The Tenants' Union of Tasmania has warned the state government's Ancillary Dwelling Grants Program may add to the state's housing crisis by increasing the availability of short-term housing, after a further $2.5 million was announced for the program on Saturday.
Under the grant program, applicants will be required to lease the dwelling out to tenants for two years, but TUT principal solicitor Ben Bartl said he was concerned some investors may choose to evict the tenant and convert the ancillary dwelling into short-term accommodation after two years.
"The Ancillary Dwelling Grants Program and other initiatives of the state government to increase supply are welcome. However, our housing crisis will not be resolved for many years,"
"We believe the guidelines should be made more tenant friendly by restricting the $10,000 grant to investors who will provide lease agreements for a minimum of ten years," he said.
Mr Bartl said that while the program presented a medium to long-term fix it did little to address housing affordability in the short-term, with the demand for rentals rising while up to 2000 homes in the state sit vacant according to recent data by TasWater.
He said that the rise of short-term rental options had contributed to the current shortage of long-term rentals across the state.
Despite Launceston recording a 0.9 per cent rental vacancy rate in the last financial quarter, the demand for housing has pushed up rent and house prices, with the median house prices increasing by 49.4 per cent in 2021.
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Housing minister Guy Barnett said on Saturday the extra funding would help address the state's housing shortage by increasing rental supply, which would keep downward pressure on rents.
The $5 million program will provide 500 homeowners with a $10,000 grant to build ancillary dwellings, or granny-flats, on their property to increase the number of affordable housing in the state.
Eligible applicants are provided an initial $5,000 once building commences, and the final amount after leasing out the dwelling.
Mr Barnett said that 190 applications had already been made for the grant, and hoped to see another 310 applications in the next 12 months in order to boost the housing supply.
The demand for affordable and social housing in the state has continued to rise, with data from the department of communities showing that there are currently 4382 people waiting for social housing, an increase of 9.5 per cent from 12 months ago. Applicants are waiting an average of 66 weeks to be housed.
Mr Bartl said that although the state government has promised $1.5 billion to build 10,000 new homes over the next decade, most would not be built for at least another seven years.
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