The Big Housing Lie: How the Andrew’s Government is Selling Out the Victorian People
21/03/2022
Patrick Lux
In November 2020, the Victorian government announced plans for ‘the biggest single spend on social housing in the state’s history’, with $5.3 billion going towards building over 12,000 new homes over four years.
This all sounds great to the casual observer, but the key term here is social housing. There will be no new public housing built under the scheme; there will be nothing publicly owned and managed by and for the people, only privately run community housing. On top of this, many public housing estates will be (and already have been) demolished and replaced with ‘not for profit’ run community housing and private units.
The ‘Big Housing Build’ is being sold to the Victorian people as something forward thinking and philanthropic, something with the interests of the people at heart. It’s clever marketing for an ongoing campaign to sell off public assets for private profit. This government has already sold off over 2,646 hectares of public land to private interests, and from 2016-2018 ‘transferred $304.7m of public stock to [private] community housing providers’.
It is, as Friends of Public Housing Victoria (FOPHV) declared, privatisation by stealth.
Housing Commission Flats in South Melbourne.
Mattinbgn, CC BY 3.0 https://creativecommons.org/licenses/by/3.0, via Wikimedia Commons.
What is ‘Social Housing’?
Social housing is an umbrella term that includes both public housing (100% publicly owned, managed and funded by the state) and community housing (owned and/or managed by non-government housing organisations). The conditions for tenants in public housing are universally regulated by the state, with rent capped at 25% of tenants’ income, and conditions in place to minimise evictions, provide social support and promote long term housing security.
Community housing is either managed or owned by ‘not for profit’ organisations. Community housing providers (CHPs) receive funding for operations from ‘government grants, government loans, deals with councils, philanthropy, social impact investment and clever leveraging of capital (such as their existing buildings)’. According to Inner Melbourne Community legal (IMCL), in 2021 CHPs owned or managed ‘around 20,000 housing units in Victoria’ and controlled ‘$3.3 billion in housing assets’, with ‘nearly one in four Victorian social housing tenants’ living in community housing. CHP tenancies are generally not longer than a year, and legal recourse for tenants facing issues is difficult and costly.
What’s so Wrong With Community Housing?
Legal protections for tenants in community housing ‘lag well behind public housing tenants’ – with several Victorian community legal centres claiming in their experience ‘community housing tenants are more likely to be evicted, subjected to inconsistent decision-making processes and have fewer genuine avenues for review’.
Low-income tenants in community housing report facing:
Creeping rent rises
Cherry-picking of prospective tenants
An unfair combined waiting list that allows new, wealthier applicants to be chosen over people who have been waiting years
Litigation against tenants rather than negotiation
The use of fixed-term contracts to easily evict tenants, even if that means homelessness
According to IMCL, while less than 1% of public housing residents seek their legal assistance over rent, ‘rent arrears and calculations are the single biggest identified reason people living in community housing seek legal assistance’. The Victorian Housing Register in its section Understanding your Community Housing Rent states that community housing rent ‘must not exceed 30% of gross household income at commencement of the tenancy’, later slipping in that ‘rent does not automatically adjust if household circumstances change’. This means if a tenant’s income changes (for instance, if they lose their job), their rent is not recalculated to account for loss of income. While there is a requirement that the provider ‘have some kind of hardship provision strategy in place’, FOPHV have noted that ‘in practice this often translates to just a few weeks of reduced rent being ‘granted' by the Community Housing landlord’:
‘Therefore it is simply false to say that Community Housing rents are capped at 30% of household income, a fact that even some of the housing academics get wrong, perhaps because they, like many other privileged groups who advise on government policy, do not necessarily know what is happening 'on the ground'...
On this point countless public tenants have been misinformed about the protections they might lose transferring to Community Housing, being told that Public Housing and Community Housing are 'much the same thing' - all under the rubric of Social Housing. By contrast, Public Housing rents are readily rebated to 25% whenever a tenant's household income changes. It is this vital protection that literally keeps people off the streets.’
On top of this, community housing providers often add on fees for ‘services’, which if included in the rental calculations can add up to 50% of tenants’ income. FOPHV contacts living in community housing have reported service charges including ‘parking, maintenance of the grounds, and even so-called 'wrap-around' services such as communal activities for tenants organised by their landlords (often perceived as paternalistic)’. An example of this blatant gouging is provided by IMCL in their submission to the Victorian government’s Social Housing Regulation Review:
‘When John sought Inner Melbourne Community Legal’s assistance, he was in receipt of a Centrelink disability support pension of $428.85 per week. Though a condition of John’s community housing residency established that rents are set “no higher than 75% of market rent, up to a maximum of 30% of income”, he was being charged $216.15 per week – almost 50% of his income.
The amount included service charges of $45.00, though this was not explained, and a breakdown of the service charge was not offered. John found the bundling up of rent charges and service charges to be confusing.
Inner Melbourne Community Legal requested, on his behalf, that the charges be separated in line with the Residential Tenancies Act and the rent setting policy of the community housing provider (as his current charge was technically more than 30% of his income). This would mean John and other residents could more easily understand how much rent they were being charged, whether it was being properly calculated, and to ensure they understood the amount of service charges and when they were being increased.
We also requested a breakdown of the service charge so that John could ensure that the charge was based on actual costs and know what those costs were. It was not until a complaint was made to the Housing Registrar and VCAT proceedings concluded that the community housing provider agreed to change its practice.’
This is an unavoidable pitfall of privately operated social services - where private providers agree to adjust their predatory practises only after legal intervention, upholding profits before those who the system supposedly intends to help.
As a requirement of managing DHHS properties CHPs have to take applicants from the Victorian Housing Register. Which again sounds good, except unlike the (state run) DFFH, which must allocate ‘to the household on top of the list by effective date and category’, CHPs do not have to allocate housing based on need or how long applicants have been waiting. This means they can cherry pick tenants who can pay more and are considered more ‘desirable’ – wealthier applicants, applicants with no criminal history, applicants without complex mental health issues, and those who these enterprises have deemed a safer investment for their ultimate end goal of increasing profits.
Once in community housing, if you make the cut, the increased risks of making complaints or requests compared to public housing add another layer of injustice and insecurity. As stated in the ICML submission:
‘The power imbalance between renters and landlords is pronounced, particularly for social housing renters who have languished on a waiting list for a long time and know they cannot afford to rent in the private market. To make a complaint is difficult, and many rarely risk disrupting the relationship they have with housing managers to do so... Inner Melbourne Community Legal has partnerships and relationships with many health and homelessness support services. Many tell us about the difficulties their clients face with their community housing landlords… support services have told us they would not like to speak up for fear the people they support in community housing might be identified and harassed.’
An often cited statistic in pro Big Housing Build propaganda is that ‘Housing Registrar data shows that around 7.5 per cent of community housing exits are from eviction’ – a rate considered comparable to public housing (where eviction data is not provided). However, as ICML points out, this statistic defines eviction as ‘a warrant of possession is issued (purchase of warrant) and the tenancy is subsequently terminated’, meaning the bulk of tenants who are issued with a notice to vacate and leave believing this to be an eviction are not counted. In the year up to September 2021, 82% of the social housing matters dealt with by Melbourne legal service Justice Connect related to eviction. West Heidelberg Community Legal Centre’s analysis of VCAT records found that ‘long term community housing tenants were 3 to 5 times more likely to face eviction than public housing tenants’. One of Victoria’s largest community housing providers, Unison, found that ‘almost half of their tenancies ended within 18 months’ with 59% of those exits the result of ‘“negative push factors” such as rent arrears’. Half of those who had been homeless prior to their tenancy had been evicted or left within 12 months, and only 1 in 3 people who had recently left prison or other institutions were still housed in 6 months.
CHPs use of fixed term leases to evict tenants, circumventing normal processes for providing grounds for eviction, has also been broadly documented by community legal centres. Tenants can be evicted at the end of a fixed-term lease (as previously noted, typically not longer than a year in community housing) for any reason, which as IMCL observes, ‘provide a cover for evictions to occur for discriminatory and unjustified reasons’.
Another horrifying personal example provided by IMCL:
‘Joan and her adult son became tenants of a CHP after Joan was the victim of extreme family violence perpetrated by her former partner. After living in the CHP-managed property for 2 years, Joan and her son were given a ‘no specified reason’ notice to vacate. Joan was shocked and very concerned, as she had thought the rental was long-term. It had provided her with comfort and security after fleeing family violence. Joan feared that she and her son would become homeless.
The CHP applied for a possession order and, when Joan attended the hearing at VCAT, she was told that the notice had been given due to suspicions that her son was drug dealing out of the property. The CHP told Joan that a ‘no specified reason’ notice was given instead of a notice to vacate for illegal use because the CHP would not have to prove anything at VCAT.
This was the first time Joan had heard of these allegations, and she had not been asked to respond before the notice was issued. No attempt was made to sustain her tenancy. A VLA duty lawyer tried to negotiate with the CHP to adjourn the hearing so the CHP could make enquires about the alleged conduct and consider its obligations under the Charter, but the representative from the CHP refused to engage in any negotiations. Because no reason was needed VCAT made a possession order.
Joan’s lawyer entered into negotiations after the possession order was made to keep Joan and her son in the property. The CHP admitted that they had no evidence of actual drug dealing and were basing their actions on the fact that Joan’s son was inviting people experiencing homelessness into the apartment. It turned out that Joan’s son was providing food to people experiencing homelessness and there was no suggestion that he was taking drugs, selling them or allowing drug use to occur at the property.’
How is any of this acceptable for a system that’s supposed to provide safe and secure housing for the most vulnerable in our society? The Royal Commission into Aged Care provided a clear cautionary tale when it comes to privatisation of key social services. Not only were government run services found to provide ‘substantially better’ care than ‘both for profit and not-for-profit’ services, but for-profit providers were ‘repeatedly found’ to put financial motivation and profits ‘before the provision of care’.
But once again an Australian government is ignoring the advice of costly Royal Commissions and reports, and of the only actual stakeholders we should be listening to – tenants. There are mountains of studies and reports about the causes of homelessness and solutions needed. As Wood, Johnson, Watson and Scutella argue:
‘...public housing is the most important factor in preventing homelessness among vulnerable people. Public housing is particularly effective because it is affordable. It has also traditionally offered a long-term refuge for precariously housed people. This is because public housing leases provide the benefits of security of tenure commonly associated with home ownership.’
They also note that: ‘The empirical evidence also suggests that community housing fails to provide the same protection for people at risk of homelessness’. Why is this? Because, as Friends of Public Housing Victoria and Defend and Extend Public Housing (DAEPH) have stated, community housing is run for profit, and this motive will always run counter to what is best for people. As DAEPH bluntly put it:
‘It is false to give the impression that Community Housing Organisations have, as a top priority, the goal of housing homeless people - unless you consider the church groups set up by government to mop up the social fallout of what is essentially the privatisation of Public Housing. Again, homeless people are perceived as not 'market viable'.’
The Covert sellout
So then why not have both? Why are we not (at least) building community housing alongside public housing, but instead demolishing and selling off public housing and land en masse? Why, according to a 2019 RMIT research report, is there currently ‘less public housing dwellings in Victoria today than there were 10-years ago – whilst community housing stock has doubled’?
Because the Victorian government doesn’t serve the people. It serves capital, it serves property developers and investors, CEOs and landlords, and selling out public housing is entirely in their interests – no matter which party is in power. Public housing in Victoria isn’t being abandoned because it’s inherently dilapidated and dysfunctional; it’s been deliberately neglected and underfunded for years to enable a benevolent sounding private takeover. Over the last 10 years Victoria has ‘consistently spent less on maintaining public and social housing properties than all other states’, despite the issue being raised by the Victorian Auditor-General numerous times. The Auditor-General’s 2012 Report, Access to Public Housing, cited ‘multiple instances since 2006, where Departments and Ministers were made aware of the deterioration of public housing, yet no action was taken’.
RMIT urban researcher David Kelly explained the callous reasoning behind this neglect:
‘"They've become more and more expensive to maintain because they've been neglected for so long," Mr Kelly said. “Because they've become more expensive, the government just chooses not to actually spend anything on them, wait until they come to a stage where it's cheaper now to demolish them and rebuild them than it is to actually maintain.” Mr Kelly has described this as a managed decline. “Where the government is trying to bring the housing stock down to a certain level so that the business case for renewal stacks up better than maintenance.”’
The 2019 RMIT report, Understanding the assumptions and impacts of the Victorian Public Housing Renewal Program, notes that:
‘According to the Productivity Commission, in the past ten years, the community housing sector has doubled its housing stock nationally – from 38,524 to 80,233 – primarily due to stock transfers from the public sector. State Governments in Australia all have public stock transfer policies with the aim to expand the role of community housing in the provision of social housing.’
The Victorian Community Housing Industry Association (CHIA) represents hundreds of CHPs, with the stated aim of supporting ‘the growth of not-for-profit community housing organisations’. It played a ‘significant role in shaping the Commonwealth National Housing and Homelessness Agreement (NHHA)’, and ‘claims to have played a key role in the creation of the Housing Finance Investment Corporation (NHFIC), a Commonwealth lender established in 2018 that issued its first 10-year interest-only (fixed under 3%) $315m bond to the community housing sector’.
CHIA CEO salary according to an entry on Glassdoor.
The Victorian Government’s supposedly ‘independent’ Social Housing Regulation Review panel includes among its members ‘a Director of the peak body of the Housing Associations’, a ‘former Executive of a Housing Association’ and a ‘former Director of KPMG and a former commissioner of the ACCC’. Organisations, as stated by DAEPH, clearly ‘likely to support privatisation rather than Government ownership and control’, regardless of what’s best for tenants and the Victorian people.
Again, as stated bluntly by DAEPH:
‘We do not expect the Review to fulfil its stated mission, to base its recommendations on the input and interests of tenants, or its aim to give tenants a stronger voice. We say this because the Review reports only to Ministers in a Government which has committed to continue the process of privatization and to avoiding full discussion of the issue. The Andrews Government has committed to continue the process of privatization in its Public Housing Renewal Programme, and its 10-year Big Build Strategy. The Panel has already committed to complementing that strategy, without first asking whether it serves the interests of Government or the tenants.’
The Victorian government is willing to pour unfathomable amounts of funding into the ‘Big Housing Build’ precisely because this money isn’t actually going to the people, it’s going to the capitalists the government serves. We need to stay aware of what is really going on in our neighborhoods and to our social services behind the façade of benevolence liberal governments weaponise so well. The feel-good spin of ‘social housing’ is being used to sell out the Victorian people’s interests for private profit, and it’s our responsibility to make sure our friends, families, co-workers and communities don’t fall for the bullshit.
In a nation where the government actually served the people this money would go towards the proven best option for the people – public housing. But we cannot ever expect a government that serves the interests of capital to do what is right by the people. They won’t listen to our pleas and polite requests; they won’t listen to submissions to their ‘independent’ reviews. They will always do what is in the interests of capital until the united working people can take the power to make these decisions into our own hands. The fight to save public housing will only be won through force. If we lose, the Victorian people will suffer for generations, while rich property developers and ‘non-profit’ CEOs get richer.
References:
Thumnail Image: Neb, CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0, via Wikimedia Commons.