Public Housing demolitions – opposition getting bigger

I reported in my column last month the Victorian Legislative Council had voted to conduct an inquiry into the decision of the state government to demolish all of 44 Melbourne public housing towers.

Initiated by the Victorian Greens, who have been consistent, strong supporters of public housing provision in Victoria, it gained the support of the Opposition and cross bench MPs to defeat Labor in the Legislative Council. This inquiry will start up later this year.

Labor for Housing

Soon after what happened in the Legislative Council, “Labor for Housing” – a group of Labor MPs from the Victorian and federal parliaments – were reported as strongly criticising the plan to only increase by 10 per cent the number demolished apartments that will be replaced with community, not public, housing.

They want to see a doubling of community housing over the demolished public housing. They failed, though, to note that existing public housing residents threatened with the demolitions do not want to transfer to community housing.

Labor for Housing also failed to advise their view on the mix of dwelling that their own plan for 44 tower demolitions and rebuilds would deliver. The government proposes 30,000 new dwellings over the next 25 years with one third each to be so-called affordable and market rent. Doubling community housing means higher density or less affordable and/or market rent dwellings.

The affordable housing policy of the Victorian Government is 90 per cent of local market rents to a maximum of 30 per cent of the household income. The new funding available from the federal government will only fund projects with affordable rents set at around 75 per cent, not 90 per cent of gross household incomes, so federal funds for demolitions and rebuilds just won’t happen.

After Labor for Housing had a spray, Brian Howe, who is described as a Labor Party elder, came out with a clearer message: “NO DEMOLITIONS!”

Mr Howe, the Minister for Housing in the Hawke/Keating governments 40 years ago kept negative gearing and capital gains tax discounted for inflation in place. He shifted federal government spending away from public housing to subsidies for private investors and community housing providers through higher Commonwealth Rent Assistance and grants. The legacy of his policies, added to by the Howard government, is stark today.

An alternative plan

While Labor in both Victorian and federal governments do dodgy maths and exercise wishful thinking over industry superannuation funds and private banks delivering high growth in new and genuinely affordable housing, the Australian Greens have proposed a new federal authority that would build public and, at no profit, first homebuyer homes.

Such an authority could work with Homes Victoria, after it is changed from being a privatisation agency and real estate developer into a genuinely affordable housing builder. It would bring stability in an industry now plagued with bankruptcies.

This is not a wildly radical idea. It replicates what Australia’s longest serving Prime Minister Bob Menzies, a Liberal, did in the 1950s and ‘60s and it was successful.

Combined with mandatory inclusionary zoning throughout Victoria, a plan like this can deliver. •