Short stay accommodation providers have avoided an extra hit to their hip pocket after Wagga councillors voted against the introduction of a new fee this week.
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Council unanimously rejected establishing a housing trust to fund affordable housing at its fortnightly meeting on Monday.
Council received a report in response to a notice of motion by Councillor Richard Foley, which saw councillors called for a report on the impact of Airbnb and other short stay accommodation on the local rental market back in January.
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That motion also revived a February 2021 notice of motion on evaluating the creation of a housing trust for affordable housing in the Wagga LGA.
On Monday night, Councillor Richard Foley told the chamber Airbnb-style accommodation are "causing great harm to communities, affecting housing affordability and availability."
He went as far as to say "if there was no Airbnb, there wouldn't be... people desperately looking for a place to rent."
Council's director of regional activation John Sidgwick said the key point of the report was "for councillors to understand the impact Airbnb and short stay accommodation has on constraining the rental markets in Wagga."
"Cr Foley... is concerned people are struggling to find rentals and that is pushing them down the housing ladder into other less-attractive forms of [accommodation]," Mr Sidgwick said.
During a visit to Wagga last week, CEO of the state's peak real estate body Regional Institute of NSW (REINSW) Tim McKibbin said the rental market was bleeding homes to short stay accommodation amid increasingly onerous regulations being placed on property investors.
In September, the Riverina region scored the worst vacancy rate in the state with just 1 per cent of homes on the rental market available to renters.
Mr Sigdwick said in preparing the report on the viability of a housing trust, staff found only a "very small number" of Airbnb-style accommodation hosted in Wagga - 262 to be exact.
"That is only 1 per cent of our market," he said.
He said staff then "took a notional figure of a cost to levy to those Airbnbs if you wanted to create a housing trust... [arriving at] a fairly nominal fee of $150,000-$250,000 per year which could go towards [a housing trust]."
The Victorian government has already established a 7.5 per cent levy and Mr Sidgwick said staff recommended no action should be taken in Wagga until the outcome of debate on a similar levy in NSW.
Further, council's final motion noted any Wagga LGA specific levy or fee would have a "limited impact on housing supply or yield limited new net revenue which could be directed at housing initiatives."
Council staff also warned a levy of this sort could have "unintended consequences" on key sectors of the Wagga economy.
Council also agreed to write to state and federal governments for a detailed review of the impacts of short stay accommodation on housing supply - with a specific focus on the differing market conditions and impacts on large inland regional cities such as Wagga.
Council will also call on both governments to push for a rapid increase of public housing in Wagga and ask for an update on Wagga's housing budget allocations for the 2023-2026 period, along with buy to rent schemes.
Council is also currently developing its Wagga Housing Strategy, which quantifies the current housing deficit and how council actions could assist in helping other sectors deliver and close the housing supply gap.
While councillors ruled out a short stay fee for now, they left the door open to put one in place in the future with Cr Amelia Parkins moving an amendment to delete a phrase which would have seen the council rule out establishing the housing trust at all.
Councillor Georgie Davies was absent during the discussion and vote on the recommendation due to a conflict of interest.
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