Prime position: Housing commission flats in The Rocks.

Prime position: Housing commission flats in The Rocks. Photo: Steve Lunam

The Herald understands the concerns of public housing tenants who have learnt of the O'Farrell government's plans to sell the inner Sydney properties they call home. While the government's approach has been less than compassionate, its underlying strategy is justified.

The plan is to use substantial proceeds from any sales at Millers Point, Gloucester Street and The Rocks - with others likely in Redfern, Glebe and Kirribilli - to provide more and better subsidised accommodation across the state.

By placing strict conditions on purchasers, staggering the sales and redoubling efforts towards more affordable housing, heritage values can be preserved and community upheaval minimised.

Many public housing tenants in the inner city are among the state's neediest, even though they live in a highly sought-after location.


By contrast, there are many families across the state who have been on the 57,000-strong public housing waiting list for up to 10 years, struggling to make ends meet, relying on welfare, crammed into share housing or living on the streets.

Those who are in public housing elsewhere have to tolerate rundown properties. Shifting from house to house and area to area is commonplace.

Governments should aim to scatter more public and affordable housing throughout the city and all suburbs. We need a mix of socio-economic groups in every community. Yet 64 per cent of occupied dwellings in Millers Point are social housing. The government's aim is 30 per cent for community cohesion.

Yes, it seems convenient that the government is building on its Labor predecessor's Millers Point plans just as construction of the casino-hotel at nearby Barangaroo gathers pace.

But the cost to taxpayers for the upkeep of the old and often unsafe inner Sydney public housing is unsustainable.

The public housing system is bleeding cash. Supply is being curtailed just as demand rises due to high private rents, with home ownership increasingly out of reach.

The huge prices on offer for inner city properties present a timely opportunity. A social impact study found the proceeds from selling the 293 public housing properties in Millers Point would fund replacement dwellings for all of them on Land and Housing Corporation land plus an additional 454 dwellings.

The transition out of Millers Point will be difficult for the 20 per cent of tenants who have been there for more than 20 years.

The social impact study found about a dozen families had multi-generational links there - some through inherited tenancies tied to earlier sales of dock-worker cottages to the government.

But an estimated 45 per cent of public housing tenants in Millers Point have lived there for less than 10 years. Moving for them is likely to be less painful and more in step with the frequent moves of private renters.

There should be no sense of entitlement and ownership in public housing. In most cases it should only be temporary. Granted, almost half the Millers Point community is over 60. But housing there is by and large not suitable for those among the ageing and the invalid with special needs.

That's why the sell-off has to be managed carefully. Sales should be staggered to avoid depressing the prices. The empty and most derelict properties should go first. As the elderly move to nursing homes or pass away, more properties can be sold. Tenants with long-term ties to the area should be allowed to stay longest.

While all the proceeds of sales must be dedicated to the statewide public housing system as the government has promised, a small percentage should be set aside to fund a limited number of inner city public housing dwellings.

Sadly, those public housing tenants who shift to the private market to stay in the city will find only 1 per cent of dwellings are regarded as affordable.

That only places even greater pressure on the O'Farrell government to work with the City of Sydney to find solutions. The current NSW parliamentary committee inquiry into social housing reforms is a good place to look.