State land ‘fire sale’ as housing crisis worsens

More than $50 million worth of state government land that could have been used to bolster Victoria’s social housing stock by 800 homes has been sold over the past four years, at the same times as waiting lists for properties have surged.

The Community Housing Industry Association (CHIA) review of recent land sales identified 14 sites, totalling 16 hectares, that could have been prime candidates for social housing had they stayed in government hands for redevelopment, or been sold to private developers with strict affordable-home targets.

Hundreds of extra affordable homes could have been built on suitable government land sold in the past four years. Credit: Eddie Jim

About 10,000 people have been added to the social housing waiting list this decade and more than 60,000 Victorians were on a waiting list as of June last year, according to government data. The average wait for public priority access was 18.1 months in the 12 months to June 2023, up from 12.4 months in the 2020-21 financial year. For victim-survivors of family violence, those figures are 23.6 months and 11.1 months respectively.

Demand is especially high in Melbourne suburbs such as Dandenong and Werribee, and regional cities such as Geelong and Ballarat, according to Homes Victoria’s preferred waitlists and the University of New South Wales’ housing needs dashboard.

The social housing sector and those waiting for a subsidised home are urging the government to speed up supply as part of this year’s budget, especially given the concerns about whether Victoria will meet its ambitious targets laid out in last year’s housing statement.

The association, which crunched the numbers as part of its pre-budget submission, says the locations sold by the government could have yielded at least 800 homes. One of the sold parcels of freehold land was adjacent to Keysborough Primary School on Darren Road, Springvale South. The 1.25 hectare site was sold to developers in 2020 for $5.6 million.

Another was 0.24 hectares of surplus Crown land along Mercer Street, Geelong, that sold that same year for $780,000. Two homes acquired but in the end not required for the East West Link, and surplus government property on Chapel Street, St Kilda, also made the list.

Public housing is owned and managed by the state government, while community housing is managed but not always owned by not-for-profit organisations. In either case, tenants pay below-market rent. Social or affordable housing is the umbrella term that applies to both models.

Community Housing Industry Association chief executive Sarah Toohey says Treasurer Tim Pallas’ 10th budget should set aside more state government land for public and community housing.

“The government would forgo some revenue in sales, but we think what it gets back in terms of value with roofs over people’s heads, not having people sitting in emergency rooms because they’ve had an accident sleeping rough or being picked up by police, adds far more value to the state budget than what these lands sales would have accounted for,” Toohey said.

“We think state land that has been sold and continues to be sold could make an excellent pipeline.”

The association also wants the Allan government to help transform community boarding rooms into self-contained units and appropriately fund tenancy support programs.

Melbourne woman Absa, who came to Australia from Somalia as a refugee in 2003 and did not want her surname used for privacy reasons, said she had been waiting for a suitable affordable home for almost two years.

“I’m homeless and I can’t do my studies properly,” she said. “I don’t know what to do. I have nowhere to stay except the public park and other places.”

Coalition housing spokesman Richard Riordan said more subsidised housing built by the private sector was the way forward. The regional Liberal MP insisted Labor’s big housing build had become “a big housing mess”.

“The housing crisis in Victoria can only be reversed with a clear collaboration between government and private housing providers,” Riordan said. “The Allan government has demonstrated through four years of housing mismanagement that it cannot build the homes Victoria needs alone, and must reverse its high-taxing, over-regulated housing market conditions.”

Some planning experts and the City of Melbourne have urged the government to implement inclusionary zoning systems, as done in parts of Europe, which would require developers to set aside a specific number of units in a new housing development for people on low incomes.

Greens leader Samantha Ratnam accused the government of conducting a state land “fire sale” in the middle of a housing crisis. The party, which can control the balance of power in the upper house, has long called on Labor to drastically increase the number of government-owned and operated homes.

“The Greens have been pushing for a moratorium on the sale of surplus Crown land, until the government has undertaken Treaty negotiations and set aside sites suitable for public housing,” Ratnam said.

“With over 120,000 people on our state’s wait list for public housing, and crisis housing services at breaking point, Labor should be keeping this land and directly building housing.”

An Allan government spokeswoman did not respond to questions about whether this year’s budget would include more incentives for social housing providers. But a Homes Victoria spokesperson did say that more than 7000 households were moved into social housing last year, a year-on-year increase of 29 per cent.

“We are investing record amounts to increase the supply of social housing across the state,” the spokesperson said. “Under the historic $5.3 billion Big Housing Build, we are on track to deliver at least 12,000 new homes for Victorians.”

Australian Bureau of Statistics data released last week revealed that home-building approvals have crashed to their lowest level in Victoria in more than a decade. Labor last year promised to build 800,000 homes over the next decade, the equivalent of 80,000 dwellings a year, a target that industry experts say Victoria will not be able to meet this year.

The 2024 state budget will be handed down on Tuesday, May 7.

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