Hospital and hospitality bosses urged to consider giving staff cheap rent

Hospital and hospitality bosses are being urged to build subsidised housing to keep staff from walking away, with Melbourne house prices tipped to surge by 2030.

Keyworkers will be given discounted rents at the Aware Super development at 50-52 Queens Rd, Melbourne.

The great Australian home dream could be dead and gone within the decade for city-based essential workers who could face a future living in houses owned by their boss.

A leading demographer has warned the long-held ideal of owning your own home is already “unattainable” for many of Melbourne’s lower-income workers, including nurses and waiters.

Demographics Group co-founder Simon Kuestenmacher said while the home dream was “built into the Australian psyche”, he is advising major employers of health and hospitality staff to build or subsidise affordable rentals for their employees in a return to a model used during Europe’s industrial revolution 200 years ago.

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“The great Australian home dream is very unattainable, to own your own home, for some careers in capital cities at this point,” Mr Kuestenmacher said.

“I’m speaking to private health companies, hospital groups, and I’m saying this (employee housing) is what you want to do.

“It might become like the titans of industry in the industrial revolution. They had to build homes for their workers to live in.”

The Demographics Group director Simon Kuestenmacher is advising major employers to consider where their employees will live in the years ahead.

It comes as projections show Melbourne’s median house price could soar to between $1.6m and $2m by 2030.

For employers the approach makes them more competitive without increasing wages, and money spent buying or building housing would likely have financial returns as property values rise.

“You could get people take up a career because of it, as people will see that they won’t make a killing — but ultimately their financial package is better,” Mr Kuestenmacher said.

“This model ensures you pay a smaller share of your income for housing and you would then, theoretically, have more money to put into your super fund. Or to buy more flat-screen TVs or red dresses.”

The InterContinental Sorrento on the Mornington Peninsula is already looking at building staff accommodation in a nearby former nursing home.

Regional tourism destinations are already embracing the concept, with backers of the Sorrento InterContinental hotel hoping to turn a former retirement village on Ocean Beach Rd into affordable accommodation.

With a peak summer pool of up to 270 staff, half of the revamped facility’s 77 beds are expected to be provided for staff working at the luxury coastal hotel, and half to key workers and staff supporting other businesses.

Backed by Trenerry Property, the Kanat Group and the wealthy Smorgon family, the about $10m refurbishment to be called Sorrento Lodge was devised amid difficulties attracting and retaining staff for the hotel.

Trenerry director Robert DiCintio said consultation with the local chamber of commerce also identified worker accommodation as a “no-brainer”.

A render showing proposed staff accommodation at the Ocean Beach Rd property.

“It’s not sustainable, nor viable, for front and back of house award-earning workers to commute three hours per day from Melbourne,” Mr DiCintio said.

However, while the plans were approved by the Mornington Peninsula Council in February, local residents objected. The Department for Energy, Water, Land and Planning convened a hearing between the two sides in October, but has yet to make a decision.

“With the State Government going into caretaker mode and a decision now further delayed, unfortunately the facility will not be able to operate during the peak summer season, which is very sad and stressful for some local businesses who had been relying on Sorrento Lodge to accommodate additional staff during the most important peak summer period,” Mr DiCintio said.

The building has 34 rooms and is expected to house up to 77 workers.

Despite planning issues, he said the firm “absolutely recommend investing in housing in regional locations as a strategy to mitigate the risk of securing enough employees to allow businesses to take advantage of peak trading periods”.

“Housing affordability and supply remains a hot-button issue in the state, and business owners must be constantly looking at ways to ensure access to staffing,” Mr DiCintio said.

Meanwhile, the Melbourne-based Deague Group flagged a new development in regional Bright would have affordable rentals built among its million-dollar addresses to help tackle staffing shortages in the popular tourist region.

A Deague Group development site planned for the edge of popular tourist town Bright will include affordable housing options to help address staff shortages in the town.

Australian super funds are also buying in — building apartment towers where key workers, including nurses, teachers and emergency services personnel will be able to rent at as much as a 20 per cent discount to the going market rate.

Aware Super chief executive Michelle McNally said the firm had been underwriting or buying homes in new developments for years, but had recently begun to build entire complexes.

“And we have talked to employers who are finding it very hard to attract and retain staff,” Ms McNally said.

A new Queens Road project by the super fund will have 350 apartments in it near the Alfred Hospital that will offer discounted rentals for “essential worker housing” when complete.

“It could be nurses, law enforcement, teachers, child and aged care workers,” she said.

While funds have long provided members with access to invest in things like airports, Ms McNally conceded it was likely more and more people’s super would give them access to a housing market they couldn’t otherwise afford in the years ahead.

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