Edinburgh ‘tourist tax’ to fund 360 social rent homes with priority for homeless applicants

The levy will be used to pay the balance for the schemes, which are set to be paid for through borrowing and mainly funded by rental income from the properties, council papers revealed.

If borrowing costs for the developments end up falling, the cash left spare could also be used to buy homes on the open market, officials added.

Papers for the meeting on 2 December confirmed that the social rent homes would be primarily let to homeless households, and said this was because of requirements in Scotland’s 1987 Housing Act, amended in 2014.

The council said it would mean fewer people stranded in hotels and B&Bs used for temporary accommodation, which would then revert back to their intended use for short-term visitors.

The mid-market rent homes built with levy funding would be earmarked for people who work in the city’s tourist industry and would not have rent rises higher than these workers’ wages.

However, officials admitted that these ‘visitor economy’ roles are very broad and the definition of who would qualify for the housing is still to be confirmed.

There is also no centrally published bank of data on wage inflation in these industries to work from, they said.

While the plan to use the funding has been agreed in principle, councillors still need to sign off in February on the £286.5m borrowing for the homes, which would be paid off over the next thirty years.

Jane Meagher, leader of the council, said: “Many of those working in our city’s thriving visitor economy and cultural sectors are often unable to find affordable housing in the city, making it difficult for them to live close to where they work.

“In addition, the council has declared a housing emergency, with more and more people presenting as homeless and not enough social homes available to meet this demand, and so too many residents have to use temporary accommodation, often in B&Bs or hotels, taking vital capacity away from what should be tourist accommodation.

“That’s why it’s so important that this new funding is being committed towards a housing and tourism mitigation fund, which will be used alongside our existing investment programme for housebuilding.

“This will ensure affordable homes are available for visitor economy workers in the city and means that B&B and hotel rooms can be used for their intended purpose – to welcome visitors to Edinburgh.”