Victorian Government continues the sell off of public land to private developers

Public land where public housing could be built is still being sold off to private developers.

The latest was vacant land at 18a Miller St, Preston bought by the state in 2008 by the Brumby Labor government for $2,585,000. The existing large dwelling was then demolished. 

You would think that public land held for 16 years could have been used for good purposes. The government has claimed, though, that the site was never included in the current Big Housing Build (BHB) program. The Sunday Age (August 11) reported that internal Home Victoria documentation they have seen advised construction was actually deferred under this program. One-hundred-and-forty so-called affordable and social, not public, housing dwellings were to be built.

Darebin council area has one of the highest homelessness rates in Victoria, so it is fair to ask that it should have had priority for the construction of housing that is actually affordable – not the government’s 90 per cent of local market rent.

Instead, a private developer will get the land and will probably build more than 140 dwellings and make a profit with the laughable requirement that only 10 per cent of the new dwellings be 90 per cent of local market rents. Other projects with these conditions have had a requirement for such housing to be provided for only three years after construction. 

Defining “affordable” housing

The Australian Housing and Urban Research Institute (AHURI) advises that housing built by charitable organisations at 74.9 per cent local market rents. This percentage is a condition for grants available under the federal government’s current programs. The 74.9 per cent rate also means that no GST is charged for all construction costs for dwellings built for charities. 

The announcement on 18a Miller St, Preston advised the government is seeking federal funds for other sites. Just how this could be successful with a 90 per cent of market rents for so-called affordable housing as policy is very unclear.

Public housing is supported by expert economists

A recent survey of economists saw nearly 75 per cent nominate public housing as the best way to deal with housing unaffordability. 

The group includes former heads of government agencies, a former Reserve Bank board member, and former Treasury, International Monetary Fund and Organisation for Economic Co-operation and Development officials. 

What will happen next?

Public housing will be demolished but with no clarity on the funding of redevelopments. 

Households in the three towers at Flemington and North Melbourne will be forced to leave and live in locations scattered across Melbourne or other regions in the state. 

They will relocate to vacant public and community housing and leased private dwellings. 

There is now prospect of a reduction in housing interest rates. This will boost private demand for existing housing. Building new dwellings will not happen quickly given builder insolvencies, lack of skilled workers and much higher materials costs.

There is an urgent need for a publicly owned home builder than can build at no profit on public and other land. •