Letter from the editor: Public housing sell-off a painful debate
Change is underway in Millers Point as 293 properties, currently public housing supply stock for 400 residents, are being sold off to make way for private investors and buyers to snap up the offerings. While this makes sense, when looking at the blunt numbers provided by the government, it has pulled at the heartstrings of many causing a debate that's painful to read.
I've been known to use the phrase "investing is about the numbers" multiple times, and stand by it. However, property is unique as a financial choice in that it affects culture and the living conditions of those around the country.
Underestimating the role of a home in continuing family heritage and providing values is far too easy. Regularly, I see listings and stories of homes that have been in a family for decades that, upon a relative's death, are up for auction. They're regularly presented as a "once in a lifetime opportunity" and are often some of the most stunning homes. My heart aches for those that have to sell their history and memories with them. But at least this is, largely, a choice.
For those in public housing in Millers Point there is no choice, and they certainly do not appear to be going without a fight - there was a rally today at 11am, for instance. Sadly, with little of their own assets to boast of and clearly no written-down formalised rights to stay in these properties - what more can they do?
Minister for Family and Community Services, Pru Goward, publicly put out a statement regarding the high value property assets on Sydney Harbour's foreshore, that is those at Millers Point, and the subsequent reinvestment of the proceeds into social housing across the state. This logic truly cannot be argued with. The values in Millers Point have terrifyingly increased over the past years, as you can see in the suburb data here, and so it makes economical sense that 293 properties across Millers Point, Gloucester Street and the Sirius building in The Rocks were focused on for a sale.
Goward pointed to the high cost of maintenance and investment required to improve them to an 'acceptable standard' as part of the reasoning.
"Maintenance on properties in Millers Point costs more than four times the average for public housing dwellings in NSW. In the last two years alone, nearly $7 million has been spent maintaining this small number of properties. That money could have been better spent on building more social housing, or investing in the maintenance of public housing properties across the state,” Goward was cited as saying in the release.
"When the previous Government began selling off public housing in Millers Point in 2008 it let other properties here fall into disrepair. That has now left us with repair bills as high as $800,000 to restore some of these terrace houses to heritage standard."
Having jumped on to the New South Wales waiting list to have a look at what public housing contestants, because really that's what it feels like, have to deal with - I was stunned. Many areas have little remaining for certain housing stock with less than a five year waiting period. Some are waiting for even longer.
Goward points to 57,000 families on the waiting list across the state - a terrifying proposition for anyone looking to get housing soon. It must also be nerve wracking to read of the state of public housing, with the ABC reporting last year that the list of those waiting could grow by 30,000 people in three years unless changes are made to a number of aspects of the system.
Goward continued with citing the numbers of the costs of holding these properties. However, this is where the picture becomes more interesting.
“Subsidies to tenants in the last year alone reached $8.89 million, with individual tenants receiving subsidies as high as $44,000 per annum. This compares to subsidies of $8,000 per year in Campbelltown, $7,000 in Gosford, and $11,000 in Wollongong. For every subsidised tenancy in Millers Point, the Government could assist five tenants in Warrawong, or 3.5 tenants in Newcastle or Minto," she noted.
A blog post from Brown Couch, the voice of the Tenants Union of New South Wales, sheds light on another aspect to these numbers. They explain that these figures should be looked at as an accounting entry, rather than actual money spent.
The figure is created as the difference between market rent for the property, as assessed by the NSW Land and Housing Corporation, and the rent paid by the tenant, rebated according to the usual rules.
"The market rent for a property does not reflect the cost to the NSW State Government of providing housing or related services at the property. The market rent for a property can go up – and hence the 'subsidy' go up – without any change in the housing being provided at the property, or in Housing NSW's costs," the blog post explains.
"It is important to note too how much tenants have paid towards that real cost of housing. There are 409 social housing tenancies in the properties at Millers Point and The Rocks. We understand the average income-related rent paid is about $100 per week, so, over the past two years, tenants have paid about $4.25 million in rent – in other words, not quite two-thirds of the repair bill."
How this then works out on the books looking further is, as such, uncertain.
As an editor with a budget to manage, and as an everyday resident who has my own personal budgets and targets to maintain, it's logical to find the supposed drain, put a stop to it and move funds into an avenue where they will be more effective. That this makes financial sense is clear to me, despite the welcomed debate of the finer points - and the TUNSW does raise some important points. The simple situation, however, is that these are now lucrative financial assets that can be sold to funnel money back into creating more properties for those on the seemingly endless waiting list.
Goward expressed her acknowledgement that many tenants have lived in this housing for a long period of time, and the difficulties they may face moving elsewhere, but expressed her belief that this was the right decision and that a relocations team would assist the current tenants, including covering costs of moving and reconnection fees.
The fact remains that without ownership of these assets, the tenants do not have rights to them. That is how the property world works at present. Just as a tenant in a privately owned rental in the mainstream market does not have the ability to force a landlord to allow them to retain their tenancy and not to sell the home or let a different tenant live there, a public housing tenant also does not have these rights.
A letter written to the Sydney Morning Herald, shared by the TUNSW's Brown Couch blog, discussed the culture of the area.
"I grew up in a terrace in Lower fort street and my mum still lives there as she has done so for 40 years, laboriously maintaining and restoring her home (largely herself). Even if she is forced to move away, that house will always be our family home and the fact that she doesn't own it does not make that connection or the emotional distress any less valid," the letter is quoted as saying.
It notes that the letter received by her mother said that attempts would be made to relocate her close to her family and friends.
It is likely that this isn't the end. The Herald also recently reported that Glebe, Redfern and Kirribilli are the next sites that could face similar treatment.
Just yesterday, State MP Alex Greenwich slammed the decision as a form of 'social cleansing', and I have read references from a number of different individuals who declare she's ruining the culture on purpose for the property bigwigs in Millers Point and other city locations. These claims are currently unfounded, and when looking at the pure mathematics it makes sense to direct funds where they can have the biggest benefit for the greatest number of people. Of course this isn't just about maths. However, sadly, providing roofs over the heads of the needy at some point needs to trump the heart-wrenching, and they are truly hard to read, discussions of individuals' connections to an area.
It's a situation that is tearing many in two as the best decision is argued out - progress and the situation of the masses versus culture and the individual stories of those residents, and it's certain that someone was always going to leave the debate unhappy. But we need to remember that there are the stories of 57,000 or so others on the waiting list that are likely to be just as awful to read.