In Byron Bay, a coastal town at the easternmost point of mainland Australia, there are rainbow lorikeets everywhere. They fly between postcard palm trees: small blurs of yellow, red, orange, blue and green against a backdrop of cloudless skies.

It is almost too much – the colourful birds, the warm weather, the rolling hills, and of course, the Hollywood stars. Chris Hemsworth, Zac Efron and Matt Damon own property close to the town. Byron’s social media influencers – the murfers or “mum surfers”, in particular – are world famous, thanks to a profile in Vanity Fair. So potent are its charms that 2.2 million tourists visit Byron shire each year.

But the region this year earned a more sinister distinction: outside Sydney, the shire now has the highest rate of homelessness in Australia’s most populous state of New South Wales. The problem is particularly and newly acute for women.

A van parked on Jonson street in Byron Bay, NSW, Australia
A van parked on Jonson Street in Byron Bay.

During the past 18 months, the town and nearby villages that form part of Byron shire have seen an unprecedented rise in housing inequality. Between June and December last year, the average apartment rental price went up by 33%, while the house rental price increased by 66%. Over the course of the year, house prices rose 37%, as people left cities to work remotely.

In May, a “slightly intoxicated and barely dressed” real estate agent sold, over the phone, a house that even he hadn’t yet seen – for $12.5m.

Moving, packing, unpacking, cleaning, worrying

A short walk from Byron’s main beach is Byron Community Centre, its muralled walls and scruffy latticework at odds with the surrounding boutiques selling white linen and earthy homewares.

Ianna Murray is the centre’s homelessness caseworker. When we meet early on a drizzly Wednesday morning, she is making coffee and handing out sandwiches as part of the centre’s homeless breakfast.

Byron Bay has no homelessness support services beyond the centre. There is no emergency accommodation or Centrelink (Australia’s social security programme) office and there is infrequent public transport to nearby towns.

Since 2018, the number of people sleeping on the streets has increased 37%. So has the number of luxury cars, says Murray. She recently spotted a lime green Rolls Royce.

Ianna Murray, 29, a community case worker in Byron prepares coffee for the community centre’s free homeless breakfast.
Byron Community Centre community caseworker Ianna Murray prepares coffee for the homeless breakfast.

“The big joke about Byron now,” says Murray, is “Who’s going to clean your mansions?”

Louise O’Connell, the centre’s managing director, says women have been particularly hard hit. Women tend to earn less than men and have lower savings and retirement incomes. In Australia, 37% of single-parent households headed by women are living in poverty – twice the number of those headed by men.

Police estimate that 400 women are sleeping in tents and cars, says O’Connell, but the number is likely higher: women are hesitant to identify themselves as homeless because they worry their children will be taken away.

Most of those who do ask for help have never needed it before.

Cassandra Sheppard, 47, is among them. Sheppard moved to Byron five years ago for a relationship. When it broke down, she moved out – but a few months later her landlord upped the rent by $200 a week. Though Sheppard works full-time for a local social enterprise, she couldn’t afford the increase.

A sign showing where rangers patrol to help rough sleepers in Byron Bay, NSW Australia
A sign indicates where rangers patrol to help rough sleepers in Byron Bay. Photograph: Helen Sullivan/The Guardian

She struggled to find an alternative. Soon, she was sleeping in a van, then a caravan, a friend’s spare room, and another’s granny flat.

“I moved six times in one year,” she says. “I just spent my entire waking life moving, packing, unpacking, cleaning, worrying, house-hunting.” She found an apartment that, soon after she moved in, was sold; her landlord in the subsequent apartment hiked the rent by more than the raise Sheppard had recently been given.

Sheppard and her daughter are now securely housed, but her current rent swallows two-thirds of her income. She would leave, but Byron and the school and families her daughter has grown up with are vital points of stability in what has otherwise been an uncertain time. “My daughter started her school years here. This is her place and her people,” she says.

A housing market ‘gone ballistic’

“This is absolutely the worst crisis I have seen in Byron,” says Michael Lyon, acting mayor of Byron shire.

The threshold for rental stress is spending more than 30% of your income on rent. “The average in Byron is 50%,” says Lyon.

Byron council acting mayor Michael Lyon at a cafe called The Other Joint in Mullumbimby, Byron Shire,
Byron council acting mayor Michael Lyon says high rents are a huge problem in the Byron area.

Some locals blame Hollywood stars and local influencers for driving up prices. When Netflix announced recently that Byron would be the backdrop for a new reality TV show, Byron Baes, “a docusoap series following a ‘feed’ of hot Instagrammers”, there was fierce backlash from residents.

But Lyon doesn’t believe influencers and celebrities have had much of an impact on housing. The chief causes of the crisis, he says, are Airbnb, people fleeing cities to work remotely during the pandemic, and federal government policies that incentivise the purchase of second homes.

In 2020, regional property prices across Australia rose by four times the rate Australia’s capital cities did, according to property analytics firm CoreLogic.

The council is drawing up a proposal to limit Airbnb rentals to 90 days a year, which in theory will make long-term renting more attractive to owners. tracks the number of listings in major tourist cities and towns around the world. Of the 15,000 dwellings in Byron shire, more than 3,500 are listed on Airbnb. On average, these are occupied for just 19% of the year, or 73 nights. The recent and frequently booked listings are occupied for 163 nights a year.

A map created by Inside Airbnb showing Airbnb listings in Byron shire.
A map created by Inside Airbnb showing Airbnb listings in Byron shire. Photograph: Inside Airbnb

Over the summer, council undertook its regular crackdown on “van packers”, or tourists illegally camping in vans. This year, says Lyons, council workers knocked on windows to discover they were occupied by people they knew. There were women who couldn’t afford to stay, but had custody agreements that meant they weren’t allowed to leave.

Celebrities may not be the root of the problem, but the past year has seen a marked influx of wealth, says Byron shire real estate agent Alli Page, who has been working in the town of Bangalow for 18 years.

Since the start of the pandemic, sales have “gone ballistic”, she says, more so than at any other time in her career. “Very, very wealthy people don’t mind whether a house costs $6m or $12m.” Just 18 months ago the average house price was $850,000, says Page. Now it is $1.3m.

In May, Sydney hospitality billionaire Justin Hemmes bought a Byron pub formerly known as Cheeky Monkey’s – his first purchase in regional NSW – for $13m.

Thirty years of neglect

While the crisis is at a new peak, it has been building for decades. North Coast Community Housing provides social and affordable housing for people on low, very low and moderate incomes. Typically, tenants are charged 25% of their income as rent, and rest is subsidised by the state government.

Currently, the waitlist is 3,200 applicants – or five to 10 years’ long.

The not-for-profit’s CEO, John McKenna, says Byron’s private housing market is “broken”. A healthy level of rental vacancies for any given area is between 2.5 and 4%. This leaves wriggle room in the supply so that landlords don’t hold all of the power. Byron’s vacancy rate is 0.3%.

The crisis, he says, “has been caused by 30 years of neglect by successive governments”. To fix it, he believes the government needs to build at least 250 social and affordable homes a year for the next decade.

Children’s wetsuits are hung out to dry on a van parked at Byron Bay’s main beach in NSW, Australia.
Children’s wetsuits hang out to dry on a van parked at Byron Bay’s main beach. Photograph: Helen Sullivan/The Guardian

The local council has proposed a short-term solution to the crisis: building tiny houses – highly Instagrammable 25 sq m homes – for locals to live in.

“The whole living space is not much bigger than a master bedroom,” he says. “If you and I decided to live there, fine. But when people are forced to live there, I have a problem with that.”

Local developer Brandon Saul is trying to address the lack of long-term residential housing through one- and two-bedroom “pocket” apartments (his company, Habitat, also sponsors the Byron Community Centre). The smallest is 45 sq m and he has built 60 so far. They’re run entirely on solar power, come with free use of an electric car, van and bike – and holiday letting is strictly forbidden.

According to Saul, all 60 sold within two weeks of going on the market in December last year – the cheapest for $495,000. A two-bedroom apartment originally bought for $650,000 resold – five months later – for $1.3m.

The apartments are built on the edge of a two-storey complex of shops, cafes and office space. As Saul showed me around, we looked into one: it was packed, the only very busy place late on a Thursday afternoon. “Airbnb rental managers,” Saul says.

Sama Balson, who started the Womens Village Collective in Byron, at the old hospital site in Mullumbimby, which she hopes will be turned into housing for women in NSW, Australia.
Sama Balson, who started the Women’s Village Collective in Byron, at the old hospital site in Mullumbimby, which she hopes will be turned into housing for women in NSW, Australia. Photograph: Helen Sullivan/The Guardian

Having no secure housing is exhausting, says Sama Balson, who founded activist group and support network Women’s Village Collective in 2020 in response to the housing crisis. If you’re living in your car, it takes a lot of time each day to work out where to bathe, how to eat, where to go to the bathroom, where to park so that you won’t be harassed or told to leave, she says. “You’re in survival mode.”

In the Byron Bay beach parking lot one evening, a man chops onions in a van with its trunk open to the waves, children’s wetsuits drying in the disappearing sun. On the roof of another van, buskers play a guitar and sing. And in a car nearby, a middle-aged woman is fast asleep, her windows open to let the breeze through.