Experts say state govt has ‘wasted’ millions on public housing tenant relocation

The Andrews government has spent millions of dollars buying and leasing privately-owned homes for public housing tenants in some of Melbourne’s most in-demand suburbs.

The state government has spent millions of dollars buying and leasing privately-owned homes for public housing tenants. Picture: Andrew Henshaw

The state government has spent millions of dollars buying and leasing privately-owned homes for public housing tenants in some of Melbourne’s most in-demand suburbs.

Critics of the state government’s $5.3bn Big Housing Build told the Sunday Herald Sun most of the 22 public housing properties being knocked down and rebuilt were “perfectly fit for purpose” and only in need of refurbishment.

Among first complexes to be demolished are the Barak Beacon complex in Port Melbourne, the Emerald Hill site in South Melbourne and another complex in New St, Brighton.

Hundreds of the former tenants have been moved into subsidised private rental properties nearby, or properties “spot purchased” by the government.

A government spokesman said the government was currently renting 111 properties across the state, including in Port Melbourne, Brighton and South Yarra, but would not divulge how many were in each suburb, nor how much the properties were costing taxpayers.

Public housing tenants pay 25 per cent of their income in rent, regardless of how much the government pays their landlord.

Hundreds of the former public housing tenants have been moved into subsidised private rental properties while construction is taking place. Picture: Nicki Connolly

Former Barak Beacon resident Jeannie Ercerg said the amount of money being spent knocking down public housing properties was “crazy”.

“One of my neighbours, they bought her a place to live in Elsternwick, the other neighbour … they bought him a two bedroom house in Port Melbourne,” she said.

“They told me the government paid $1.1m for it.”

RMIT Professor Libby Porter said Homes Victoria was throwing “huge money” at unnecessarily relocating people in the private market.

“The government have said: Oh dear, we’ve got to displace this person and the only way we’re able to do it is to buy something in the private market,” she said.

She said the government’s “strategic disinvestment” in public housing paved the way for Homes Victoria to create deals with developers to boost the construction industry.

“It’s (Big Build) happening with no sense of strategy around it other than a kind of reaction to a crisis,” she said.

Architect Simon Robinson, co-founder of not-for-profit architectural and research firm, Office, said the government could have saved more than $100m on just two of the estates by refurbishing them instead.

Former public housing resident at Bangs St Prahran, Jeannie Ercerg and her daughter, Jasemine. Picture: Nicki Connolly

One of Office’s feasibility studies found $88m could have been saved by refurbishing Port Melbourne’s Barak Beacon, including $16m on relocation costs.

Another found $15.7m in relocation costs could have been saved at Ascot Vale.

The government has previously said it had a relocation budget of $150 per dwelling, per day, for one of its Big Housing Builds projects, at North Melbourne.

Mr Robinson said subsidising private rental properties for public housing tenants, and “spot purchasing” homes was costly.

“If you’re buying apartments in Port Melbourne that’s obviously going to be quite expensive,” he said.

In Port Melbourne the average rental price is $825 per week, while in Brighton the average rental costs $1,270 per week.

A Homes Victoria spokesperson said the government was working to “replace and renovate outdated homes that do not meet current design standards”.

Less than 3,000 homes have been completed in the five years since the Big Housing Build began, while another 7,600 homes have been started.

The projects are expected to boost Victoria’s social housing supply by 10 per cent.