Granny flats go onto the rental market as SA overrules councils

Earlier in the month, the minister penned a letter to the State Planning Commission urging changes to the state planning practice directions to stop councils from being allowed to limit the leasing of ancillary dwellings to only immediate family members.

At its meeting on 5 October 2023, the commission subsequently approved the changes. Councils can no longer impose restrictions on who can rent ancillary accommodation as of Friday, 13 October. The Planning Commission is also amending its regulations to ensure that council-imposed conditions on existing ancillary dwellings that prevent their lease to non-family members will not be able to be enforced.

The state estimates the change could see hundreds of new properties make their way onto the long-term rental market at a time when vacancy rates around the state remain extremely tight. Domain recently reported that Adelaide’s vacancy rate remains close to a record low, currently sitting at 0.3 per cent.

No other rules within the state prohibit the leasing of a granny flat to tenants outside of the immediate family, but the Consumer and Business Affairs Minister Andrea Michaels has signalled her intention to pursue an amendment to the state’s Residential Tenancies Act to clearly state that granny flats can be rented out to non-family members.

Since the Planning and Design Code was introduced in 2021, records indicated that 362 ancillary dwellings were approved for development in the Greater Adelaide region. Many of these routinely included conditions that they not be let to anyone other than a dependent.

South Australia’s move follows similar changes that were made in the Northern Territory in 2014, Tasmania in January 2022 and Queensland in September 2022, to allow the wider leasing of granny flats.

Ancillary dwellings are able to be rented privately in Western Australia, NSW and the ACT, while Victoria still limits rentals to immediate family.

Mr Champion said that removing the “arbitrary restriction” would unlock “critical additional supply”. He added that the government is pulling every lever at its disposal to confront the housing crisis.

“This type of accommodation plays an important role in helping families care for relatives, but we want to give property owners the opportunity to offer it to the broader community to support more South Australians,” he said.

“This reform makes it crystal clear that ancillary dwellings can be an affordable rental option with minimum housing standards in place,” Mr Champion added.

Moreover, Ms Michaels concurred that the government is taking its responsibility to explore all avenues for unlocking housing supply seriously.

“With a vacancy rate of less than 1 per cent in South Australia, housing insecurity is a real concern for many South Australian tenants, and these reforms will provide another option for people struggling to find a rental home,” she said.