A probe into the housing crisis on Friday will hear that a surge in homes being converted into holiday rentals has left workers unable to move to new areas due to a lack of long-term rental options.
More than 165,000 homes across Australia are now used for unhosted short-term rentals, but the average listing in Sydney sits empty 80 per cent of the year, Unions NSW says.
Secretary Mark Morey cited a recent case where a teacher knocked back a job in the winery town of Mudgee after failing to find a suitable home.
"All that was available was short term rental," he told AAP.
"It's the same up and down the coast.
"People who are starting out or providing essential services ... are just not getting access to the areas where they need to be."
On top of hitting workers, the impact was felt in the wider community dependent on those services, he said.
"It's detracting from those communities ... a lot of the social cohesion disappears because you've got all these empty houses within communities," Mr Morey said.
"The priorities are wrong."
He backed taxing holiday rentals such as Airbnbs to increase the incentive for investors to re-enter the long-term rental market.
Byron Bay's 60-day cap for most unhosted holiday rentals, introduced in October, also needed to be rolled out statewide.
Victoria in January introduced a 7.5 per cent tax on all short-term rental bookings under a month.
Dozens of homelessness and community organisations say any tax introduced in NSW should at least match Victoria's.
Airbnb has previously said such taxes risked the significant economic benefits that short-term rentals brought to towns and poses "a long-term threat to the tourism industry".
"There is no evidence to suggest that these measures improve rental availability or affordability," it told hosts in August.
The NSW inquiry into essential worker housing on Thursday heard one of the fastest-growing areas in Australia could no longer offer affordable housing options for a diverse range of social groups.
Blacktown City said it had been experiencing an increase in housing stress, with occupants spending a significant proportion (more than 30 per cent) of their income on mortgage or rental payments.
Meanwhile, an expert on the UK's essential worker housing policy expressed caution about a popular policy recently adopted widely in Australia.
Shared equity schemes involve governments taking minority stakes in homes, providing a huge boost in purchasing power for single parents and eligible workers seeking a forever home.
"They offer flexibility but we don't want to unintentionally inflate demand without addressing underlying supply issues," Professor Nicky Morrison told the inquiry.
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