Residents fear becoming homeless as the developers of the contentious Smiths Beach resort and village are seeking to build a hybrid hotel in the Margaret River town centre. The multi-million dollar Fearn Avenue plan, reported by the Times last week, would seek approval from WA’s Joint Development Assessment Panel to redevelop six rammed earth homes as part of a three-storey, 32-room mixed-use project designed to be “Australia’s first net-positive circular hotel”. But renters in those homes are distraught that they will be looking for new homes amid an unprecedented housing crisis gripping the region. Residents also had concerns the project would advance without providing sufficient space for guests and visitors to park — similar to what was allowed last year for the now-stalled redevelopment of the Margaret River Hotel. Residents as well as housing advocacy group Just Home concerned about future planning for the region, which confirms results of the Shire’s community survey that had the local government panned for failing to respond adequately to growth and population pressure. Just Home program manager Alex Hughes said more short-stay accommodation was part of the problem, not the answer. The housing group urged authorities not to back the Fini project. “I don’t think it’s the way forward. We need to create more stable options for people,” Mr Hughes said. “We are a tourist town. We have a lot of casual workforce and low-income earners who keep the town running. “The wineries need people, the restaurants need people, the hotels need people. If we don’t have affordable, low-cost, or social housing for those people to live in, that whole thing falls over.” Fearn Avenue resident Lisa Cloud, who is now looking for a new home, told the ABC she was distraught at learning news of the hotel project. “We’re struggling through a rental crisis here and the idea is to displace so many people and families in these six units in order to build more short-term accommodation,” she said. Fellow resident Sarina Kamini just spent six months facing housing stress before finding a new home in the town centre. “I’m desperately sorry for those Fearn Avenue families whose homes are now subject to hotel development,” Ms Kamini said. “And I’m confused by a local government that has policy allowing approval for commercial development of existing residential housing. “The mark of a community is in how it cares for its people. It’s a falsity to continue selling our region into the world as a place of beauty if we’re not addressing that.” A spokesperson for developers Fini said construction was at least 12 months away, depending on approvals, and tenants would be kept informed. “The parking strategy represents leading-practice sustainability by maximising use of existing infrastructure, minimising resource use, preserving trees and vegetation on the site, and respecting the topography,” the spokesperson said. They said project was led by the latest sustainability principles set to become “the first “new normal’ project in WA” and would “create a new benchmark in sustainability as a carbon net-positive development,” helping to activate the town centre, and create a quality tourism asset for the region.