Rental crisis sees regional businesses providing homes and hotels for workers
- by Admin
- June 4, 2024
Businesses in regional Western Australia are calling for increased housing availability, with employers and community groups forced to build homes in order to attract staff.
In May, there were five houses available for rent in the town of Northam, 100 kilometres east of Perth, carrying price tags of up to $560 per week, according to the Real Estate Institute of Western Australia (REIWA).
Two bedrooms in a share situation were also advertised, for $190 per week respectively.
A number of employers, including local car dealership Avon Valley Toyota, used the 2024 Wheatbelt Futures Forum to raise concerns with policymakers, saying they were unable to obtain adequately qualified staff to their businesses due to lack of housing.
Avon Valley Motor Group dealer principal Leonie Knipe said her business is considering building its own houses in order to continue hiring staff and keep up with demand.
Mrs Knipe noted that housing had now become a “business owners’ business”, despite it never previously being the case.
“In the past, if people were moving here for a job, they just found a rental, and then if they liked it here, they then went and bought a house,” she said.
“Housing wasn’t ever a conversation I had with my staff.
“I didn’t have to think about where they were living — they just showed up to work every day.”
The car yard and dealership owner said she had begun investigating building houses next to her business to offer subsidised housing to her staff, or incentives to move to the region.
“In the last two months I have lost four staff members as a direct result of unreliable housing,” Mrs Knipe said.
“We are struggling to fill their positions locally and have another three or four jobs advertised where applicants would be needing houses.
“It has got to the point where I am now working off the old adage of ‘build it and they will come’.”
Mrs Knipe said this was not an option for many small business owners in the region who were already impacted by rising costs associated with running a business.
She believes the state government needs to invest in housing for government workers instead of relying on an already scarce property market.
“The state government itself is putting a lot of pressure on the retail housing market, in terms of housing their own employees,” she said.
“We need doctors and teachers in our regions but I really think we should get back to the old model where the government actually built their own houses for their workers instead of renting a house in a market that is already struggling.”
Collie hotel restoration to house workers
Further south in Collie, a medicinal cannabis company has taken the issue into its own hands with the purchase of a hotel to house its growing workforce.
Cannaponics founder Rod Zakostelsky said when they initially purchased 64 hectares of land in Collie for growing cannabis about four years ago, they were planning to build a worker camp on-site.
But he said the shire rejected this idea due to zoning issues.
“I thought to myself, ‘well, what are we going to do?'” Mr Zakostelsky recalled.
“We’re going to build this massive facility, we know that there’s a massive housing crisis here. All the motels and hotels are completely full pretty much seven days a week, for the next two or three years.”
He was in a doctor’s waiting room late last year when, on a whim, he plugged “accommodation, clubs, motels for sale in Collie” into a search engine.
The Club Hotel Collie — built in 1901 and boasting three bars, one bottle shop and 21 rooms — was up for sale.
He put an offer in two days later, ultimately purchasing the 6,000 square metre property for about $550,000.
“Our future budget for accommodation costs for the company was around about $1.7 million from last year to our first year of production, which will start early next year,” Mr Zakostelsky said.
“So we thought, ‘well, why are we wasting money housing construction workers and also future staff? Let’s put that money into an income producing asset.’
“And the hotel at the moment, it’s on track to turn over nearly $4 million in revenue.”
Within nine weeks of purchase, Mr Zakostelsky said, Cannaponics had paid back every cent it had borrowed from shareholders and started delivering returns through revenue from the pub’s rooms, bottle shop and bar.
“So essentially, this property has been purchased free of charge, but all shareholders of our company now own an asset. And now Cannaponics is not pre-revenue anymore,” he said.
Some of the company’s roughly 20-strong full-time and casual workforce have already started using a few of the rooms — including Mr Zakostelsky himself, who splits his time between Collie and Perth.
He said about a dozen more rooms would be refurbished by the end of 2024, when Cannaponics is expected to have about 40 workers on the books, ahead of cannabis production kicking off in earnest next year.
Foundation to create worker housing
Members of the volunteer-run, not-for-profit organisation Avon Community Development Foundation (ACDF) have made it their mission to alleviate housing market pressures for employers looking to house their workers, with the creation of Mortlock Gardens, an 18-villa development.
Opened in 2017, the precinct was reserved for tenants working within the region who did not own property within 80 kilometres of the Northam township.
Since its inception, the villas have maintained 100 per cent occupancy rates, with a waiting list that board members describe as “as long as your arm”.
Increasing concerns from local business owners have encouraged the ACDF to expand its offerings, with plans to develop an additional 20 units on land adjoining the already existing villas.
However, the development of stage two of Mortlock Gardens has not been without its challenges.
ACDF chair Phil Eaton said barriers from the state government had prolonged the process.
“It’s been a long road — for years, we’ve been trying to remove a caveat that the Department of Communities had over a portion of land right next door to stage one,” he said.
Concerns surrounding the caveat were raised by Mr Eaton at the 2023 Wheatbelt Futures Forum.
The Parliamentary Secretary to the Deputy Premier Jessica Shaw said she was not familiar with the project but would raise it with the State Minister for Community Services Sabine Winton for clarification and advocacy.
The caveat was then lifted in March 2024 following the signing of a memorandum of understanding between the Department of Communities and ACDF.
Mr Eaton said the success of stage one of Mortlock Gardens indicated the need for additional investment into worker housing in the region, which created overwhelming benefits for the Wheatbelt.
“Just talking to various business people around town, they’re saying bring it on, because we need accommodation for workers,” he said.
“These are employers spanning from health, construction to everyday workers — the type of work is just so wide and varied.
“Living so close to Perth, commuting without living locally is a bit like people doing FIFO, they don’t get to commit to the community.
“Whereas, if these workers are coming to Northam and living in Northam, they become part of the community.
“They play sport here, they shop here, they get to mingle, they become part of the community.”
The first four villas as part of stage two for Mortlock Gardens are due to be completed by the end of 2024, with the remaining 16 villas to begin work soon after.
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