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Rick Morton on how governments and developers are exacerbating the housing crisis in Australia - and what it means for people who need a place to live.

The end of public housing in Australia

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All across the country, waitlists for public housing are on the rise.

In NSW alone, there are more than 50,000 families in need of affordable housing. Some families will be waiting for five to 10 years to be housed.

In the meantime, state governments are selling off public housing estates to developers - doing nothing to reduce these ballooning waitlists.

Today, Rick Morton on how governments and developers are exacerbating the housing crisis in Australia - and what it means for people who need a place to live.

 

Guest: Senior Reporter for The Saturday Paper, Rick Morton.

 

This episode features excerpts from the 1981 documentary ‘Waterloo’ directed by Tom Zubrycki.

 
Read Transcript

[Theme Music Starts]

RUBY:
From Schwartz Media, I’m Ruby Jones, this is 7am.

Across the country, waitlists for public housing are on the rise. 

In NSW alone, there are more than 50,000 people in need of affordable housing. Some will be waiting up to 10 years. 

In the meantime, state governments are selling off public housing estates to developers - doing next to nothing to reduce these waitlists. 

Today, senior reporter for The Saturday Paper Rick Morton on how governments and developers are exacerbating the housing crisis in Australia - and what that means for people who need a place to live.

It’s Thursday, March 10. 

[Theme Music Ends]

RUBY:
Rick you've been looking into the state of public housing in Australia in particular, though, you've been looking at Waterloo Estate, which is this housing block in Sydney. Can you tell me a bit more about the estate itself and why it is? You've been interested in what's been happening there?

##RICK:
Yeah. So the Waterloo estate is a kind of a twin 30 story public housing development that houses over 2500 residents in the heart of Sydney.

Archival tape:
“The Housing Commission of New South Wales, concerned with the displacement of low income earners from inner city areas, has announced plans for another public housing project in the inner Sydney suburb of Waterloo.”

RICK:
And the buildings were officially opened by Queen Elizabeth and Prince Philip in the 1970s. 

Archival tape:
“The Queen - the Queen, yes - came to open 32 storey high rise tower blocks for the aged, which had not long been completed.”

RICK:
Now, at the time that they were opened, Waterloo was the working class suburb.

Archival tape:
“Over the past 25 years, redevelopment with public housing has brought back vigorous new life to this decaying old suburb…”

RICK:
But in the decade since, it has dramatically changed. It's become a very wealthy suburb. Rents and house prices have ballooned there over the last three years, far above the national average. 

But all throughout this, despite the estate in Waterloo becoming extraordinarily valuable, the public housing towers have remained providing affordable housing to thousands of tenants since the 1970s. And, you know, because it is social housing, the rents are capped, so they're not going up and they're subsidised by the New South Wales state government. Whereas, you know, private market rents have tripled, quadrupled or risen even further than that. 

So, you know, the reason I've been writing about this and about the Waterloo estate specifically is because of what happened in 2015. The residents of the estate received a letter from the state government which detailed a plan to sell the land and redevelop the site, and that was pretty shocking news for a lot of people.

RUBY:
Mmm. OK. And so what was it exactly that that letter outlined? What was the proposal for this site?

RICK:
Basically, the state government wanted to knock down and rebuild the entire site. 

Now, originally, the local council, the City of Sydney, was the project lead on this development. Now they come up with this master plan and in that plan, the redevelopment would still have a lot of social and affordable housing. 70 per percent of it would in fact be of that kind. And because it was a redevelopment that would actually be a lot more dwellings than is currently available on the site because they're going to increase the density. 

But then somewhere along the way, that all changed. And now the plan that the state government is going with, does not have 70 per cent social housing. It's actually much closer to 30 per cent social housing.

RUBY:
Right. OK, so it seems like it's flipped, Rick. So how is that possible? How does a redevelopment as big as this go from promising to be majority affordable housing, it's to really the reverse.

RICK:
It's essentially because the state government doesn't want to pay any money, and so they decided that the council’s 70 percent plan wasn't feasible. Now that's because it would cost the state government money. We're talking hundreds of millions of dollars here to increase the number of social dwellings on that site, as well as introducing some affordable housing, which is where the kind of the rents are 20 percent below market rate. So there's two different types of housing. But the state government didn't want to put any money in. That was their constraint on the project. They wanted it to be budget neutral. 

And the reason why they can do it budget neutrally with 70 percent or 64 percent private housing is because they're selling it off to developers and they will pay for the very modest increase in social houses under their plan. 

So that's the situation at Waterloo, but we're seeing versions of this play out across New South Wales and the rest of the country too. You know, the model, particularly in New South Wales, is taking land parcels already owned as public housing and increasing the density of them that I can get more houses out of it squeeze more stuff out of it. But most of those extra houses are being sold to developers for the private market, and the issue with that is that it ultimately there is no substantial increase in affordable housing at all. In fact, there's fewer than 100 additional social houses on Waterloo coming out of this redevelopment proposal from the state.

RUBY:
Mmm. OK, so essentially what's happening then, Rick, is that we have State owned land with affordable or public housing built on it, being sold off to developers. And sometimes, like in the case of Waterloo, there has been talk of increasing the capacity of these redevelopment so that there would be more affordable housing for all of those people who who still need it. But ultimately, it seems like in the case of Waterloo, that actually isn't eventuating. So what does that mean, then, for the people who actually who need somewhere to live?

RICK:
Well, it means that, you know, these redevelopments are doing nothing to relieve pressure on the public housing waitlist 

Archival tape -- ABC 730 Covid recession social housing reporter:
“Before the COVID 19 recession, there were 200,000 people already waiting for social housing. That figure is only expected to rise.”  

RICK:
Now in New South Wales, there are approximately 55000 people on that waitlist.

Archival tape -- ABC PM social housing crisis reporter:
“New South Wales faces the biggest shortfall in social housing and projects that by 2031 there will be a need for more than 65,000 dwellings.”

RICK:
In South Australia, it's about 17000. In Victoria, it's close to 100,000 people.

Archival tape -- ABC Reporter:
“Social housing is the final safety net, protecting many Australians from homelessness, but a looming shortfall in supply could leave hundreds of thousands out on the streets.”

RICK:
And there is no plan to help them 

Archival tape -- Lisa (Vulnerable person from ABC package):
“If I don’t have a home I can’t be the person I want to be. Because there’s that uncertainty. Knowing that I would have a home - as long as I paid the rent on time - that would just be…yeah, everything.”  

RICK:
And that's really the key issue here. We're not growing the stock anywhere near the rate to reduce those waiting lists.

RUBY:
We’ll be back in a moment
 

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RUBY:
Rick, can you tell me a little bit more about how this is playing out, not just in Sydney, but across New South Wales and in the rest of Australia?

RICK:
So the Waterloo estate is really just the beginning. So in metropolitan Sydney, we've seen similar developments across 36 different suburbs. But in regional New South Wales, for example, there's the Argyle Estate in Coffs Harbour, the government is doing the same thing, so the plan there is to replace many of these kind of out of date single storey homes with small apartments, duplexes and terraces of between two and four storeys. Again, same plan. They're increasing the density, increasing the yield of houses, but the actual increase to social dwellings is very minimal. Most of this extra density is going to the private market. 

So there are similar plans to repurpose government land in Cooma and across other regional areas in the state. In Wollongong, for example, just south of Sydney, construction is about to begin on a new residential high rise in the Central Business District, which will deliver 65 new mixed use apartments, only 18 of which will be for social housing tenants. Now, that's a very small increase on the number of social houses that were previously there under the existing old commission, but it's really a drop in the ocean. 

And there have been plenty of other examples of this across the country. It's not exactly the same model, but the ideology is the same, which is to make money by selling land to pay for the redevelopment of social housing. 

So in the Northern Territory. We've seen sites that have been redeveloped in a similar way. It's the same story in South Australia. In the last 30 years there has been a massive reduction in the public housing estate that have been sold off or demolished for private land sales. 

And one of the only places to try and reverse this trend recently has been Victoria actually had a plan to invest in public housing and at least until a few days ago.

RUBY:
Yeah. So I heard about this, Rick, the Victorian government, they were actually essentially, as I understand it, going to put a tax on new private housing developments of a certain size, and then that money would be used to invest in new public housing.

RICK:
Yeah, it's really quite a radical plan and a good plan that was due to begin in 2024. It had the tick of approval from many social housing advocacy groups. 

So, you know, essentially the Victorian government wanted and it had promised that it would actually invigorate the state's social housing stock. So doing the opposite of what the New South Wales government is doing. But to do this, and this is the kind of eternal question where's the money coming from? It was proposing a 1.75 per cent levy on the value of new housing developments, with three or more dwellings in the four biggest cities in Victoria. 

Now, that would have raised $800 million each year, and it would have been used, according to the Victorian government, to build an average of 1700 social housing units each year. Now while the government argued that the levy would affect less than 30 percent of residential planning permits. It became the subject of this quite vicious rearguard action from councils and from the property industry.

Archival tape -- Reporter:
“The property industry says they never agreed to a 1.75% tax that would have added $20,000 to the price of a new home”

Archival tape -- Developer:
“We’ve been very clear and consistent with our position since the day that this was announced. This tax was a tax on Victorian homebuyers…”

RICK:
And together they warned that it would mean that housing prices in the state would skyrocket, and that it would price people out of the market in the private market.

Archival tape -- Reporter:
“Those reforms which were part of a planning system overhaul would have taxed developers 800 million dollars a year to pay for nearly 2,000 affordable homes…”

RICK:
So last Tuesday, the state's treasurer, Tim Pallas backed down, he announced that the government had completely ditched the proposal. And he said in his own words, it's done. 

Archival tape -- Anchor: 
“The Andrews government has been forced to dump its controversial social housing tax in the wake of a fierce backlash.”

Archival tape -- Reporter:
“The Treasurer delivering a fatal blow to social housing reforms”

Archival tape -- Pallas:
“They are done, they are dusted and they are finished.”

RUBY:
So, Rick, it sounds like at least in Victoria, the state government really ended up bowing to the pressure that it felt from the property industry, and I just wonder what that says to you about how much power that industry has and how influential property developers are in Australia, not just in Victoria, but across the country, because when you think about what we're seeing. Is that really the crux of this government's making decisions that ultimately benefit developers?

RICK:
Oh God. I mean, they have policy in so many states and territories and across the Commonwealth in a vice grip. 

Because if you think about it, from day dot, when you grow up your thought this dream that you can have your house with the white picket fence and that that is the great Australian dream, right? And for a long time, that was actually kind of true. Even people on pretty low incomes could afford to buy property. Not everyone, but a lot more than can afford to do it today. 

And of course, as these kind of prices have skyrocketed, it's made investors very wealthy. It's made developers very wealthy. It's made them incredibly powerful lobbyists. And you see that in these kind of, you know what happened when Bill Shorten proposed reforms to negative gearing, which would have put billions and billions and billions of dollars back into federal coffers so they could fund service. And the industry and certain backers went to war. 

And it's the same when we're talking about social housing. There is a view that people who are relying on social housing because they've got really complex, vulnerable indicators in their own life, such as poverty and mental health, drug abuse or addiction that they don't deserve to live in some of these really nice places.  

So this is the power we kind of witness every day and we saw it again in the Victorian government campaign. They this is a government that's doing pretty well in the polls has, you know, got the backing of a lot of its constituents and it was still too scary for them to press ahead in the face of opposition from the property industry. 

RUBY:
Right, ok. And so Rick, what does all of this mean for the people who are actually living in these public housing estates that are being sold and redeveloped? What happens to the people who live at Waterloo estate right now? 

RICK:
Yeah, so the people who are living there at the moment, they will eventually, once this goes to the redevelopment, they'll be moved out while it takes place, and then they will have the first choice to come back. 

But the residents have been protesting these changes  

Archival tape -- Commission Housing Residents’ Spokesperson:
“We started off with a petition about eight months ago…”

RICK:
The issue here, the issue is the what this loss represents to the people who have made this community. You know, these have been around for 50 years and people have been living there for decades. 

Archival tape -- Commission Housing Residents’ Spokesperson:
“And at the moment, we have over 10,000 signatures in our surrounding area thanks to the support of all the residents and 4500 residents in Waterloo, four thousand four hundred and ninety nine of them signed off….”

RICK:
They and others are also arguing that public housing shouldn't be redeveloped just to hand money to property developers, with almost no consideration given to the thousands of people in the country who are desperate to find affordable housing. 

Hal Pawson at the UNSW did some analysis of this, and he was saying that there needs to be about 150,000 extra social houses, social dwellings built across Australia in the next three to five years. Now we're getting nowhere near that in New South Wales. In fact, his analysis showed that over the next three years, the net improvement to the numbers of social houses in New South Wales is going to be just 400 400 over the next three years.

And when you do the maths on the Waterloo project, we're going to see, on average, just 10 new social homes built each year over the next three decades. So this is a $1 billion estate sale that will fund just 10 extra social homes each year over the next 30 years. And that is not the solution to public housing waitlists. It's not the solution to housing affordability, it's not even the solution to it y’know, when the waitlist is 55,000 households long. 

And it's why I think, you know, we are witnessing the end of public housing as a social good as we used to know it in Australia. You know, it's very much a different model with different priorities, and those priorities are not in favour of the people living in social housing now and where we're witnessing the start of this new era.

RUBY:
Hmm. It's a sad thing to think of.

RICK:
Yeah, it's…it's just a little bit deflating, I think. 

RUBY:
Rick, thank you so much for your time.

RICK:
Thanks, Ruby.

[Advertisement]
 

RUBY:
Also in the news today

 

The Prime Minister Scott Morrison has declared that the catastrophic flooding in northern NSW is a national emergency. 

 

The declaration gives the federal government greater powers to send in defence force assets and provide financial support. 

 

And, the United States and United Kingdom have announced they will ban imports of Russian oil, as the war in Ukraine continues. 

 

The US President Joe Biden said the move targeted "the main artery of Russia's economy".

 

It comes as major global companies like CocaCola and McDonalds suspended their operations in Russia. 

 

On the ground in Ukraine, thousands of civilians have been evacuated from two areas under attack - the Northern city of Sumy and Irpin - near Kyiv.

 

I’m Ruby Jones, this is 7am, see you tomorrow. 

 

Host

Ruby Jones is an investigative journalist and host of 7am.

Guest

Rick Morton is The Saturday Paper’s senior reporter.

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