Redevelopments in Northern Sydney

Over the past year the NSW Government has launched major projects to transform the State's Social and Affordable Housing portfolios - most notably Communities Plus and the Social and Affordable Housing Fund. But throughout this period, NSW Land and Housing Corporation ('LAHC') has also busied itself with smaller scale initiatives. As we outlined last week (here, with update here), on Sydney's well-heeled North Shore this has involved 'spot sales' of large houses to the private market. It appears likely that the resulting windfall gains have assisted an underfunded LAHC to meet its operating costs. 

Above: LAHC has been busy across the City of Ryde

But LAHC has also pursued a related though distinct strategy in neighbouring Northwest Sydney. The Public Housing provider demolished a number of large, freestanding houses in the Ryde Local Government Area in 2014 and 2015. It constructed units in their place. 

Public tender documents provide that houses across four sites in the suburb of Eastwood - two each on Alison Street, Raymond Street, and North Road, and three on the corner of Banksia Street and Lovell Road - were demolished, with small apartment complexes built in place of each. We understand that the same will likely happen to Public Housing cottages on Irene Crescent, also in Eastwood. 

Eight houses on Neville and Fawcett Streets, Ryde were also levelled for multi-unit developments. Finally, LAHC demolished a house on Adelaide Street, West Ryde, replacing it with a seven-unit building. 

Land and Housing Corporation has provided that all newly-constructed units will be provided exclusively as Public Housing. 

Our response

In our earlier discussion of North Shore spot sales, we highlighted the process LAHC undertakes in assessing its housing assets: "In managing the Public Housing portfolio, Land and Housing Corporation periodically estimates the cost or windfall or 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."

It is concerning that in Northwest Sydney, substantially similar properties to those sold on the North Shore have instead been redeveloped. It is impossible to escape the conclusion that land values were a key consideration; simply put, Ryde is markedly less valuable than its blue chip neighbour. According to Land and Sales Report data, the City of Ryde ranks 18th amongst Greater Sydney's 51 LGAs by average dwelling sale price. A far cry from the North Shore, which contains six of the top ten. The contrasting fortunes of the Ryde and North Shore properties suggests that the future Public Housing is tied to some extent to the fluctuations of a speculative and volatile property market. 

At the least, LAHC has provided that it did not impose any mandatory relocation process on tenants moved on from the now-demolished Ryde properties. This must continue to be the case for as long as LAHC is driven, by underfunding and/or market conditions, to the view that some Public Housing is too valuable not to sell. 

On the other hand, it should be repeated that the redevelopment of LAHC land within the Public Housing portfolio is strongly preferable to the loss a site to private interests. Moreover, LAHC has said that its redevelopment works in Northwest Sydney are addressing increased demand for smaller, more accessible dwellings, and for more Social Housing overall, in the Ryde area. The pursuit of such objectives is legitimate. However, we might also repeat our quibble with similar projects elsewhere in Sydney. That is, a true social mix - of the sort the Government claims to desire - requires a diverse portfolio. That means larger affordable properties as well as small units and bedsits. Most notably, large properties are necessary to accommodate low-income families. LAHC's redevelopment of Ryde may well serve immediate portfolio needs, but it must not result in the disappearance of larger Public Housing properties from the area completely. 

Update: North Shore spot sales

In last week's article, we discussed recent 'spot sales' of Public Housing properties on Sydney's well-heeled North Shore, and its significance for the Social Housing portfolio as a whole. 

Above: Have spot sales been put on hold for Communities Plus?

We have since received some indication that LAHC recently paused intended spot sales in Northern Sydney. It has reportedly taken this decision in order to provide itself with more vacant dwellings for the ongoing relocation of around 400 tenants from the Ivanhoe Estate - part of the large 'Communities Plus' initiative. If accurate, it would not surprise if the reportedly cancelled sale of a 12-unit complex on Upper Spit Road, Mosman was in fact a deferral of sale until after those relocations are complete. 

We understand that LAHC is also planning sales of freestanding cottages in the suburb of Turramurra, in a similar manner to recent sales in Lane Cove and Asquith.

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.

Parliamentary Inquiry into repairs and maintenance of public housing

Submissions to the Inquiry highlight tensions between repairs & maintenance and disposal, renewal & redevelopment of the public housing portfolio.

Family and Community Services submission available at this link.

NSW Federation of Housing Associations submission available at this link.

Tenants' Union submission available at this link.

Redfern Legal Centre submission available at this link.

Full list of submissions available at this link.

The Tenants Union will give evidence at the Inquiry's public hearing on May 9th 2016.

No new Social, Affordable housing for North Eveleigh

NSW Government developer UrbanGrowth has announced plans for new housing in the 'Central to Eveleigh precinct' of inner Sydney. The project concerns the redevelopment of disused and vacant State land around the railway tracks to the southwest of Central Station - though it also takes in the larger Waterloo station redevelopment, and anticipates future works in Redfern. 

UrbanGrowth has announced that the renewal of the 'North Eveleigh' sub-precinct will primarily deliver "buildings between three and 20 storeys providing 600-700 new apartments with a total floor area of around 57,000 square metres providing homes for between 1,150 and 1,350 people"  - in addition to amenities such as a small park. 

But the project will deliver no Social or Affordable Housing.

Above: The 'Platform Apartments' development in North Eveleigh

The North Eveleigh sub-precinct is a 3.3 hectare site situated to the southwest of Redfern Station, between the Carriageworks site and Iverys Lane Newtown. Though comprised mostly of disused RailCorp land, it includes the 'Platform Apartments' development - consisting of 88 Affordable Housing units owned and managed by community housing provider City West housing. That development predates the Central to Eveleigh program, though a Sydney Morning Herald article provides that the NSW Government contributed the land and the cost of civil works. 

An UrbanGrowth spokesman told the Herald that, including The Platform, the North Eveleigh site will include 11-13% Affordable Housing once works are complete. A spokesman told ABC News that other Central to Eveleigh sub-precincts may deliver Social and Affordable Housing. 

Stakeholder responses

City West Housing CEO Janelle Goulding told the Herald the provider is "surprised to hear" the North Eveleight sub-precinct development will not deliver Affordable Housing. Ms. Goulding also said, "At the end of the day affordable housing is so needed it shouldn't even be a discussion point".

Jenny Leong MP's electoral district of Newtown includes the North Eveleigh site, and much of the wider Central to Eveleigh precinct. On March 26, Ms. Leong posted an update to her Facebook page concerning the announcement. It reads, in part: "...affordable housing is critical to success of urban renewal...Shameful stuff and such a lost opportunity for the NSW Government to follow the lead of other global cities by establishing provisions for ensuring affordable housing is at the heart of urban renewal". Ms. Leong was also co-signatory to a November 2015 submission to UrbanGrowth that calls for 30% Affordable Housing at the North Eveleigh site. Other signatories included local interest groups REDWatch, Friends of Erskineville, Alexandria Residents Action Group, and North Eveleigh Working Group. 

On March 26, Shadow Social Housing Minister Tania Mihailuk MP posted an update to her Facebook page concerning the announcement. It reads, in full: "Another backflip from this Government. Once again developers and investors are the winners and everybody else misses out". Ms. Mihailuk also told ABC News, "Clearly what the Government has already set aside there for its targets is not enough", and, "It's about this Government taking seriously the need to set social and affordable housing targets in each of their own developments". 

Homelessness NSW described the announcement on its Facebook page as "an unbelievable decision that needs reversing". 

Our response

We share much the same concerns regarding North Eveleigh as for The Bays Precinct. The site represents a sizeable package of disused and vacant State land, in a region experiencing an acute shortage of Social and Affordable Housing. The NSW Government has also emphasised the need to increase inner Sydney's 'social mix'. 

Furthermore, North Eveleigh is situated in close proximity to the Waterloo site marked for redevelopment over the next 20 years. Approximately 2000 Public Housing tenants will be relocated over the life of that project. New Social Housing at North Eveleigh could have served as a site for temporary relocation, or a permanent new home, for some of the Waterloo tenants whose homes are marked for demolition.

The decision taken is therefore a missed opportunity in multiple respects. 

Communities Plus update

A paper released by the NSW Government in relation to the tender process for Communities Plus has revealed new details about the scheme. The document, published on NSW e-tendering and entitled 'Expressions of Interest: First Six Sites of the Communities Plus Program', is intended for developers and community housing providers with an interest in participating in the scheme. It concerns the sites at Gosford, Warwick Farm, Glendale, Seven Hills, Telopea, and Tweed Heads. A standalone equivalent is expected to be released for the larger Macquarie Park site. 

The Communities Plus Telopea site

Build characteristics

The paper most comprehensively discusses build characteristics. It describes the project as consisting of "medium and high density" construction. At present, the Seven Hills, Telopea, and Warwick Farm blocks are zoned for high density residential, Glendale and Tweed Heads are zoned for medium density residential, whilst Gosford is designated mixed use. It is provided further that “The program is predominantly seeking one and two bedroom dwellings as social housing, with a preference for more two bedroom dwellings. A number of dual key dwellings could be attractive as they provide greater flexibility.” 

Regarding the quality of residences to be delivered, the paper states that “as a minimum, the social housing will be required to meet the Silver Level of the Liveable Housing Design Guidelines as published by Liveable Housing Australia.” Liveable Housing Australia describes itself as a "not-for-profit partnership between community and consumer groups, government and the residential building industry". Its primary function is to "advocate the mainstream adoption of liveable housing design principles in all new homes..." - especially housing that "better respond[s] to the changing needs and abilities of people over their lifetime". It has not made its housing design guidelines publicly available. 

The residences constructed will also incorporate energy efficient design features; “Passive environmental design, which maximise solar access, orientation and cross flow ventilation to reduce energy heating, cooling, lighting and clothes drying costs...will be a requirement”.

Commercial arrangements

The paper also addresses anticipated commercial arrangements between LAHC, developers, and community housing providers - including the overarching commercial objectives of the project. LAHC will seek to optimise its commercial return for the land it contributes to the project, whilst adding to the overall supply of social housing and "seamlessly integrating" social, affordable, and private market housing.

The paper contemplates the manner in which the Government will dispose of and/or retain the sites earmarked for development in some detail. Although there will be no mandatory commercial structure, it outlines two "non-binding" arrangements. Under 'Contract for Sale of Land', LAHC would concurrently "offer a Contract for the Sale of Land to sell the site and a Contract for the Sale of Land to purchase the completed social housing dwellings.” Under 'Project Delivery Agreement (PDA)', "LAHC would retain ownership of the land until the project is completed and would appoint a Proponent to develop the site at the Proponent's cost. The proponent earns a return through a development fee equal to the proceeds of sale...[and] will be responsible for and accept all risk selling the private dwellings".

The affordable housing component of Communities Plus developments is also discussed. The Government anticipates that affordable residences will be owned or controlled by the developers, and managed by a registered community housing provider. Further, “it is not intended the value of land contributed by LAHC will fund the affordable housing component.” These residences will be managed according to Department of Family and Community Service guidelines as to what constitutes affordable rental housing. 

The paper also notes that parties contracted to construct and manage the sites will not be able to draw on funding from other NSW Government housing initiatives, such as the Social and Affordable Housing Fund.