North Shore spot sales

In recent months, the announcement of numerous major estate renewal projects has attracted most scrutiny from those monitoring the Social and Affordable Housing portfolio (including this blog). But throughout this time, NSW Land and Housing Corporation ('LAHC') has also engaged in one-off 'spot sales' of Public Housing properties to private interests - most notably on Sydney's North Shore. 

Above: Lane Cove has seen numerous spot sales

The matter forms the subject of a recent Fairfax Media article, which says the NSW Government has banked $54.5 million from spot sales this calendar year. This figure does not include sales forming part of larger sell-off projects at Millers Point and Cowper Street, Glebe. Fairfax notes that sales took place throughout the inner and middle ring of Sydney, including seven across the North Shore - six at Mowbray Road, Lane and one in Seaforth. 

The NSW Government's 'eTendering' website provides that in December 2015, LAHC also contracted for the sale of two three-bedroom houses at Mindarie Street, Lane Cove (here and here). The Mindarie Street properties lie adjacent to the Mowbray Road properties. 

All of the Lane Cove properties sold by LAHC are situated on land zoned for high density residential development, and lie adjacent existing apartment blocks. Moreover, the Rent and Sales report provides that prices in the Lane Cove LGA are currently seventh highest of the 51 councils in the Greater Sydney region. Prices have grown by 26.3% over the preceding year, the ninth highest growth rate in Greater Sydney. The properties are therefore attractive to buyers, and especially developers, in multiple respects.

In October 2015, LAHC also completed the sale of a four-bedroom house at Lords Avenue, Asquith. 

However, The Mosman Daily has reported that LAHC recently opted against the sale of the 'Muston Court' apartment complex at Upper Spit Road, Mosman. The site consists of 12 one and two-bedroom dwellings, and is one of only four LAHC-owned apartment blocks in Mosman. LAHC had intended to proceed with a sale; all units are vacant after FACS Housing transferred former tenants over a number of years. But the article quotes a FACS Housing spokesman as saying the 60 year-old development will instead be refurbished and upgraded.

See also our update to this piece.

Our response

Social Housing Minister Brad Hazzard MP commonly extols the virtues of mixed communities - for Social Housing tenants especially. The following, from a February media release, exemplifies the Minister's professed position: "redeveloping [this] estate will lead to a huge improvement in social outcomes...We've already seen this with the Minto redevelopment where we now have a great mixed community and where kids in social housing see their neighbours go off to work and can see the different choices available to them." Such values are also reflected in the Government's Future Directions strategy for Social Housing over the next decade. The 'Communities Plus' and 'Social and Affordable Housing Fund' projects - major components of the objective to deliver more social housing - involve the construction of mixed tenure communities. In the case of Communities Plus, this will be delivered at the direct expense of current Public Housing estates.

As a basic principle the Tenants' Union supports the fostering of socially mixed communities, albeit with some caveats. Long have we advocated accordingly - most recently for Ultimo and Glebe. 

But in assessing the North Shore spot sales, it must be emphasised that the region is uniquely well heeled. This is borne out in the property sales data. In addition to Lane Cove, the Mosman, Hunters Hill, Willoughby, Manly, and Pittwater LGAs are also amongst the ten most valuable in the Sydney metropolitan area. Moreover, according to 2015 ATO data, the region also contains a full 7 of the 25 wealthiest postcodes in Australia by residents' average taxable income.

In managing the Public Housing portfolio, Land and Housing Corporation periodically estimates the cost or windfall of maintaining, redeveloping, or selling individual dwellings. In the case of valuable North Shore land in a heated market, it appears the opportunity cost of not selling is proving difficult to resist. Indeed the Mindarie Street houses delivered almost $3 million apiece. 

This is problematic. As Shelter NSW Executive Officer Mary Perkins told Fairfax, "social mix shouldn't be a one-way street. "You don't just rip down Redfern, Waterloo and make it a more economically mixed community [Communities Plus] and then say to the North Shore, well you're not going to have any public housing because it's a cash cow."" LAHC should look to develop mixed communities across all of Sydney and NSW - not just where it is cheap and convenient to do so. Accordingly, any sale of Public Housing should not be a reflexive or lightly taken decision. When a house sits on valuable land, and/or is expensive to maintain, renovation should be preferred, followed by redevelopment within the Social Housing portfolio. 

This would not only allow Social Housing to maintain a presence in more valuable areas, but an appropriate range of dwellings. Large houses on larger blocks will of course sell for higher sums. But social mix also requires the availability of larger dwellings as affordable rental housing - to accommodate low income families particularly. 

We also agree with Kirsty Needham, author of the Fairfax report, that the sales are "puzzling, because the Baird government gave the impression in January that the days of using public housing stock as a cash cow were over". Clearly LAHC has not ceased offloading valuable and/or high maintenance properties. In all likelihood this is a matter of financial necessity - the public landlord needing to sell to meet its operational costs. The effects of this are obviously damaging, not just to social mix but because they are patently unsustainable. There will only ever be a finite amount of prime land to sell. The NSW Government must therefore consider providing additional funds to maintaining and growing the Public Housing portfolio across the State, so that LAHC may cease dividing Sydney's suburbs into haves and have-nots. 

We welcome feedback from all tenants affected by Public Housing sales, including in Northern Sydney. This may be provided anonymously to contact [@] tenantsunion.org.au.