Will an Airbnb Tax Solve Australia’s Housing Crisis?

Disclaimer: I’m an Airbnb simp. I love waking up near strange beaches in strange beds. I love avoiding hotels. I love scrolling the app, planning holidays I’ll never go on.  

However, despite all of this, I know that Airbnbs might be harming Australia. This is because they’re somewhat exacerbating our housing crisis. 

As you probs know, Australia’s real estate market is munted. Over the last year, the price of capital apartment rentals have risen by 22.2%. Meanwhile, property prices are also beginning to rise once again. As it stands, there are too many people needing a house and not enough homes on the market. 

Which brings us to Airbnb. These homes can’t be bought or rented long-term. Such places are constricting the rental market and inflating the price of some joints.

This has led some councils to announce that they might create Airbnb taxes. These taxes would be used to dissuade folks from advertising their homes on such apps. 

Take, for instance, Melbourne’s Yarra Council. This council is thinking about creating a medium-term Airbnb tax. The money from this tax will be used to support an emergency rental fund.

Yarra consists of Abbotsford, Collingwood, Fitzroy, and Richmond, just to name a few suburbs. In March of this year, 1608 Airbnb properties were available in this region. 

Meanwhile, other local councils have considered banning Airbnbs altogether. In 2021, Victoria’s Colac Otway Shire was one such region. At this time, 70% of their Apollo Bay homes were empty during winter.

On 8 June, 109 Airbnbs were available in Apollo Bay at the start of July.

An Airbnb Tax: Will It Help?

In theory, Airbnb taxes are a great short-term solution. They’ll dissuade people from keeping their Airbnbs open, which may increase the number of houses on the market. And if there are more houses on the market, the price of these bad boys will drop. This is just simple economics. 

What’s more, putting these tax dollars towards financing emergency rental funds is genius. This would mean that some people who can’t pay their rent won’t become homeless.

However, Airbnb taxes aren’t a silver bullet. They won’t fix our housing crisis. We’ll need more robust systems in place.

According to The University of Queensland’s Dorina Pojani, some colossal changes will need to happen to mend our housing system. Pojani is an Associate Professor in Urban Planning. 

“Australian society should come to share an understanding that a dwelling is a space needed for living,” said Pojani. “It is not a vehicle to store and showcase wealth and extract excessive rents from the ‘houseless.’ Nor is its purpose to sustain class divisions from one generation to the next.”

To end Australia’s housing crisis, Pojani stated that we need rent caps, more student housing, and higher taxes on investment properties. However, the chance of such policies being embraced by our governments is slim.

Airbnb’s Response to a New Tax

Speaking to The Latch, Airbnb echoed some of Pojani’s points.

As Michael Crosby, Airbnb’s Head of Public Policy in Australia and New Zealand, told us that the company isn’t the root of our housing crisis.

“Housing affordability is a challenging and complicated issue not just for people and communities, but also governments genuinely looking to tackle this policy challenge,” Crosby said.

“The causes differ from place to place, with legacy factors — which often pre-date the founding of Airbnb by decades — ranging from the supply of new homes, the ratio of public housing, the number of empty dwellings and rooms, interest rates, and broader economic conditions.”

However, just because Airbnb didn’t cause this catastrophe, that doesn’t mean they’re against tax-adjacent regulations. In fact, they have already suggested some ways the industry could be altered.

Crosby said, “Neither Airbnb nor our Host community is opposed to short-term rentals being regulated, and we support the introduction of statewide frameworks — which includes registration and a code of conduct — rather than the potential for many different approaches to the same policy issues across Victoria’s 79 local councils.”

“Late last year, Airbnb proposed a series of measures that will help build stronger communities, foster sustainable tourism growth, and equip governments across Australia with tools to help address important issues, such as housing affordability and amenity.”

So, what are these measures? Well, Airbnb has suggested that all homestay companies disclose their listing numbers. This means that our governments will know which areas have homestay density issues. 

Additionally, Airbnb has proposed that opt-in tourism levies are put in place across Australia. The money from these levies will then be used to fund community infrastructure projects.

According to Crosby, “Airbnb is committed to working with the state and territory governments to establish a sustainable tourism levy applied to all accommodation providers and could be opted in to by local governments.”

Related: I Tried Swimply App, the ‘Airbnb for Pools’, in Australia

Related: Is Australia’s Rental Market Improving? Or It Still a Throne of Garbage?

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