'It just makes sense': experts welcome plan to ease housing crisis but with some reservations

Article by Shirley Sinclair, Sunshine Coast News, 10 October 2022

A plan to open up granny flats to tenants other than family members has been welcomed as an immediate measure to ease the current housing crisis – but the move also comes with a warning for homeowners and renters.

The State Government has recently encouraged homeowners to rent secondary dwellings for the next three years under emergency planning changes.

This is due to the widespread crisis that also is severely affecting Sunshine Coast workers and prospective employees who are unable to find affordable accommodation close to their workplaces.

In May this year, delegates told a Sunshine Coast Housing and Homelessness Network workshop to form an “action plan” for the housing crisis that the region’s situation was so “dire” that residents “across the board”, such as nurses, emergency workers and families, had nowhere to live.

The workshop highlighted that one of the quickest solutions would be to change local and state laws that govern who could reside in granny flats and tiny houses.

Changes made by the state government to the Planning Regulation 2017, in relation to secondary dwellings, took effect on September 26.

Deputy Premier and Minister for Planning Steven Miles said the changes, suggested by stakeholders at the recent Queensland Housing Roundtable, would remove current restrictions on who could live in secondary dwellings.

Deputy Premier Steven Miles.

“Many homeowners have granny flats that they’ve built or converted for family members or teenagers who have since moved out,” Mr Miles said.

“Right now, most homeowners can’t rent secondary dwellings, such as granny flats, to anyone other than their immediate family.

“At the same time, some Queenslanders are sleeping in their cars or in tents.

“It just makes sense to allow existing accommodation to be occupied by someone other than a relative to provide more affordable accommodation for Queenslanders.

“It also allows homeowners to earn rent, helping them meet the increased cost of living.

“We can move people in to underutilised granny flats much more quickly than constructing new properties.”

Noosa Council’s Environment and Sustainable Development acting director Leo Jensen said the council and Member for Noosa Sandy Bolton had lobbied the state government for some time to review its previous stance that a secondary dwelling (granny flat) could only be occupied by a relative or close associate.

“So, we are very pleased this change has caught up with how people often use their secondary dwellings,” Mr Jensen said.

“Sometimes they are for family members but often they aren’t, and this change should provide more legitimacy and protection for both tenant and landlord.

“It should also help homeowners obtain a loan for construction and to be able to insure their property properly.”

Updated factsheets about secondary dwellings and dwelling houses to encompass the state’s changes would be released shortly, Mr Jensen said.

A spokesperson said Sunshine Coast Council also saw the announcement as a positive step to help address the current complex and nation-wide housing crisis.

“Sunshine Coast Council has been actively advocating for the state to amend the secondary dwelling and other associated definitions in preparation for our new planning scheme, and agrees it makes sense to allow secondary dwellings to be occupied by someone other than a relative,” the spokesperson said.

“In a letter sent to the Director General, Department of State Development, Infrastructure, Local Government and Planning in August 2022, council indicated that making this planning change quickly could have a significant positive effect and help alleviate some of the pressure for small dwellings being experienced in many locations across the state.”

The council spokesperson said a secondary dwelling was smaller in size and scale to the primary dwelling and shared common services such as water connection and meter, street number and letterbox, as well as vehicle access arrangements.

Updated information on how secondary dwellings can be used and developed will soon be available on the council’s website.

Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said the plan demonstrated innovative thinking to find new ways to bring more housing to the market immediately.

“It opens up new avenues to housing that are certainly much better than seeing people in our community facing homelessness or living in cars, tents, and hotel rooms,” she said.

Changes to laws surrounding who can occupy granny flats is expected to immediately help ease the current housing crisis.

“Local governments will have a better understanding of the number of existing granny flats this change is likely to affect.

“However, with vacancy rates at sub-zero percent across most parts of Queensland, we need every available property we can find to come onto the market.”

But Ms Mercorella also warned that while she encouraged innovative solutions to housing availability, consumers needed to remain protected.

“We appreciate that sometimes red tape gets in the way of creative solutions, but equally, we don’t want to see a ‘free for all’ where there’s no regulation, leaving people vulnerable to being exploited,” she said.

“For example, we don’t want people to think they can suddenly use inappropriate structures such as garden sheds or garages and pass these off as granny flats.

“This change only applies to granny flats that previously could only be rented to immediate family, and removes this restriction. Development approvals will still need to be sought from local governments for newly constructed granny flats.”

Ms Mercorella said homeowners needed to do their research on potential tax implications of granny flat rentals, such as capital gains tax at the time of the sale.

Prospective tenants also should educate themselves about their rights are, and particularly, the need for written agreements.

She said the REIQ wanted the state government to provide a suggested template agreement for that purpose.

Mr Jensen said his council defined “granny flat” as a secondary dwelling that could be an attached part of a house or self-standing structure in the back yard (such as a prefabricated tiny home).

An example of a modern granny flat. Picture: The Shed House

The Noosa Plan 2020 applies a maximum floor area of 65sqm to secondary dwellings.

Subject to a number of conditions being met, Noosa’s planning scheme permits the construction of a secondary dwelling without requiring planning approval.

“The Planning legislation states that where there is a definition inconsistency between the Planning Regulation and a local planning scheme, the Regulation will prevail to the extent of the inconsistency,” Mr Jensen said.

“So, while council will endeavour to amend its planning scheme as soon as practical, it won’t delay the change taking place out in the community.”