Private homes across Melbourne’s inner west are being acquired by the state government at market rates to accommodate tenants in the soon-to-be demolished public housing towers.
The project to demolish the 44 high-rise public housing towers has found opposition in unlikely allies – among them a former Supreme Court judge and the state’s powerful construction union – as a public parliamentary inquiry will from next week examine the controversial project.
The public housing towers at 33 Alfred Street, North Melbourne are being prepared for demolition.Credit: Chris Hopkins
The Sunday Age can reveal the government is buying private homes at market rates to relocate displaced residents from the first three towers slated for demolition, with agents for the government directly soliciting home owners in Flemington and Kensington.
The government has bought 16 properties since January, while simultaneously selling other public housing and land used for public housing.
Homes Victoria chief executive Simon Newport recently confirmed the acquisitions during an appearance at the parliamentary public accounts and estimates committee, where he also revealed 149 public homes would be sold this year. The Sunday Age has confirmed public housing and land sales by the director of housing in Braybrook and Heidelberg West were not advertised on the government’s property sale transparency website.
Under the plan announced by then-premier Daniel Andrews in September 2023, days before he left office, 44 high-rise public estates across Melbourne will be razed, leased to private companies for 40 years and rebuilt with a mix of community housing (comprising properties aimed at people on the housing waiting list that are owned, developed and maintained by not-for-profit organisations rather than the state) and private rentals run by consortiums. No traditional public housing will be rebuilt.
Then-premier Daniel Andrews in 2023 announced the plan to demolish housing towers.Credit: Paul Jeffers/Elke Mietzel
The land and buildings are designated to revert to state ownership in four decades.
While Homes Victoria says 70 per cent of the residents at 33 Alfred Street in North Melbourne and 120 Racecourse Road and 12 Holland Court in Flemington have already moved out, the logistics are complicated for long-term residents such as Hawa Del.
After 34 years in her three-bedroom North Melbourne tower flat, the 58-year-old Somali-Australian community leader has been offered a one-bedroom apartment nearby.
It’s an offer she has refused, as her current home is a vital hub for her five grandchildren, who she cares for while their mother works as an aged care nurse on weekends and weeknights. Del’s adult son, who recently completed a PhD, also lives with her. “I’m not moving,” she says. “I have pride.”
Public housing resident Hawa Del says she won’t be moving from her North Melbourne home of 34 years.Credit: Chris Hopkins
Newport, the Homes Victoria boss, has previously said that residents moved out of towers would be moved into newly built social housing nearby. But much of the new social housing comprises one- or two-bedroom homes, which are not big enough to accommodate many larger families who live in the towers in three-bedroom apartments.
The government’s reliance on private finance for the four-decade plan will be a key focus for the parliamentary committee, which has a majority of non-government MPs, when hearings begin next week.
An agenda from a meeting on July 20, 2023 – two months before Andrews announced the plan – shows senior officials from the Premier’s Department, Treasury and Homes Victoria were in talks with major superannuation funds, including Aware Super Real Estate and IFM Investors, to discuss “delivery models that would enable investment”.
Ministerial diaries show that by January 2024, the government had formalised the relationship with superannuation funds. Housing Minister Harriet Shing attended an “institutional investment advisory group” meeting chaired by then-treasurer Tim Pallas, whose stated purpose was to “support implementation and delivery of the government’s housing statement”.
The advisory group is dominated by the nation’s largest superannuation funds, including HESTA, Cbus and Australian Super.
Former Supreme Court judge Kevin Bell has condemned the government’s approach, arguing in his submission that its failure to consult residents before the decision was a violation of international human rights law. He labelled the process an “insult to human dignity” in his submission to the inquiry, and “absolutely deplorable” in an interview.
Former Supreme Court judge Kevin Bell says he owes everything to public housing.Credit: Jason South
For him, the issue is deeply personal.
“Secure public housing was the foundation of my life,” he told The Sunday Age. The oldest of eight children in a family he describes as “working poor”, Bell said he owes “everything, really, to public housing” where his family lived in Melbourne’s suburbs in the 1950s.
“We went to local schools, the local doctor, local sports, local everything. And the thought of that just being disrupted, and everybody having to move somewhere else – I just can’t conceive of that.”
His critique is echoed in many of the more than 800 submissions to the inquiry.
In a notable submission, the construction union, the CFMEU, argued against demolition. Despite its members standing to benefit from the work, the union backed research showing that retrofitting the towers would be cheaper and more sustainable, and lamented the missed chance to develop skills in the growing retrofit sector.
Eight inner-city councils that host towers are deeply divided on the demolition in their submissions, but almost universally critical of the government’s process and proposed outcomes.
Some, like Yarra and Merri-bek councils, have formally resolved to oppose the demolition entirely, while Darebin and Hobsons Bay are demanding the state government release evidence to justify its “demolish-all” approach over renovation.
Even the councils that support redevelopment in principle – which include Stonnington, Port Phillip, Moonee Valley and the City of Melbourne – have condemned the lack of genuine consultation and slammed the promised 10 per cent social housing uplift as “inadequate”. Among those submissions are demands there be no net loss of family-sized housing.
In his recent book, Housing: The Great Australian Right, Bell argues for a major investment in social housing (both public and community).
Victoria’s current social housing stock sits at just under 3 per cent of all housing. It’s a figure Bell dismisses as little more than an “ambulance system ... just an emergency company” – a last resort for the most needy, unlike the system that provided a foundation for his own low-income working family.
A healthy system, he argued, requires social stock of at least 10 per cent to properly balance the entire housing market and take pressure off private rents.
With the inquiry set to begin, residents are also pursuing their final legal avenues to halt demolition of the towers. Last week, they launched an appeal against the Supreme Court decision that dismissed their class action lawsuit.
At the same time, the government is seeking to manage the negative attention by putting out a $300,000 tender for a “public understanding initiative” to highlight the project’s benefits.
In a statement, a Homes Victoria spokeswoman said the relocations were progressing in a “careful and respectful way”, and more than 70 per cent of residents from the first three towers slated for demolition were now in new homes. The spokeswoman said the North Melbourne and Flemington redevelopments would boost social homes on those sites by 39 per cent and that funding for the program included property purchases.
However, the agency failed to answer a series of direct questions from The Sunday Age. It would not provide the total cost for the 16 homes it recently purchased on the private market.
Homes Victoria also refused to explain why the recent sales of public housing assets in Braybrook and Heidelberg West were not advertised on the government’s own public land sales website.
For now, Hawa Del continues to wait, and fight. Two weeks ago, she spoke on the steps of her building in the rain to protesters in a snap rally to stop contractors beginning pre-demolition works.
“We need respect,” she said. “We need help.”
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