The Victorian Government supports private market rate rents

The Victorian Government supports private market rate rents
Cory Memery

The Big Housing Build absorbed the original Public Housing Renewal Program (PHRP), which included up to 11 public housing estates.

The PHRP’s original plan was move residents out with threats of eviction if relocations were not accepted – demolition; redevelopment by community housing organisation and private developer partnerships, with around 30 per cent of new dwellings being retained for community housing management and 70 per cent for private sale to investors and homeowners.

This plan was an extraordinary failure, with less than half of the estates receiving bids from such partnerships at Abbotsford St, North Melbourne; Walker St, Northcote; Oakover Rd, South Preston; and Gronn Place, Brunswick West. Those that started up are running late on final completion dates that will be four years after tenants were relocated.

Other estates like Dunlop Ave, Ascot Vale and Tarakan St, Heidelberg West have seen Homes Victoria fund the full demolition and redevelopment costs. Bardia/Bell streets estate at Heidelberg West was demolished but no construction has started.

Following this failure, the model was changed to a redevelopment mix of community (aka social) housing; so-called affordable rent, and full market rent dwellings. This is model being pursued at the Barak Beacon estate in Port Melbourne. To ensure investors get a guaranteed return for their investments, full and 90 per cent local market rents will be charged for the larger proportion of the new dwellings, with tenants having no recourse to challenge rent increases as local market rents go up.

The 10 per cent discount was originally 20 per cent but was halved by retiring Minister Richard Wynne early last year. Labor was defeated in his lower house seat of Richmond last year – a good measure of his legacy as both housing and planning minister.

Calling this an affordable housing program is a travesty in public policy.

The Big Housing Build is embedding market rents as the benchmark for rent setting in its projects.

Selecting tenants for the so-called affordable housing

The prospective tenants will not have to be on the Victorian Housing Register.

They will be chosen through a ballot process, which literally means that if you are accepted as an eligible applicant household you will go into a pool where a random selection process will prevail. There is no indication if urgency in needing stable accommodation will feature in eligibility assessment, nor if the essential worker classifications – nurses, fire and rescue workers, childcare workers, teachers – will be part of the assessment criteria. Drawing on its infinite wisdom Homes Victoria has selected a company called Snug to run the ballots. A Guardian Australia investigation found that for other landlords:

“Snug’s opaque and potentially discriminatory use of applicants’ personal data to ‘score’ them against properties, giving them a higher score when they offered to pay more rent. Privacy experts, academics and renters’ advocates expressed concern after analysis of Snug’s patent application suggested its intention was to collect wide-ranging information from users, including friend lists, social media networks and ratings on third-party platforms such as Airbnb and Uber, and to develop a kind of rental credit system.” •

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