Landlords who rent out their properties through Airbnb and other short-term accommodation platforms are expected to pay higher municipal rates, the deputy mayor of Hobart said.

A motion proposed by Cr Helen Burnet, which is expected to be voted on at tonight’s council meeting, would see an urgent report prepared to determine whether specific council rates should be applied to whole house visitor accommodation and vacant lots zoned as residential.

Cr Burnet said the introduction of different levels of council rates depending on the use of the property could help ease Hobart’s rental crisis.

“We know that Hobart has one of the tightest residential rental availability issues in Australia and we know that rental affordability and even housing affordability is skyrocketing which makes it all the more difficult for people to not just move to Hobart but to stay in Hobart,” she said.

According to council statistics, 481 houses have been approved for use as visitor accommodation, 41 of which were approved in the six months to December 31 last year.

Most visitor accommodation properties are in Sandy Bay (129), with 84 in Hobart and 50 in Battery Point.

“There are not many levers that the city of Hobart can use [to encourage affordable rentals] but we can consider differential rates, not only for short-term visitor accommodation, but also for land that is zoned residential but has been left vacant with no houses on it,” Cr Burnet said.

For Cr Burnet’s proposal to take effect, the State Assessor General would also need to establish a specific category for accommodation for short-stay visitors, so that differential rates could be applied.

“I know the Break O’Day Council has a motion to [the Local Government Association of Tasmania] pushing for this change because they too have the same kind of issues with providing rental accommodation for people to live in their municipality so this is not just an isolated issue for Hobart,” said Cr Burnett.

Are short stay properties “commercial”?

The chief executive of the Tourism Industry Council of Tasmania, Luke Martin, said the change could happen without altering the rating system by simply zoning short-term accommodation as commercial properties rather than residential.

“The reality is that Hobart and most of the councils are now applying commercial rates to commercial accommodation businesses and clearly if you are running a short term accommodation business whatever platform you are using to sell your room, you would have to pay the same as everyone else in the market,” he said.

“And that’s been a long-term industry frustration, we already have hosting companies working five minutes away paying commercial rates which are inherently higher than residential rates.

The general affairs director of short-term holiday rental provider Stayz, Eacham Curry, said he understood the council wanted to take a closer look at variable rates, but urged it to look into a Commonwealth investigation into the affordability and housing supply before taking any action.

He cautioned against charging short-term accommodation providers commercial rates.

“We caution against taking a blanket approach to these things,” he said.

“We welcome a conversation where the short-term rental industry has a contribution to make to the cost of administration, particularly local government, but I’m not sure a general determination that it’s is commercial be the solution.”

A vacant lot targeted by a tax hike

In the council’s response to the motion, he said owners of vacant properties had “little incentive” to develop the land under the current grading system, as they did not pay waste management service fees or did not contribute to the landfill rehabilitation tax.

He said the review of rates applied to vacant residential land, which are charged at higher rates by some Australian councils, should be part of the council’s review of its rating and valuation strategy, which is currently in progress.

Last year, the council voted to consider banning the conversion of entire houses into short-term accommodation in certain areas.

The vote was criticized by Stayz, who said the regulations would hurt the state’s tourism capacity.