Podcast: Fast-track flats and an Airbnb tax

This week’s podcast looks at the renewed concern about the effect of short-term holiday lets on affordable housing, following City of Sydney’s request to the state government to change the laws to curb Airbnb and its ilk.

Last week CoS said about 1000 homes would come back into the residential rental market in central Sydney alone if the government put limits on commercial STHL operators.

And we hear rumours that a Victoria-style tax is being considered, with the proceeds going to build new homes.

And can we trust an Airbnb survey that says people who can let their homes all year would just shutter them, rather than return them to the residential market?

And speaking of new homes, the government has fast-tracked planning approval for a number of high-rise blocks that will house 8000 families.

But are they building communities?

By the way, the news about the Netstrata report came in after we had recorded the podcast so we will definitely pick that up next week.

Transcript in Full

[Jimmy]

We haven’t heard a lot from Airbnb recently, but there seems to be some bit of movement around.

[Sue]

Oh yeah, what’s happening?

[Jimmy]

Well, we’ll have a chat about that later. And we’re hearing now that the government is fast-tracking high-rise buildings in areas where some people might not want them. Surprise, surprise.

Surprise, surprise. It is always the way. I’m Jimmy Thomson.

I write the flat chat column for news.com.au.

[Sue]

And I’m Sue Williams. And I write about property for the Sydney Morning Herald, The Age and the AFR and Domain.

[Jimmy]

I also edit the flat chat website, flatchat.com.au. And this is the flat chat wrap.

 

So, Airbnb has been in the news again. The City of Sydney council has passed a motion asking the government to adjust the laws on short-term letting.

It’s not just Airbnb, it stays as well, to free up a thousand apartments in the city of Sydney area that have been shifted over to holiday lets that should be available for residential rents.

[Sue]

Wow, that’s a lot, isn’t it?

[Jimmy]

A thousand. It is. And that’s just in Sydney.

That’s just in the city of Sydney. Admittedly, this is the highest density, but it’s starting a trend. Now, the word I’m hearing is that Airbnb when they, and stays when they’re not busy virtue signalling by saying that they will take homeless people and whatever from various disasters are quietly crapping themselves.

[Sue]

Well, that would explain, they did a big survey the other day that they sent out to lots of media outlets. And you looked at it and they were saying it doesn’t do anything when you impose new rules and impose new Airbnb caps. Because the people who operate the Airbnbs still operate them.

They don’t put them out into long-term residential lets. They simply make sure that all their letting is going to be during the peak time. So they’re going to earn the most money.

And the rest of the time they just use the place themselves or get friends to use it, that kind of thing.

[Jimmy]

And who was this a survey of?

[Sue]

It was a survey of Airbnb owners.

[Jimmy]

So it wasn’t biased? And they were completely honest. Well, that’s right.

[Sue]

So it kind of really undermined the validity of the study anyway, really. But they were saying, well, all these people were saying no, and it wasn’t a very big number either. All these people are saying, no, we’re not going to put them out into residential lets.

Therefore, there shouldn’t be any more controls because controls are obviously not working. And this was a study in Byron Bay, which has been quite active about banning and having caps for the number of nights that Airbnb owners can let out their properties. So they’re basically saying, so it’s failed.

So therefore, you should just let Airbnb owners have a free for all.

[Jimmy]

Yeah, exactly. And it’s failed because they keep finding ways of undermining it. And maybe they should make them act more responsibly.

I mean, I’m wondering if these people who say, oh, when we don’t have the peak period, we don’t list them, are they still renting them out to people and not telling the taxman?

[Sue]

Yeah. I mean, they can be lending them to friends and friends might be buying them dinners or I don’t know. They can have very casual arrangements, can’t they really?

But you still feel for the neighbours in those situations because they’re still having a big turnover of people living next door.

[Jimmy]

It kind of sounds like they’re saying you can’t control us. So stop even trying. And I think a lot of councillors and politicians will be saying, well, maybe we need tighter controls.

Maybe we need to allow the councils to say this houses in this area or apartments in this area may not go on short term holiday lets. That would sort it.

[Sue]

Yeah, it would. They wouldn’t like that very much.

[Jimmy]

I don’t think they would. But you know, these surveys, I mean, Airbnb surveys. I mean, I remember a few years ago they duped the tenants union and to get tenants to say that they liked Airbnb.

And what they hadn’t, the way these questions were set, it was they didn’t actually say this, but it was like, would you like to be able to go on Airbnb? It wasn’t a question like, would you like your landlord to be able to kick you out and put Airbnb in your apartment instead? And for some reason they didn’t ask that question.

[Sue]

Sounds just like the referendum for whether we should have a Republic or not.

[Jimmy]

Yeah, exactly. Yeah. Would you like something you hate or would you like to continue with the thing you hate just a bit?

Yeah. So Airbnb and apparently the whole Airbnb, I keep calling it that the short term holiday letting laws are up for review. And this hand grenade that city of Sydney have thrown in to say to the government, look, we need your help.

We need your support in doing something about this. Now, it may well be that city of Sydney are the last people that the government will listen to because they really neither labor nor the liberals like the fact that city of Sydney is run by Clover Moore.

[Sue]

And independent. Yeah. But then again, would they consider doing something like happens in Victoria where they actually have a tax for Airbnb owners as well?

[Jimmy]

My spy in Macquarie Street tells me that the treasurer here in New South Wales is very aware of A, the problem with short term letting, how it affects affordability and availability of flats and what they’re doing in Victoria where they put 7%, 7.5%, something like that. It’s a tax on Airbnb or short term holiday lets. And that money is then slated to go into building houses, apartments probably and affordable, affordable housing.

[Sue]

That’s a good, that’s a good trade off, isn’t it? Yeah.

[Jimmy]

So they don’t lose. And now you’ve got the Airbnb people, the short term holiday letting people saying, oh, this will destroy tourism. And we’ll just, I mean, it’s almost like they’re implying, oh, we’re just going to board up our apartments and not.

[Sue]

And leave them empty.

[Jimmy]

Leave them empty because we don’t want to pay your tax, which is stupid. And they’re not going to do that.

[Sue]

Yeah. And also a lot of people are saying, well, investors are now leaving the Victorian market. People who’ve been buying apartments because these restrictive, because of all these new restrictions on how they can use their apartments.

And also you’ve got the new rental legislation, which means you can’t kick people out willy nilly. And also you’ve got some new land taxes. And I talked to a few experts the other day about this and they were saying, well, the land taxes is a bit of a furphy really, because it only affects you hugely if you’ve got massive land holdings in Victoria.

It doesn’t affect you if you own one or two apartments that you’re letting out as for tenants. So really, and they all expect the Melbourne apartment market to pick up again, because it’s the actual, it’s the weakest because there has been a bit of an oversupply in some areas.

[Jimmy]

But this is one of those weird arguments because everybody’s going quite rightly saying, oh, we’re really concerned about lack of affordable housing. And we’re concerned about rents getting out of control. And then the argument in favour of short term letting is, oh, well, we’ll take our properties out of the market completely.

Well, you can’t take your market, you know, you cannot go in and come along with a hoist and actually slot your apartment out of the building and take it somewhere else, like you were playing a game of Jenga or something like that. So the apartments are there, the homes are there. It sounds like, if I recall your last coverage of the housing rental market in Victoria is that rents are not going up there as quickly as they are elsewhere.

[Sue]

That’s right.

[Jimmy]

So whatever is happening is having a beneficial effect from the tenants point of view. I mean, it’s just it’s a circular argument.

[Sue]

It is really, it just goes round and round.

[Jimmy]

The tenants are saying we’re having to pay too much to rent a home. The landlords are saying, we’ve got too many restrictions. So we can’t put rents up the way we want.

So we’re going to take our, we’re going to sell our property. I mean, she’s, look, at some point somebody has to do something that breaks the cycle and lets everything settle down. And if rents cannot just keep going up and if short term holiday letting is contributing to that, and it obviously is, then, I mean, it’s another one of these counterintuitive arguments that the short term letting industry puts up.

They say we don’t have any effect on residential rents at all. And then they turn around and say, but if you bring in laws, it’s going to cost thousands of millions of dollars to the people who provide holiday letting. I mean, just pick a lane and stay in it would be my advice to them.

So anyway, so it sounds like there are murmurings that things are going to change. And one of the things that could change is that holiday let’s in New South Wales may be subject to tax and that money will be used to pay for new affordable buildings.

[Sue]

And if there were enough homes, then I guess Airbnb wouldn’t be, or any short term let platforms wouldn’t be such a problem, but it’s just because they’re critical. Yeah.

[Jimmy]

We’ll leave them alone.

[Sue]

Critical shortage of homes for people.

[Jimmy]

And maybe they’ll start telling the truth. Do you think that’s possible? Airbnb putting out a press release that isn’t dishonest?

Hmm. I want to see that.

[Sue]

Not dishonest. They’re not dishonest, but they’re kind of weighted in a certain way.

[Jimmy]

Right.

[Sue]

I think you kind of have to agree to that.

[Jimmy]

Okay. I apologize to Airbnb people for suggesting that they have ever been dishonest in anything that they have ever done ever. I think that’s covered it.

[Sue]

Moving on, I think.

[Jimmy]

When we come back, we’re going to talk about new buildings that are actually being built. That’s after this. Sue, you’ve been catching up with a lot of development stories.

There’s been a couple in the past couple of weeks. It’s all about high rise buildings going up sometimes in places where people don’t really want them.

[Sue]

Well, yeah. I mean, obviously the government is under huge pressure to start delivering on some of these new homes they’ve been promising. And there’s been a number of announcements about different projects being agreed to by the government and fast tracking the development applications for developers as well.

And the latest is there’s 18 housing projects in Sydney, which have just been fast tracked by the state government. So, they’ll be providing about 8,000 new homes. Yeah.

Mostly in high rise and medium rise apartments. So, that’s quite a lot really, but it’s spread across 13 local government areas, including North Sydney, Willara, Inner West and Willoughby. So, kind of North, East, West, everywhere really.

So, which is good because I think before, the last announcement was about a lot of new homes and they were all kind of in the South around Bayside and then in the West around Blacktown as well.

[Jimmy]

Right.

[Sue]

Over there, they’re saying there’s a huge number being planned and that’s places like Arncliffe and Banksia and Bexley and Rockdale.

[Jimmy]

So, they’re not too far from the city centre.

[Sue]

No, no, they’re quite good. I’m going to say 20 minutes from the CBD really, I think. And then out at Blacktown and Doonside and Mount Druitt, those kind of places.

And some of those really, it would be nice to see them reinvigorated with some nice new shiny development.

[Jimmy]

I’m thinking that one of the things I noticed this morning is that the Edgecliffe Centre is going to have a massive apartment block built on top of it.

[Sue]

Yeah, 22 storeys.

[Jimmy]

And part of that will be a redevelopment of the Edgecliffe Centre itself, I think, which is, I would have to say, one of the dreariest shopping centres ever in the world.

[Sue]

It’s not very far from us. And we went to Aldi the other day, which I think is a fabulous supermarket. But gosh, the Aldi in Edgecliffe is so miserable.

You come out feeling you’d rather go in there again.

[Jimmy]

And I mean, there’s that ad that Aldi are doing where the woman is looking for herring paste or something like that. And the guy behind the counter is very apologetic, and it starts raining at the checkout desk, which is kind of weird until you’ve been in Aldi in Edgecliffe. And you think, yeah, I’m sure it was raining inside there the last time I was there.

And obviously, it’s on the basement floor of that building. So there’s no way it could have been raining, but it kind of feels like it. So I’m looking forward to, you know, five years’ time walking into a bright, shiny new Edgecliffe Centre.

[Sue]

Five years, you’re optimistic. Well, I guess they’re fast tracking it, aren’t they?

[Jimmy]

They are fast tracking it.

[Sue]

And they do go up quite quickly.

[Jimmy]

The building processes that they use, the biggest time seems to be digging the hole for the car park underneath into the rock.

[Sue]

And they won’t need to do that.

[Jimmy]

They won’t need to do that. And once they’ve done that, they just seem to go up very, very quickly. Building techniques these days are amazing.

It’s like they put plastic moulds in and they just pour the concrete. It’s like they build it with Lego, and then they fill the Lego with concrete, and then go up a floor. And they’re going up at a terrific rate.

[Sue]

So if they’re going to redevelop the Edgecliffe Centre as well, would they do that first? Because that would be an inducement to people to buy the apartments above? Or would they do it afterwards, because they want the apartments up there and people living in there?

[Jimmy]

I would think they would have a problem of doing major building works while the shopping centre is still open. Unless I’ve got my geography wrong and it’s adjacent to the…

[Sue]

Well, it is adjacent, but it’s going to be dwarfing that centre really. But I mean, there’s a cluster of high rise buildings there.

[Jimmy]

Yeah, there’s offices on top.

[Sue]

It’s so handy because you’ve got the station, you’ve got the bus terminal behind. So it’s got all the transport there that you need really.

[Jimmy]

And I think they have the Vietnamese and the Spanish high commission there.

[Sue]

Oh, that’s right.

[Jimmy]

So you get Spanish and Vietnamese people asking each other for directions and having no idea what they’re saying.

[Sue]

But maybe you might have a nice Vietnamese and a nice Spanish restaurant.

[Jimmy]

Well, I think they’ve got a Vietnamese takeaway. I’m not sure. It needs a bit of a scrub up.

[Sue]

Yeah, absolutely. That shopping centre. It sure does.

And there’s other places. They’re talking about a 1200 Mervac apartment building on the corner of Botany Road and Bourke Street in Zetland.

[Jimmy]

1200 apartments. Wow.

[Sue]

Yeah. So it’s going to be big. And Stockholm, which have just come back into the market, they left the apartment market for a long time and they’re just back again because they’ve got a big development at Rosebury.

But they’re proposing here to build a 50 storey apartment building with retail at St Leonard’s.

[Jimmy]

Wow. St Leonard’s? St Leonard’s.

[Sue]

St Leonard’s do have really high buildings.

[Jimmy]

They do. Is it getting a bit crowded up there, do you think?

[Sue]

I don’t know, because a lot of people like that area.

[Jimmy]

They’ve got railway stations.

[Sue]

Yep.

[Jimmy]

And they’ve now got the metro at Crows Nest.

[Sue]

Yes, that’s right.

[Jimmy]

So it’s getting well catered for.

[Sue]

Serviced. Yeah. And there’s also 156 luxury apartments they’re talking about in Surrey Hills and a former David Jones warehouse, which will be developed by James Packer.

That’s interesting. We haven’t heard his name for a while, have we? Really?

No.

[Jimmy]

So he’s moved out of gambling.

[Sue]

Well, I guess that hasn’t done so well, has it really?

[Jimmy]

But I was listening to somebody on the radio the other day and they were talking about how they’re still building houses on the outer suburbs and not building any infrastructure. You know, roads, yeah, it might be near a railway station, it might be near a highway, but they’re saying things like they’re not building communities. They are not building shops and clubs and sports facilities.

And they were saying this actually undermines the social cohesion of the whole city. And this is where apartment blocks come into their own, because if you build an apartment block, somebody will open a shop, somebody will open a club, somebody will open a gym. And they’re talking about that casual social interaction.

It’s the thing where you walk down the street and you see somebody that you might see once a week and you say hello and that’s it. But it makes you feel part of the community. So that if there is a need for a community action, you’ve already got connection with people.

They build these houses out in the suburb. They build them to the absolute limit of the space available. So you can be in a house, a separate house, and still hear the people in the house next door talking, because it’s so close.

[Sue]

Yeah. And as well, it’s a shame because in so many US cities you go and there are all these satellite housing developments with no services whatsoever. Everybody just jumps in their cars and drives to the centre, you know, where there’s a massive big supermarket, a big shopping area.

And it’s just a shame if Australia is becoming more and more like that. I mean, I always hated that about the States.

[Jimmy]

Well, there’s no, some places there’s no footpaths to walk along.

[Sue]

No, that’s right. You can’t actually go out for a walk. It’s really, really difficult.

[Jimmy]

Yeah.

[Sue]

And it’ll be a shame if we start to become, well, we have started becoming a lot more like that, but it’ll be a shame if it’s the trend that’s allowed to continue.

[Jimmy]

Yeah.

[Sue]

And environmentally, it’s terrible as well.

[Jimmy]

Oh, it’s ridiculous. I mean, look, the government is never going to say stop building houses, but they should make it, make provisions for that to the developers. I remember years and years and years ago going to Cambridge in England and there was a suburb there near a big park.

Okay, I may as well confess. I was going to a folk music festival.

[Sue]

So you weren’t going to university there then, Jimmy?

[Jimmy]

No, no. And they were building a brand new suburb of, I suppose we’d call them terraces or townhouses, and low-rise near this park. And they looked really nice, but every corner had a shop built into it.

[Sue]

Fantastic.

[Jimmy]

So they were building the corner shop.

[Sue]

Yeah.

[Jimmy]

They were building the community.

[Sue]

That’s wonderful.

[Jimmy]

We’re just not doing that here.

[Sue]

No, because from my experience as well, I come from a new town in England, which they built all these new towns after the Second World War to bring people out from London, to give them a decent life, really. And it was all just housing estates and then one town centre.

[Jimmy]

Yeah.

[Sue]

So there were very few other kind of, were there no corner shops? There were occasionally shops a long way away, a mile away. But my town that I came from has been an absolute disaster, really.

It’s just kind of a hollowed out place, really. No sense of community whatsoever. And I’ve had a cousin come over here from Britain who comes from a town very close to that.

And she said, oh my God, it’s shocking. And I thought, well, yeah, it really is horrible. So yeah, you’re quite right.

If you don’t build those community propagating tools in place, you won’t ever get a good town.

[Jimmy]

I remember at secondary school, I would admit, about 13 years old, an exercise we had to do was, how would you design a modern town? And my design was, everything was on the surface, was pedestrianised, and there were tunnels for the traffic to come in to deliver goods and park. And so it would all be really nice for everybody.

And then I visited Basildon and I realised…

[Sue]

That’s my town.

[Jimmy]

This town was designed by a 12-year-old. Because that’s pretty much what it is there.

[Sue]

Yeah, except nearly all the pedestrian ways are kind of underground. So you have to walk through these long underground tunnels, which are really quite scary and they’re full of graffiti and people, you know, drug paraphernalia. Yeah, it can be quite scary.

And there’s often nowhere to walk above ground because you’re just walking on a road.

[Jimmy]

Right.

[Sue]

So it’s not quite your vision.

[Jimmy]

They did it the wrong way round. They put the people in the tunnel and the cars on the top. And I would have put the cars in the tunnel and the people on the top.

[Sue]

Yeah, you were right there.

[Jimmy]

They should have listened to 13-year-old me. I would have fixed it. I think we’ve probably fixed enough to do with New South Wales.

Have you got any other exciting news on developments?

[Sue]

No, I guess they’re still talking about this missing middle, this medium density housing, which is fantastic, really. So as well as these big tall blocks that always grab the headlines, which we will be getting more townhouses and small apartment buildings and terraces as well in Greater Sydney. So in those outskirts that you’re talking about, and also along the central coast and Illawarra and the Shoalhaven and the Hunter.

[Jimmy]

Yeah.

[Sue]

So hopefully we’ll see a lot more of those emerging as well because obviously you can’t build a 22-storey apartment building in the middle of the Hunter Valley. And it would look awful and it would be awful, really. You have to build development that’s appropriate for the surrounding area.

[Jimmy]

Well, that’s the theory. I mean, we can see that Harry Seidler building that got…

[Sue]

Oh, in Darlinghurst.

[Jimmy]

Yeah.

[Sue]

Yeah.

[Jimmy]

Sore thumb. That’s what they should call it.

[Sue]

But then it’s done very well.

[Jimmy]

Oh, and people like it.

[Sue]

People love living there.

[Jimmy]

Yeah. But the best thing about living there is you don’t have to see it.

[Sue]

Yes, exactly.

[Jimmy]

I mean, it’s a beautiful building. As Paul Keating said, it’s a beautiful building in the wrong place.

[Sue]

Quite possibly.

[Jimmy]

Yeah. Okay. Sue, thank you very much for coming down the corridor and sharing your wisdom with us.

We’ll be back next week with more about Strata and the Flat Chat Rap. Thanks for listening.

[Sue]

Bye.

[Jimmy]

Bye. Thanks for listening to the Flat Chat Rap podcast. You’ll find links to the stories and other references on our website, flatchat.com.au. And if you haven’t already done so, you can subscribe to this podcast completely free on Apple Podcasts, Google Podcasts, Spotify, or your favorite podcatcher. Just search for Flat Chat Rap with a W, click on subscribe, and you’ll get this podcast every week without even trying. Thanks again. Talk to you again next week.

 Transcribed by TurboScribe.ai.