No to the demolition of public housing

The fantastic team at not-for-profit architectural and urban design research organisation Office has completed a third study demonstrating that public housing should not be demolished but renovated and expanded to ensure a supply of affordable housing in Victoria at lower cost to governments.

See this article.

Office’s study focuses on the Flemington estate where two high-rise buildings are the first to be demolished under Labor’s plan and rebuilt to three times the current precinct density.

Based on other demolition projects, the new dwellings will most likely be just over one-third full market rent; just over one-third 10 per cent discounted market rent; and the rest “social” not public housing. 

The state government is locking in huge spending under its demolition plan.

A review of contracts for the redevelopment of other estates through Ground Lease Models 1 and 2 projects, reveals mention of government “service” payments and capital outlays over their 40-year periods going to the consortium managing them. Go to this link.

The $$ involved are mind-boggling: $901.7 million for project 1, and $1.108 billion for project 2. 

This spending appears to cover the gap between market rents and the rents that will be charged for both “social” and “affordable” housing, plus tenancy management costs. In other words, the consortium will receive the equivalent of full market rents for all dwellings. 

The federal government will be locked into paying Commonwealth Rent Assistance for those who will live in the “social” housing and have incomes low enough to qualify.

For 44 towers a reasonable estimate for current and future state governments is a minimum of $12 billion, if each project includes three towers!

This estimate does not include loss of rental income for Homes Victoria from demolishing public housing.

Panic Buttons - the new housing policy formulation strategy

New private dwelling construction collapsed in 2023 into 2024 under the impact of higher interest rates and it is clear targets set jointly with the federal government won’t be met. In response, last month saw a flurry of new announcements from the state government.

Planning and building permits for high-rise projects will be provided by the state government, not local councils. As soon as Premier Allan announced additional locations, private sector developers stated they would need a guaranteed rise of at least 15 per cent over current sale prices! 

Stamp duty on off-the-plan sales has been slashed for the next twelve months for new town houses and apartments. 

Homeowners and investors will be able to build an additional dwelling on the land where they already own a home without the need for a planning permit. This was promoted as housing for millennials; 28- to 43-year-olds. The government apparently believes they have just been waiting around for this opportunity!

There will be more of this as we get closer to a federal election when affordable housing will a major issue for voters.

Written with the assistance of the Save Public Housing Collective. •