Melbourne council mulls Airbnb tax as renters battle cost-of-living crisis

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An inner-city Melbourne council is considering establishing an emergency fund for renters struggling with the cost-of-living crisis, as interest rates reached an 11-year high of 4.1 per cent on Tuesday.

After announcing the rate rise, Reserve Bank Governor Philip Lowe acknowledged renters were feeling the cost-of-living crunch, with growing concerns the economy could be on the brink of recession.

The City of Yarra will consider a plan to offer emergency rent assistance to residents.Credit: Jason South

A plan under consideration by Yarra City Council would make a fund of $100,000 available from July 1 for renters on any form of concession card, including students, so they could apply to the council for rent relief.

Yarra – which takes in the suburbs of Richmond, Abbotsford, Fitzroy and Collingwood – will also consider establishing an Airbnb tax in the medium term, which would feed into the emergency rental fund.

The plan will go before the council when it meets to discuss budget measures on June 19 and has the backing of three independent councillors. The Age understands at least two other councillors are supportive in principle, raising hopes the move will achieve majority support among the nine councillors.

Independent councillor Stephen Jolly said the initial $100,000 to float the fund could come from the council’s “advocacy and engagement” allocation for media, branding and marketing, which has blown out to $3.9 million in this year’s draft budget – an increase of more than 15 per cent on the previous year.

Stephen Jolly has called for direct assistance for renters.Credit: Luis Enrique Ascui

“I’d be hoping that the other progressive councils follow suit – Merri-bek, Darebin, the City of Melbourne – because rental stress is a citywide and a nationwide problem,” Jolly, who has pushed for the fund, said.

“We just can’t afford to wait. Just simply lobbying and advocating is not enough anymore. People are calling us out on it; I’ve been called out on it.

“Because [if you’re] working at a restaurant on Smith Street, on f—ing minimum wage, you’re not interested in motions to the Minister for Planning and the Minister for Housing at the state and federal level from your local council. You want action right now.”

Details on how the plan could be rolled out and the fund administered are still being thrashed out.

But the proposal for a fund to directly help people facing rental stress – eventually bolstered by an Airbnb tax – goes significantly further than a motion successfully proposed by Greens councillor Sophie Wade at the May council meeting.

Wade’s proposal, which was unanimously adopted, resolved to have Yarra Council officers prepare a report on the number of Airbnb properties in the municipality; what statutory measures could be taken to limit short stays in Australia; and what council could do to limit short stays within the municipality.

Within the municipality, 43 per cent of people privately rent their homes, according to the most recent census data, rising to 51 per cent when social housing is included.

Independent Bridget O’Brien said council would need to act decisively to protect its diversity in the face of inflation and gentrification, and was confident her colleagues would support the move.

“I don’t think it’s going to be adequate, but it’s probably as much as we can get across the line at the moment given our current financial position,” she said.

“And I think what’s really important about this is that about 40 per cent of our community are [private] renters. A lot of those people are young people … it’s about maintaining what’s really beautiful about the City of Yarra, which is how diverse we are.”

Annual council charges for short-term accommodation hosts already exist in Bass Coast Shire, Frankston, Mornington Peninsula and, most recently, Warrnambool Shire.

According to open-source database Inside Airbnb, there were 1608 properties available in the City of Yarra on Airbnb in March this year. According to census data, there are almost 50,000 dwellings in Yarra.

About 80 per cent of the Airbnb properties listed are listings of entire homes, and 34.5 per cent of hosts had multiple listings.

Airbnb was contacted for comment.

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