Aug 29, 2017

Is selling public housing land to developers a good policy?

The Victorian Government's policy of inviting proposals from the private sector to redevelop outdated public housing estates is proving controversial

Alan Davies — Editor of The Urbanist

Alan Davies

Editor of The Urbanist

Building private housing on public housing estates – Victoria’s Public housing renewal program

The Victorian Government is continuing its policy of selling land in public housing estates to developers so they can build housing for the private market. But according to The Age, some councils aren’t happy (Opposition mounts to plan for developer deals on city’s public housing estates):

Plans to sell off public housing land at nine sites across Melbourne to private developers have been opposed by six of the eight Melbourne councils where residents are affected. The Andrews government is fast-tracking plans to sell the nine sites, in some of the city’s most exclusive locations: Brighton, Hawthorn, Clifton Hill, Ascot Vale, North Melbourne, Flemington, Brunswick West, Northcote and Heidelberg West.

Developers who succeed in buying a site off the government will have to rebuild the existing public housing – with at least 10 per cent additional dwellings for the poor.

There’re the usual quotes in the paper’s report about government lining the pockets of greedy developers, but is there a more sensible motive here? Could the $185 million Public housing renewal program be a good idea? Or are councils right to oppose it?

Based on the information provided by the paper, the main benefits claimed for the Government’s policy are:

  • It funds the rebuilding of end-of-life public housing units on the estates
  • It funds an increase in the total stock of social housing across the estates
  • It promotes social mix by socioeconomic status
  • It increases the total stock of private dwellings in the inner suburbs.

Opponents of the policy, however, claim that:

  • It privatises publicly owned land with no benefit for public housing residents
  • It creates excessively high population densities on the estates
  • Social mix doesn’t happen because the private and public residents are in separate buildings.

Critics say the Government should instead be directly funding more social housing. I agree with the principle of building more social housing rather than being distracted by tokenistic policies like inclusive zoning, but there’re two important issues to consider in this case:

First, the Victorian Government has limited funding that must cover a range of worthy expenditure priorities e.g. public transport, education, health. It also has limited avenues to raise revenue. In the absence of the Federal Government providing more money for social housing, selling the land is a way of covering the cost of renewing existing public housing units, as well as adding to the stock, without taking funds away from other priority purposes.

Second, there’s limited scope to increase the number of public housing units on these sites. There’s a large and compelling body of experience showing that spatially concentrating disadvantaged residents amplifies dysfunction and leads to poorer outcomes. Putting a lot more public housing residents together is not a good idea (see also Does place matter for the life prospects of children?).

I don’t think there’s much to the “excessive density” objection; it’s a politicking tactic (see Is “denser than Singapore” too dense for Sydney?). Developers will have to sell to private buyers at densities that will be acceptable to them, suggesting that what gets built will be fine for both public and private residents. These estates are mostly in the inner suburbs where increases in density make a lot of sense. Many Melburnians already choose to live at much higher densities than will be provided on these estates.

However the criticism that social mix won’t provide benefits is probably largely true (What can planners do about socio-economic polarisation?). It’s likely there’ll be separate private and public buildings because that’s what buyers want. In that sense it won’t be that different to the separation that currently exists between estates and surrounding middle class housing. Nor will buyers mix a lot with public housing residents. Again, that’s the status quo; many middle class inner city residents actively avoid sending their children to schools attended by public housing residents (see What to do about schools and “rich switch”?).

So, while social mix should be heavily discounted as a benefit, it won’t cause serious problems either. It seems to me the key benefit of the policy is rebuilding aging, high-maintenance public housing units and the construction of some additional social housing units. It does that without intensifying the issues of concentrated disadvantage and provides an increase in market housing supply. Unless someone can devise a better way of turning estate land into revenue that can be spent on social housing, or can extract unprecedented sums for new construction from the Commonwealth, this looks like a real improvement on the status quo.

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9 thoughts on “Is selling public housing land to developers a good policy?

  1. Peter Fellows

    At the Markham public housing estate in Ashburton, Melbourne 56 two-storey public housing flats are to be replaced with 62 public and 163 private dwellings (the number of public dwelling bedrooms actually decreases marginally). So this precious piece of social infrastructure is to become 75% private. Would this scheme be appropriate for other precious social infrastructure too, like school renewal? Yes finding infrastructure investment funds is an ongoing issue for all levels of government, but why should public housing have to suffer such dreadful long term outcomes? Sites like Markham could hold many more public dwellings. The funding model limits this to almost nothing. Perhaps we should permanently close some roads and sell the land for private development as a means of helping to pay for road infrastructure?

    1. Alan Davies

      By selling some of the Ashburton land, we get 62 public housing units (renewed) without calling on the budget i.e. without crowding out expenditure on some other important public purpose. That other purpose could be building more public housing units elsewhere in Melbourne without increasing the concentration of disadvantage at Ashburton. There’s also the argument that building private housing on Ashburton makes it more socially diverse e.g. some of those private owners will send their children to the local primary school.

  2. Dr Kate Shaw

    More of the shallow analysis and short term thinking that characterises so much Australian policy making. Try these links for a different (more solidly researched) view:

    1. Alan Davies

      Dr Kate Shaw, you should explain carefully what you mean when you use a pejorative term like “shallow analysis” and promote two “solidly researched” articles written by…you! Both of the articles you wrote and this one seem to broadly agree that (a) the social mix argument isn’t convincing and (b) that direct government funding for public housing is the preferred approach.

  3. rohan storey

    The estate redevelopment is fine, but the real issue is the total under supply of public housing, with a wait list of um 30,000 ? So would very much like to see a commitment to building more altogether. The state govt is borrowing billions to build the rail tunnel, be nice to even have 100 mill / year to build more, or maybe buy land and subsidise construction of build-to-lease; a policy of relying on existing state land is quite problematic.

  4. David Gabriel-Jones

    Beats me how Melbourne retains the Housing Commission estates in Richmond, Collingwood, Debney’s Paddock… Is it the ghost of Le Corbusier at work? or Joseph Stalin?

    1. [email protected]

      Maybe keeping the named estates in their current condition has more to do with retaining their existing socio-economic profile for political and electoral predictability trade offs?

      1. rohan storey

        I’ve heard it’s just too expensive and disruptive to demolish the high rise; hard to get the same density and open space without building replacement towers. They’ve been refurbished, and tend to house whatever the newest wave of migrants are, and don’t appear to have the social problems they used to. They should be end of life too like the walk ups, but maybe neither of them are really end if life – it’s just the walk ups have the problem of no lifts, small lobbies, ill defined open space , plus easier to rehouse people during replacement!

    2. rohan storey

      Ps Stalin much preferred classical ornamentation; it was Kruschev who built thousands of precast panel high rise in the 60s, pretty much that same time they were built here, and in the US and the UK.

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