so for as many, or as few days, as they wish and are now formalised by registration to ensure safety and taxation compliance overseen by a Code of Conduct.

Our tourism industry requires these holiday beds. Our local businesses rely on these holiday beds. Our community relies on the income that comes directly and indirectly from these holiday beds. The cleaners, the gardeners, trades and service providers, our shops, our hospitality providers.

When one reads the following alarm bells ring for the slippery slope that we might recklessly go down that needlessly kills the Golden Goose by way of knee jerk regulations.

“The Mayor says some councils around the country, like Brisbane and Byron Bay, are using the regulations available to them to push holiday rentals onto the rental market by reducing the days they can available for holiday stays, but he wants the NSW Government to take the lead.

“We appreciate investors have a right to their holiday rental income, but until the state and federal governments invest in social and affordable housing these are the options available to councils trying to support their communities”

In closing (by Council’s own submission) : 42% of households in our Shire earn less than $600 per week. We know that current median rent in Eurobodalla is $600 per week. The 74.3% of households in the Eurobodalla are one or two person households. Most of the housing stock is three- and four-bedroom homes (68.6%).

Maybe we need to also consider handing out penalties to those who chose not to rent out their spare bedrooms. Or maybe, just maybe, we encourage the State and Federal governments to provide the social housing they have failed to provide for decades.

Until next lei (For the record I have an investment property that I rent out permanently)

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