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Valley of tears as tenants make way for Airbnb

Outrage as long-term apartment complex is repurposed to short-stay accommodation & kicks residents out amid Brisbane's chronic rental crisis

Dozens of Brisbane apartment residents claim they are being kicked out of their rental properties to make way for new Airbnbs close to the CBD.

They say the repurposing of their long-term accommodation complex to short-stay will only worsen Brisbane’s rental crisis.

Tenants at the $180-million Utopia Suites apartment building on Wickham St in Fortitude Valley, which has been operating as residential apartments for the last four years, claim they have been denied lease renewals in light of the building management now turning the apartments into short-term rentals.

The South East Queensland Union of Renters (SEQUR) claimed “hundreds” of people have been told their lease for their apartment won’t be renewed with the intention to “replace long-term apartments with Airbnbs”.

“While renters are forced to live in cars, crash on their friend’s couches, or sleep rough in parks, and thousands of others struggle to meet their needs after high rent, landlords are making a killing off the exploitation of tenants,” the union said in a Facebook post.

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The building owners recently changed the property’s name from Utopia Suites to Kooii Apartments.

A “change of use” was granted by the council in November last year to allow short-term accommodation at the apartment building in addition to existing rental properties.

On November 14 last year, Angela Bazzana, Urban Planner of the Brisbane City Council’s Planning Services North wrote to the building’s owners Sandt Developments Group, re: “Decision notice pursuant to section 83 of the Planning Act 2016.”

“I am pleased to inform you,” Ms Bazzana wrote, “that your change application has been approved as indicated in the attached decision notice.

The “Nature Of Changes” were listed as:

# Inclusion of a Short-term accommodation use to be carried out as a dual use with the existing Multiple dwelling use.

# Conditions have been amended to include a requirement for three units to remain as multiple dwellings and renumbered and updated to refer to short-term accommodation where applicable.

# Activity: Multiple Dwelling, Shop, Office, Food and Drink Outlet and Short-Term Accommodation.

The building owners are doing nothing illegal but long-term residents say the timing of the change couldn’t be worse and was causing great hardship with rental vacancies in Brisbane at an all-time low.

Advertising for the new-look Kooii Apartments says the rebranded building will be opening in March as “Brisbane’s new serviced apartment offering”.

The advertisements claim the complex will be “A living, breathing, socialising, experiencing, exhilarating destination” and that the “unexpected” was around every corner.

“Indulgence awaits at each turn,” the ads continue, “it’s all here perfectly positioned.”

The company states the apartments will be “ideal” for both leisure and business travellers, offering an “exclusive” collection of apartments for short-term stays, along with amenities such as an infinity pool, spa, sauna, gym, rooftop cinema and rooftop barbecue facilities.

Julben Serrano, the General Manager of Utopia Suites Management Pty Ltd T/A Kooii Apartments, told AccomNews: “At this stage, we prefer not to make any comment to the media as has been requested.”

However, in a prepared statement via Google, Kooii Apartments addressed the claims that residents were being forced to leave to make way for more short-term stays.

“We manage just over 200 apartments out of the 300 in the building as property managers for individual owners,” the response read.

“Some of these owners have exercised their option to put their apartments into the short-term letting pool (serviced apartments). 

“The apartment owners we represent are entitled to try to maximise their return on their investment.”

The management said they had a combination of both long and short-term rentals that they will manage into the future.

Many of the residents were quick to view their outrage, saying their apartment building was certainly no Utopia for them.

Tenant Paige Kitching told Channel 9 that she knew of at least 30 apartments in the building where the tenants had been told their leases would not be renewed and suspected the figure could grow to more than 100. One resident claimed they were given just a week’s notice to find another home.

“Someone was looking at Airbnb and they found their old apartment listed on Airbnb along with five other ones from the building,” Ms Kitching said. “it’s really putting people out; it doesn’t matter how much money you have because you’re suddenly stuck outside stranded.”

Photo by Michal Balog on Unsplash

Another resident Aaron Sadat said he faced being out on the street with his young family after the building management told him he couldn’t renew his lease for another six months because the owner was converting it to an Airbnb property.

Mr Sadat said he had been to 15 inspections for apartments in the inner-Brisbane area and at each inspection there were 40 other groups vying for the same property.

Another resident, Sarah Nixon, told Channel 7: “I’ve been here for a year and a half and I’ve just been told they’re not going to be renewing my lease.”

She has to be out by April.

“Where are we going to go?” she asked, “it’s already hard to find a rental.”

Some residents said they first learned of the changes to the building after seeing a notice on the elevator that the building would include a lot more short-term accommodation.

Another tenant, Shakira Wilson, claimed management told her she would be able to renew the lease for her apartment but “then all of a sudden” that wasn’t the case and she was told she would need to move out when her lease expires.

A post about the change to the apartment building on the Brisbane Reddit page attracted hundreds of comments from furious renters, including a number of people claiming to be among those forced out of the building.

One poster who claimed to have rented in the building since it opened said management waited until two weeks out from the end of the lease before informing them that the owner wanted to lease to a relative.

Another resident claimed his rent had gone up 20 percent in the last 18 months.

ARAMA (Australian Resident Accommodation Manager’s Association) CEO Trevor Rawnsley stressed that the building was not under a body corporate structure or a typical management rights operator and that under the law the owners could change the nature of their building and their business if given council approval.

One unit owner recently posted to Facebook in response to tenants saying the push towards Airbnb was being driven by greed.

The unit owner responded: “Whilst I do acknowledge your comment about greed it is also about rising costs in all areas of life for all people.

“I wanted to offer a different perspective from someone who rented for 14 years before purchasing so I do understand and empathise with you.

“Most people with investment properties are not multi-millionaires but mum and dad investors hoping to not rely solely on the government to support them in retirement with some form of pension or their super fund final amounts.

“The government does not want to fund people’s retirements and hence the tax offsets are set up to encourage people to invest in the economy through housing and self-fund their own retirement.

“In terms of costs the average mortgage interest repayment on a $500k loan has gone from 2.5% or roughly $1000 per month to 5.5%, $5225 per month with this cost [is] being absorbed by owners.

“This along with above CPI increases to council rates, body corp fees, insurances and water supply costs means that owners are passing on some of those increases in the form of rental increases to those coming to the end of lease periods.

“Other owners are running the gauntlet of short-term letting, hoping that they get a high occupancy rate and higher weekly rent so they can cover the rising costs.

“When you add to that the overall shortage of housing due to low volume of building through the pandemic and the return of overseas visitors/students the near-term situation does not look great.”

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