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Battlers and bulldozers

Public housing is more difficult than ever to get into and poor people are forced to rent privately, often struggling to put food on the table. Debra Jopson looks at what went wrong in the Sydney Morning Herald of August 19, 2006.

BEV DAVIS'S jungle garden so impressed the former state housing minister Andrew Refshauge when he visited her housing estate four years ago that he used Parliament to praise it. "At Minto I met Jamie Mason and his mother, Bev Davis, and saw how Jamie's disability has not stood in his way. His interest in gardening has transformed his mother's garden into an oasis, and has inspired the locals to get involved in gardening," he said.

Sadly for Davis, in the same breath Refshauge also mentioned the multimillion-dollar redevelopment which soon pushed her and Jamie out of their home of nine years.

A couple of months later Davis arrived home from her TAFE course to find her garage bulldozed. Next, her fence was demolished, along with two neighbouring townhouses. Four months later, most of the greenery Refshauge so admired was destroyed, along with the house. In all, 88 households were moved out.

The department moved Davis, 47, a mother of five studying community welfare, to Leumeah. Several days a week she takes two buses back to Minto, where she continues as chairwoman of the residents' action group. The other day, she revisited the remains of her home.

An orange jasmine and two palms - one with Jamie's name carved in the trunk - are still alive. Otherwise, the site where hundreds of people lived in the hillside precinct is a wasteland, like another precinct in the valley below which was also bulldozed. "It was heartbreaking leaving it behind. I could have been living here for the past four years," she said wistfully.

Davis and her neighbours were moved and their homes demolished, but the land remains vacant as a stark example of how public housing in NSW has been undermined by mismanagement and failed partnerships with the private sector.

The Minto estate redevelopment was meant to pioneer a new way of relieving the burden on taxpayers of housing the needy. Business people would be persuaded to put money into public housing in return for the opportunity to develop land that had become prime real estate.

Instead, the project produced two giant bald patches on the 60 hectares the Department of Housing owns there - symbols of the department's desperate financial condition and the blunders it has made attempting to sell its assets.

Minto is one of many attempts by the department to woo private sector money that have failed, faltered and, in some cases, cost the State Government millions of dollars.

Undeterred, the cash-strapped department is embarking on a multimillion-dollar spending spree to get other real estate ready for development. It hopes to get its first public-private partnership started on its Bonnyrigg estate very soon.

At the same time the department has shrunk its scope. New regulations have made it harder for poor people to get in the door. Public housing is fast becoming a refuge for the sickest and most frail, while the merely poor are being forced into squalid rentals.

MULTIMILLION-DOLLAR losses for the past 10 financial years have buffeted the Housing Department. Three years ago its annual report recorded a $280 million operating deficit. There have been about $330 million in NSW Treasury bailouts over six years.

The woes derive first from Canberra. The state's Housing Minister, Cherie Burton, says federal funding under the Commonwealth State Housing Agreement dropped by $850 million over 10 years. The Productivity Commission has put the decade-long cuts at $558 million nationally.

Whatever the cut, NSW still carries a federal debt of almost $1 billion incurred in housing loans between 1945 and 1989. The state is paying back $22 million a year. But the Government has not asked for the debt to be forgiven, Burton's office says.

The Housing Department cannot improve its financial position by raising rents. Quite the opposite. As it narrows its outlook to cater to the poorest, it only gets "market rent" from one in 10 of its households and subsidises the rest. In this, it is the most generous housing department in Australia.

The number of people paying full rent will continue to drop because from October new tenants who find work and improve their income will be kicked out of their public housing once their lease expires.

NSW has tried to plug the gushing dyke left by the federal cuts. This year, it plans to spend $270 million more than what is required under the federal-state agreement. But its dwellings are on average 25 years old and maintaining them keeps it poor. Five years ago, the state auditor found the department needed $750 million to catch up on its maintenance backlog. By last year, it had only whittled this to $606 million.

AS THE department has become poorer, so have its tenants. It has become, Burton says, "the landlord of last resort". In July, it introduced new rules which mean being poor is no longer enough to gain entry into public housing. New tenants will have to be disabled, mentally ill, with substance abuse problems, or very old and frail as well. New tenants will get two-, five- or 10-year leases and if they earn good money will be moved out.

"Literally, public housing estates will be places where people who work aren't allowed to live," says Chris Martin, a policy officer with the Tenants Union of NSW. "How to get in in the first place is to get sick, and how to stay in - you stay poor."

On many of the 93 public housing estates, this will mean a further concentration of disadvantage. That is the opposite of the Government's rhetoric that the best formula is a "social mix" of 70 per cent private and 30 per cent public, which it is using to justify privatising the Minto and Bonnyrigg estates.

In the big financial squeeze, the department has ditched many of the tenants it was set up to serve. Thousands barred from public housing effectively are homeless or living in the squalor of the cheapest rental accommodation available. Housing agencies have reported examples of desperation such as 26 people living in a two-bedroom flat, and young renters living in Sydney backpacker accommodation or camping in friends' and families' lounge rooms and garages, says Shelter NSW's executive officer, Mary Perkins. "It's now possible to have a whole household whose income comes from social security all ineligible for public housing."

On his first day as Premier more than a year ago, Morris Iemma promised he would focus on public and affordable housing. But the Herald believes a scheme for affordable housing has been hacked back by the reality of the state's $700 million deficit, and the Premier's grand announcement is yet to come.

Despite a waiting list of 70,000 people, 1124 NSW public housing dwellings will be lost this financial year as they are sold, demolished or transferred, a department budget commentary says. In fact, a former department head, Terry Barnes, told a parliamentary estimates committee last year that only 1500 dwellings would be added to the state's public housing over the next decade.

Waiting lists do not swell only because of a sleight of hand: the Government has kept the income level to qualify the same for 10 years without taking inflation into account, according to figures gathered by Shelter NSW.

DESPITE a series of debacles, the Government is still pursuing the private dollar. Past flops include the catchily tagged PEP (private equity partnership) scheme engineered by the Coalition government under Nick Greiner in 1990. He said: "It is a means of simply getting more roofs over people's heads for each dollar that we spend." It has cost taxpayers millions and is still draining the public purse, the Herald has found.

The bulldozing of the Villawood estate in 1998 left taxpayers $17 million out of pocket, the state auditor reported, although the Government disputed that. A plan to remake an estate at Erskineville was axed after a public outcry. A Redfern redevelopment has stalled and prime land at Randwick lies empty three years after an announcement that Mirvac would redevelop it and provide public housing without the taxpayer paying a cent.

Secrecy surrounds the Bonnyrigg estate redevelopment, which Joe Tripodi announced in his first week as housing minister early last year. The cost: $500 million. But the Minister for Housing, Cherie Burton, will not say how much of that falls to the taxpayer.

The department has spent $48 million preparing the Airds-Bradbury estate for redevelopment, leaked meeting minutes reveal.

And the estates whose social ills caused headaches for the Government - Macquarie Fields and West Dubbo - are earmarked for private redevelopment, Burton confirms. Her department has a new directorate to decide what to do with the assets.

"The Premier has announced that 15 per cent of the state's infrastructure will be aiming to be [public-private partnerships] and public housing is involved in that," she says. "Every development will have its own uniqueness.

"There'll be an ability to sell the stock and [to] keep some. There'll be an ability for us just to sell land, because that's the best value we're going to get for it, or just totally redevelop an area and keep it for ourselves."

A $1.5 million Ernst & Young report the Government is using to guide its foray into private partnerships is secret. The department's director-general, Mike Allen, refused to release any of it to the Herald on grounds that it is commercial-in-confidence.

Dazzling a piece of real estate as Minto has become, with mansions on its heights, the phantom private sector partner was never found. The taxpayer will now foot the $286 million bill, despite the Department of Housing originally saying that the cost would be covered by the private sector. The department has turned to Landcom and Campbelltown City Council to get the project moving.

Fifty of the 60 hectares of public land will be sold for private housing, Burton's office says. Where once there were more than 1000 homes for public tenants, there will be 324.

Judith Stubbs, author of a report criticising the Minto redevelopment, believes the state could end up with 400 fewer public housing dwellings. Given the size of the waiting list and the restrictions on getting more housing because of federal cuts, "if you roll that out across various estates that could be redeveloped, that becomes a significant loss", the academic says.

Taking more than a quarter of a billion dollars from the public purse to lose public homes and land is not a good deal "for anybody", Stubbs says. "What you are giving away is a very valuable public asset - one of the few things we've got, which is public land."

The department says it will not lose stock. It "will make up the difference by building or acquiring 683 new dwellings in high-demand areas of greater western Sydney, predominantly in the Campbelltown area", Burton's office says. Burton denies asset-stripping at Minto and Bonnyrigg, saying they were picked because public tenants there wanted the "social mix".

Many dwellings built when more families occupied public housing are not suitable because now the tenants are mostly old people and single parents who need homes with fewer bedrooms, she says.

But there are serious questions about the real reasons for redeveloping Bonnyrigg estate, whose future the State Government is negotiating with two private tenderers - a consortium led by Macquarie Bank and another led by Becton Group Holdings.

The Government says a new "social mix" of 70 per cent private and 30 per cent public is needed to deal with behavioural problems there. But research it commissioned queries that.

In a survey of 666 households, University of NSW researchers last year found residents rated the "social cohesion" of their community higher than residents of greater western Sydney have in other studies. Bonnyrigg residents are among the most settled and satisfied of western Sydney, they found. More than seven in 10 said they felt they belonged to the neighbourhood. Three in four said they were happy or very happy with their homes, Stubbs and her colleagues, Bill Randolph and Bruce Judd, found. More than seven in 10 are families with resident children and most wanted to keep their detached housing.

The Government plans to more than double the number of dwellings, squeezing public tenants into smaller spaces. "It's really quite a unique community. It's less disadvantaged than other areas. It is not a typical estate," Stubbs says. "It's probably the kind of area where we need public housing. It's a low-density estate with very large blocks. It's acknowledged by the department as one of the least problematic estates. So one would have to say that the motivation for developing Bonnyrigg is largely financial."

One source close to the project told the Herald the Government could be as much as $150 million out of pocket - and will lose most of the 80 hectares of the estate to boot.

Even the Government says this is an experiment. Burton says: "I'm watching [Bonnyrigg] to see where that works out. If that's successful [I'm looking at] where we can emulate that."

The Minister for Planning, Frank Sartor, approved the delayed Minto redevelopment recently. Tenants in almost 150 homes got notice in July they would have to move out in a year. Another bald patch looms.


Erskineville A privately financed plan to demolish 140 public housing units and create $250 million worth of private housing ditched after a public outcry.


Redfern Elizabeth Street public tenants left on tenterhooks for three years as attempts to find a private developer flopped. Government is now considering "other options" to get a mix of public and private housing.


East Fairfield (Villawood) The former state auditor-general criticised the Government for razing 250 homes and moving 1000 people out to make way for private housing. He estimated the cost at $17 million. Government claimed it was lower.


Randwick Mirvac, the preferred tenderer to build a mix of private and public housing at no taxpayer cost, pulled out. A hole in the ground remains.


Minto 200 houses bulldozed before any master plan made or private partner found. Taxpayers now footing the $286 million redevelopment bill.


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