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Issue #1908      March 23, 2020

Gentrification by stealth

On 4th March, there were plans to have a rally against the privatisation of the public housing estate on Walker street, Northcote – just north of Melbourne (Narrm). The rally was organised by Friends of Public Housing, one of the groups in the Save Public Housing Collective (SPHC). Unfortunately, due to concerns about COVID-19, the rally was cancelled – but the fight continues.

The Victorian government began a Public Housing Renewal Program (PHRP) in 2017 that aims to “upgrade” public housing estates with private developers. The public housing at Walker street is one of the ten sites undergoing “redevelopment” listed on Housing Vic’s website, the others include:

  • Ascot Vale estate
  • New Street, Brighton
  • Gronn Place, Brunswick West
  • Bills Street, Hawthorn
  • Tarakan and Bell Bardia estates, Heidelberg West
  • Abbotsford Street, North Melbourne
  • Oakover Road and Railway Place West and Stokes and Penola Streets, Preston
  • Bangs Street, Prahran
  • Flemington estate (walk-ups only).

The Victorian government describes this redevelopment on Housing Vic’s website as a project to “create at least 1,800 new public housing homes, including social, private and affordable housing.” The first thing that leaps out at you when you read this is: wait – 1,800 public housing homes, including private housing? Isn’t that an oxymoron? Also, what is “social housing”? Who decides what “affordable” is? What happened to, you know, public housing?

Social housing

In 2015, the Victorian government started to publicly discuss their plans to “redevelop” public housing and to transition into what they call “social housing.” The Andrews government made this official in the 2016 Housing Act which was based around “social housing” – a combination of both public housing (state-owned housing) and “community housing” (owned by private not-for-profits). The waiting list for public housing in Victoria is now for social housing, a list combined of both private and public housing options. There are more than 15,000 applications for social housing in Victoria, with currently 7,267 in total on the transfer list, 3,687 priority access, and 3,580 register of interest applicants. The government has hidden its move to privatise public housing under the “social housing” terminology.

Community housing

This is housing that, according to the government, has transitioned from the public sector to the “community sector.” SPHC has elaborated on just what exactly the community sector is – private, not-for-profit organisations. Rental costs under community housing increase from twenty-five per cent of renters’ income to thirty per cent. SPHC also note that renting conditions are not as secure as under public housing. The collective emphasises that this thirty per cent of income can just be a baseline for rent – the not-for-profits can add extra fees on top of this, or request that a tenant’s Rent Assistance is paid fully to their organisation. Community housing also does not guarantee accessibility modifications on units for tenants with a disability.

It is undeniable that there are much-needed improvements and upgrades to public housing so that public tenants are not living in poorer conditions than those in the private market. However, under capitalism, the state government needs to find a way to turn the money spent into a profit. It is clear that it has found its path to profit through transitioning properties into the “community sector” and selling off the rest. For Walker Street, Northcote, this redevelopment means a total loss of the 87 public housing units to be replaced by 143 private units and 106 community units, according to an RMIT University report.

The RMIT report also notes how the case study on a public estate in Kensington, north-west of the city, showed results that completely contradicted government rhetoric on the positive outcomes of transitioning to the “community sector.” The Kensington buildings were in some cases falling apart due to government neglect, and so the government went about to “redevelop” the land from 2002 until 2012. This resulted in the 694 public units dropping to 429 public units. The rest of the redeveloped property, 512 units, became private – with fifteen of those becoming community housing. Only twenty per cent of the previous public tenants returned after the development. Meanwhile, the developer was able to make a return of over $44 million, and an estimated net profit of fifty-one per cent – much greater than the industry standard of twenty per cent. There are now very few owner-occupiers in the private units, and private tenants mostly occupy the private units. The two groups socialise separately as well – public tenants keep to themselves and their community organisations and private tenants go out to what is now gentrified Kensington.

Friends of Public Housing posted an update about how the public estates in Heidelberg West, northeast of Melbourne (Narrm), are now new apartment blocks, of which only fifteen per cent remained public. Many people lost their homes in their process. These transitions to social and community housing are causing financial and emotional strain on public tenants that can lead to suicide. The state is complicit in these deaths as it continues down the path of privatisation.

It’s important to note that the Kensington case study was conducted three years before the 2016 Housing Act and four years before the Public Housing Renewal Program. It’s evidence that the government chose to move ahead on this trend so that it can turn a profit, even while knowing that it would cost public tenants’ livelihoods. In order to do this, they have created the “social housing” spin to make it seem like a positive transition to the general public.

The current housing crisis is full steam ahead – over 24,000 people in Victoria and 116,000 nationwide are homeless (2016 Census) – with women, Aboriginal and Torres Strait Islander people, youth, and disabled people most at risk of homelessness. The current struggle for secure public housing under the Victorian government echoes struggles around the country.

As a response, the Andrews government opened an Inquiry into Homelessness in Victoria last year. In Friends of Public Housing’s submission to the inquiry, they emphasised that the push towards social housing is “ideological and not based on any evidence or reason” – as shown by the Kensington case study. They demand an end to the combined waiting list of both public and community housing and pointed out that “public housing is a healthy restraint on the cost of the high private rental market.” This is an important point to make, because not only does privatisation create an immediate profit for the capitalist class, it also lifts the bottom floor of rent prices, causing the rental market to become even more expensive. Saving public housing is an issue for all, not just for public tenants.

In Fair Go for Pensioners’ submission to the inquiry, they also note that of the thirty per cent of Australian’s who rent, three per cent is through public housing, down from six per cent two decades ago. This correlates with the beginning of mass privatisation that began in the 1990s mentioned in article “Solidarity with RTBU VIC! NO PART-TIME” (Guardian #1902)

Daniel Andrews may have promised us to stop privatising public services before his re-election last year, but we are yet to see Victoria Labor slow down on selling out what is ours.

The Communist Party of Australia demands that governments make emergency housing a top priority during COVID-19 public health crisis and reverse the present trend where governments spend six times more on private housing – through grants and subsidies to home buyers – than they spend on public housing.

Next article – How to Understand Democratic Socialism

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