By Joe Montero

The Victorian government is continuing with the plan to demolish 44 of the state’s high rise public housing towers and is doing so under the cynical cover of expanding what it calls affordable housing. Thousands of families and individuals will be forced to relocate to the fringes under this plan, away from their communities, with no guarantee that housing needs currently being met will continue.

Behind this is the alliance between this government, developers, and the real estate industry. It happens that the towers earmarked for demolition mainly exist on valuable Melbourne inner suburb land. Handing this over to private investors means that certain interests are handed over a fortune at the expense of both taxpayers and existing residents.

 

New towers on this land are to be a mix of off private and what is called social housing, a term applied to housing currently attracting a 25 percent of income rent. It can be as high as 30 percent. But hyping up of social housing is misleading. Since the launch of the Big Housing Plan in 2020, sizeable proportion of new builds have gone to the private market, and a large part of the rest is being earmarked for what is called affordable housing. This is housing where rents can be as high as 79.9 percent of the market rate. The rest is for the private market at private market rents.

While there is a genuine place for a mix of housing types, this should not come at the expense of public housing, which remains the best option for many people and is currently being decimated, and this is contributing significantly to the lack of affordable housing. Other social housing, combining not for profit organisations caring for the special needs of certain groups, and cooperative housing meeting specific needs of others, play a different role to social housing. One should not gain at the expense of the other.

Part of the rationale put forward is that the costs of bringing the properties to standard after decades of neglect means new builds. Perhaps. But this doesn’t mean that they must be turned into a major source of profit for private interests. The Big Housing Build model is built on leasing out the land for 40 years to net an initial $5.3 billion. The point is that this is about selling the right to profit from rents, on a scale that is significantly higher than the investment by private interests. The method is to privatise the cost onto the shoulders of not-for-profit providers and especially renters. Hence the drive to extract more rent dollars from the transformed public housing estates.

 

Mired in the ideology of market solutions as the only legitimate solution to everything, the government can’t see past the prioritising of private profit instead of the needs of the affected communities and individuals. It does not consider that retrofitting the properties at less than the costs of the market solution as legitimate to this ideology. It does not consider a longer-term plan that sets the interests of residents in the first place. Going down this road is the outcome of blindness or corruption. Perhaps a mixture of both.

As the public becomes increasingly aware of what is going on, opposition to this plan rises. It will not be easy for the Victorian government to continue on the same path. Campaigners will come up with alternatives that are realistic and press them home.