Victorian Supreme Court Judge was startled!

This was the headline in a recent The Age article on the human rights class action being taken by public housing residents living in Melbourne’s towers.

Justice Richards had heard Homes Victoria’s explanation of the ex-Premier Dan Andrews’ cabinet decision to demolish all their homes: no documentation was provided by the agency to justify the demolitions. 

In response to HV lawyer’s submissions, the judge said: “That Homes Victoria should make a multimillion-dollar decision to demolish and replace three public housing towers that house hundreds of people with no documentary basis at all. That is a very surprising position for your client [HV] to take.”

The judge has scheduled more sessions to understand what the government is doing at 9.30am on Monday, October 28 and on Tuesday, October 29. The court’s address is 120 William St, Melbourne CBD. 

More information on the class action can be found here at Inner Melbourne Community Legal’s website: imcl.org.au/class-action

All public housing residents are encouraged to attend, not only those living in towers. 

Despite resident and community opposition, demolitions are being ramped up

Housing Minister Harriet Shing has, without prior notice to residents, announced that walk up estates in Richmond and the tower at the Horace Petty estate in South Yarra are now on her demolition list: homes.vic.gov.au/high-rise-victoria

Is this ramping up part of Victoria delivering on the agreement with the federal government to increase housing construction rates in the state?

Who is carrying out the redevelopments?

Community housing organisations are transitioning to be managers of what is really full market rent housing paid for by tenants or subsidised by governments. Free public land and grants or “service fees” from governments will be underwriting their profits. 

With the first Ground Lease Model (GLM1) project, Community Housing Ltd released a media statement claiming that the rental revenues gained would deliver up to four times more dwellings if the government reinvested its profits share.

The Victorian Auditor General’s Office did not analyse any of this in its recent report on the Big Housing Build, restricting its review to only assessing if targets are being met.

Funding issues and profits

Removing public housing through demolitions from the HV balance sheet will accelerate their funding problems through lower rent revenue. Victoria has major debt problems that constrain what it can commit to pay for now and into the future. The bill alone for the demolition of the first tranche of towers is $100 million!

There is some possibility of federal infrastructure funding for rebuilds, sewerage, etc., but with only $500 million per annum committed by the federal government for all states and territories, all prospective Victorian applicants will only have around $125 million per annum to bid for against each other.

This can only mean that the full market rent component of each public housing demolition project will go up to meet private investor requirements.

As an indicator of who is/will be chasing the federal money, see this guarantee to investors of 8 to 12 per cent returns.

Prepared with the assistance of the Save Public Housing Collective •