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Growing up poor in Australia: what has happened to public housing?

A good job, like where you get like heaps of money. I’d be like a decent mum, like a husband with no violence and everything, so it could be a happy family, you know, but like that would never happen…

Public housing never used to be the centre of disadvantage. What changed? Dean Lewins

A good job, like where you get like heaps of money. I’d be like a decent mum, like a husband with no violence and everything, so it could be a happy family, you know, but like that would never happen…

Jessica, a 12-year-old from Claymore in Sydney’s south west, is not optimistic about her future. Monday’s Four Corners documentary Growing Up Poor in Modern Australia asked why more wasn’t being done to break the cycle of disadvantage for the children of Australia’s most disadvantaged suburbs. The report focused on five families from Claymore, in south-west Sydney.

A suburb of 3,300 residents, Claymore was built as a public housing estate by Housing NSW in the 1970s. By 2011, it was one of Australia’s poorest suburbs, with a median household income of $588 per week, around half the national average. It was also one of the youngest, with 40% of residents aged under 15, compared to 19% for Australia. But Claymore is not unique. Concentrations of inter-generational disadvantage have developed in public housing estates in all of Australia’s capital cities.

Where does disadvantage come from?

Australia’s public housing has not always been associated with disadvantage.

The Commonwealth established a Housing Commission in 1943, recommending a national target of 80,000 publicly built dwellings per year. The aspiration was to provide workers’ housing to support Australia’s industrial development.

Most of this housing was initially built in large estates on the edge of our cities. In NSW, large estates were built in the 1960s, such as Mount Druitt with 32,000 people in 8,000 properties. This golden era of mass public housing had come to an end when Claymore was completed in the 1970s. By 1978, the Commonwealth had greatly reduced the amount of funding for building and maintaining public housing. The result of dwindling funds was a shift in the role of public housing, from a mainstream option to marginal sector with a highly disadvantaged tenant base. By 2006, around 90% of tenants were either on welfare benefits or experiencing some other form of social deprivation.

A market solution?

Faced with ageing housing stock, disadvantaged tenants, and growing waiting lists, Australia’s government housing agencies have turned to the private market.

By offering housing vouchers in the form of Commonwealth Rent Assistance, they have looked to private landlords to house many of Australia’s poorest people. And they have looked to private property developers to fund the renewal of their housing estates through policies branded as “social mix”.

Social mix solutions have been pursued since the 1980s in Australia. They can be achieved by selling public housing dwellings to tenants or on the private market, or by building new privately-owned dwellings in the neighbourhood in partnership with a property developer. The latter strategy has been the most popular. As the Four Corners documentary showed, such a project was underway in Claymore, with almost all of the existing public dwellings earmarked for demolition. These would be replaced with 1,300 new dwellings. About 70% of them would be sold to private buyers with the remainder returned to public housing tenants.

Who benefits, at whose cost?

The benefits of these social mix policies - by reducing concentrations of public housing – are said to be wide ranging, delivering improvements in economic, social welfare and health. These include a more vibrant local economy, reduced anti-social behaviour and less stigma. However, the evidence for these claimed benefits is less than convincing.

The economic benefits for government receive less attention, but are arguably much more significant. By getting private property developers to partially fund the redevelopment of their decaying housing stock, housing agencies can get a return on their only real asset – land – and address an overwhelming maintenance backlog.

At Bonnyrigg in Sydney for example, the $733 million redevelopment of the public housing estate by Becton (a private developer) and Housing NSW has replaced 833 public housing dwellings with 2,330 new dwellings. Only 699 of the new dwellings have been retained as public housing. The development has been rebranded as “Newleaf”.

Social mix solutions, while attractive to government, impose costs on the tenants of public housing. In Claymore, only 99 houses have been demolished to date and the project is has now stalled after a change of state government. As reported on Four Corners, “residents now say maintenance on their homes has almost ceased and there are houses all over the suburb boarded up and empty”.

Research has also pointed to unintended negative consequences of social mix policy. Moving residents temporarily or permanently out of their neighbourhood during redevelopment can be disruptive to social networks and children’s schooling. Reducing public housing supply at a time where public housing waiting lists are at record levels (56,000 in NSW and 37,000 in VIC) also comes at a large social cost, with high-needs households pushed into the under-regulated private rental market.

A non-market solution

The stagnation of public housing funding has led to concentrations of some of our most vulnerable people in Australia’s outer-suburbs, as illustrated by the children of Claymore. Social mix policies that break up these concentrations of housing may only relocate this disadvantage, rather than address it.

A non-market alternative is to inject funds into the ailing public housing sector. If public housing numbers were increased through significant investment, the selection criteria could be broadened to allow a much wider base of tenants. This would start to “normalise” public housing, returning it to its original intent as a mainstream affordable option for Australians.

For governments struggling to just maintain existing levels of public housing stock however, harvesting land value by allowing private market development of their assets seems to be the only solution - whatever the cost.