The truth about 'generations' of tenants at Millers Point and The Rocks

There's another incorrect impression getting around in media reports about tenants at Millers Points and The Rocks whose families have lived there 'for generations'.

Furious Miranda Devine at the Telegraph castigated them as 'hereditary housos' (no link – we don't link to the Terror). And lots of other talkback callers and newspaper commenters have gotten indignant at the thought that multiple generations of a family should live in public housing.

 
As we say, the impression is incorrect.

There's a variety of people living in social housing at Millers Point and The Rocks. Most got their tenancies according to the usual rules for social housing: they applied to Housing NSW (or before it, the NSW Housing Commission); were eligible for a tenancy in inner city; and, when a vacancy came up in Millers Point or The Rocks, they accepted it.

Some others became tenants in another way – but this is also quite within the usual rules for social housing. They first lived in their homes as non-tenant members of their households (typically, as the tenant' spouse or adult child) and when the tenant died or moved away permanently (typically, to a nursing home), they applied for 'succession' of the tenancy. (At least until recently, it was not considered reasonable or humane to insist that a person eligible for social housing and living in social housing should have to move out of social housing because the household member on the tenancy agreement had died or moved away.)

A small but significant number of tenants at Millers Point came to live there in different circumstances. They've lived there since before the Housing Commission took over the properties in the 1980s. Originally, their landlord was the Maritime Services Board, which let dwellings in Millers Point to people who worked in harbourside industries. Many of them worked on the wharves or the ships in dock, some of them operated boarding houses for workers and retirees from those industries (like our correspondent's mother, who was originally a nurse).

And some of these people are from families that have lived and worked in Millers Point for generations. (The MSB itself took over from the Sydney Harbour Trust, which had let dwellings to workers since the turn of the century, when it resumed the area following the 1900 bubonic plague.) Many of these people are not working now, on account of their advancing age, but they did work, as did the generations before them.

The social impact assessment (SIA) reports on the lengths of tenancies at Millers Point :

• 157 (45 percent) have been in their current tenancy for 10 years or less; 
• 91 (26 per cent) have been there for 10-20 years;
• 66 (19 per cent) have been there more than 20-30 years;
• two have been there more than 30 years.

There's a big proviso on these figures: they refer only to tenants' current tenancies, and some tenants have had prior tenancies in Millers Point, having moved premises as circumstances change. So the figures generally undercount the length of tenancies in Millers Point. 

The SIA also reports that there are 12 households (containing 15 persons) whose families have lived in Millers Point for 'generations.'

Letters to the editor: Millers Point

This letter, penned by a daughter of Millers Point, was recently sent to the Sydney Morning Herald. As far as we know, it has not been published. It should be.

***

I sit here with tears in my eyes so I cannot pretend that I do not have a deeply personal and emotional connection to the proposed removal of the social housing residents of Millers point. I grew up in a terrace in Lower fort street and my mum still lives there as she has done so for 40 years, laboriously maintaining and restoring her home (largely herself). Even if she is forced to move away, that house will always be our family home and the fact that she doesn't own it does not make that connection or the emotional distress any less valid.

When I was growing up our terrace was, like many in the area, a Maritime workers owned boarding house populated by single old men who had worked on the wharves. These men had lived here through their working life and now into their retirement. Our men were "Jocky" and "Bluey". "Jocky" was a Scotsman who I loved dearly. We watched Sale of the Century each evening and shared chocolate biscuits. "Bluey" would say "respect your mother" if I gave her too much lip and would ball room dance with me in the kitchen at Christmas.

Mum assumed responsibility for our terrace when the former landlord moved on and it was always understood that these men would stay in their home with us as long as they wished. They were family to me and my childhood was infinitely enhanced by their presence and changed by their passing. We still refer to those rooms as Jocky's and Bluey's. Times changed as did the government department overseeing the property, but it was always our home. That is our story and if you scratch the surface in Miller's point there are a myriad of colourful, complex and moving stories to be told. There are of course such stories everywhere, the difference is here all our stories are entwined and many go back generations.

I do not live in Millers point and have not done so for many years. The announcement last week was not something which was completely unexpected. Indeed the community has been living in the shadow of the threat of this for years. A shadow of uncertainty which has pervaded everyday life and had a detrimental effect on many.

Never the less, reading the media over the last few days I have been profoundly moved. These are people I know. People who are part of the fabric of this community and hence my life. I see people in the articles who helped out at the canteen when I was a primary school on Observatory hill, people who brought my dog back when he escaped because they knew he was mine and where we lived, people who STILL stop me in the street and tell me I haven't changed since I was a baby. Living outside this community now I can fully appreciate how unique that experience is anywhere, let alone in Sydney today.

The letter which was handed to my mother last week said that attempts would be made to relocate her "close to family and friends".  I am my mothers family. I would welcome her anytime but she does not want to leave her home. Not because it is in a street has recently been deemed a desirable location (when 30 years ago most did not see its virtues) but because it is her HOME. Much as we love each other, My mum does she does not want to move. Her friends and support networks are in the Millers point community, her heart is there, her past  and her memories are there and she has always seen her future. As do many others with deep connections to one another and to the area. The human impact cannot be underestimated.

How many people know their neighbour these days? How many would give them the keys when they go away? They do in Millers Point. People here care about each other. They attend the funeral when a member of the community passes away. A good many came and celebrated my 1st AND my 21st birthdays in our backyard. They know the older members who need a helping hand or should be checked on if they haven't been seen on their daily walk. If an young community member is courting trouble, elders of the community will engage them or their parents and express concerns. Until the local corner store was sold as a private residence in the last few years the owners would run a tab if someone forgot money for milk or offer some of their home made falafel for you to try. Millers point is a community in the true sense of the word. Community does not mean people who live geographically close to one another. It is something which evolves over time if nurtured and it certainly cannot be manufactured or constructed.

New residents to the community have told me in the park that they are thrilled to have such a welcoming and supportive community. Indeed many have expressed that they have moved here because of this. Miller Point truly is, as the state heritage register described it, a ''living cultural landscape'' with ''an unusually high and rare degree of social significance''. I can tell you this as I was fortunate enough to grow up in this community, observe the changes over the last 30 years and now visit it regularly with an outside perspective.

Miller's Point is the type of community I think most people would want their children to grow up in and their parents to grow old in. A community spirit born of continuity and time. The Millers point community can, and has evolved. From the earliest public housing and Maritime workers accommodation, it has become a mix of corporate real estate, private and social housing. My understanding is that this integrated model is now widely recommended to prevent social housing area becoming socially depressed.

Surely the largely long term and often elderly residents should be treated with more compassion and respect than is being shown. Equally a community without youth has no future and this should also be considered. The significant economic benefits of true community, and the burden this removes from social resources should be supported, allowing our city to become more viable, integrated and community minded. Millers Point is an integrated social success. It should be recognised, celebrated and not destroyed. 

The truth about 'subsidies' at Millers Point and The Rocks

When the NSW State Government announced last week that it would sell all the social housing at Millers Point and The Rocks, it highlighted the issue of social housing 'subsidies' there. It gave the impression that taxpayers' money – and lots of it – is being paid to tenants. This is incorrect.

 
Said Minister Goward:

Subsidies to tenants in the last year alone reached $8.89 million, with individual tenants receiving subsidies as high as $44,000 per annum. This compares to subsidies of $8,000 per year in Campbelltown, $7,000 in Gosford, and $11,000 in Wollongong. For every subsidised tenancy in Millers Point, the Government could assist 5 tenants in Warrawong, or 3.5 tenants in Newcastle or Minto.

The Government's media release refers variously to subsidies 'paid' and 'funded by the NSW taxpayer', and 'received by' tenants, all in dollar amounts.

The truth is that not a dollar of money raised from taxpayers is paid to public housing tenants or otherwise credited to their rent accounts. Not one dollar. Tenants pay money to Housing NSW, not the other way around.

The subsidies to which the Minister refers are accounting entries. The 'subsidy' for each tenancy is the difference between the 'market rent' for the property as assessed by the NSW Land and Housing Corporation, and the rent actually paid by the tenant, rebated according to the usual rules of Housing NSW's system of income-related rents.

The market rent for a property does not reflect the cost to the NSW State Government of providing housing or related services at the property. The market rent for a property can go up – and hence the 'subsidy' go up – without any change in the housing being provided at the property, or in Housing NSW's costs. (Housing NSW need not account for 'market rents' at all – for decades the old Housing Commission accounted for 'economic rents', reflecting the historic cost of its properties, and income-related rebated rents.)

What actually does cost money at Millers Point is repairs and maintenance. We'll take the Minister at her word when she says that in the past two years $6.8 million has been spent on repairs and maintenance there. This is a lot less than the $8.89 million per annum in 'subsidies' that was not actually spent.

It is important to note too how much tenants have paid towards that real cost of housing. There are 409 social housing tenancies in the properties at Millers Point and The Rocks. We understand the average income-related rent paid is about $100 per week, so, over the past two years, tenants have paid about $4.25 million in rent – in other words, not quite two-thirds of the repair bill.

*

It is bad enough that the Government's media release creates a misleading impression about subsidies in the social housing system generally and at Millers Point and The Rocks in particular. What's worse is that it takes a couple of other cracks at Millers Point and The Rocks tenants as a group and, in a couple of cases, individually.

Crack one, against Millers Point tenants:

Half of all public housing tenants in Millers Point are of working age (18-59), but 94% of tenants claim Centrelink benefits as their primary source of income.

You can see the impression it's trying to make. Let's turn it around. Half of all public housing tenants are over 60 years of age. They are ageing in homes to which they are much attached in a supportive community and should be allowed to stay there. As for the younger half: of course most of them receive Centrelink payments, that's why Housing NSW picked them to be public housing tenants! (Most tenants in Millers Point were housed there through the usual way: applying (and waiting) for social housing. A significant minority, however, have been there since before it public housing, when the Maritime Services Board owned the houses and let them to people who worked on the harbour.)

Cracks two and three are leveled against two individual tenants. The media release does not give their names, but it does disclose the gender, age, street of residence, period of residence, family circumstances of each person, and the amount of the 'subsidy' each has 'received'. We'll not repeat those details here; their privacy has been infringed enough as it is. Disclosures of personal information about clients of government services have no place in Ministerial media releases.

Tenants' Union condemns public housing sell-off of Millers Point and The Rocks

Text of TU media release follows:

The State’s peak organisation for tenants, the Tenants’ Union of NSW, has condemned the proposed sell-off of 293 public housing properties at Millers Point and The Rocks, announced today by the O’Farrell Government.

‘This sell-off amounts to the destruction of a community. It will cause hardship and grief to the people of Millers Point, and make all of us the poorer’, said Dr Chris Martin, Senior Policy Officer for the Tenants’ Union of NSW.

‘We are concerned for the wellbeing of Millers Point tenants, especially those who are elderly and those have lived all their lives at Millers Point’, said Dr Martin. 

‘Millers Point is irreplaceable, both as inner-city social housing and as part of our State heritage’, said Dr Martin. ‘The heritage value of Millers Point is not just in its buildings, but in its historic use as public housing, and in the long family and community ties of many of the people living there. The significance of Millers Point’s public housing and its community is recognised in its State Heritage listing.’

The Tenants’ Union criticised the lack of transparency around the sell-off. ‘The Government has not released the results of the Social Impact Assessment conducted as part of its review of housing in the area’, said Dr Martin. ‘Use of proceeds from previous sales in the area has not been accounted for transparently. On its record to date, no-one can be assured that all proceeds of a sell-off will be ‘reinvested’ in social housing.’ 

The Tenants’ Union called on the O’Farrell Government to look at alternative solutions to the question of maintenance of properties at Millers Point. ‘The tenants themselves have been putting forward innovative proposals for a sustainable program of works,’ said Dr Martin. ‘The Government should talk with tenants and the not-for-profit housing sector about these solutions.’

In the meantime the Tenants’ Union encouraged people to visit Millers Point and talk to the locals. ‘You’ll find people who have worked on the harbour, and whose families have worked on the harbour, and who can tell you about a significant part of the history of Sydney. And you’ll enjoy a wonderful part of the city, that we all own’, said Dr Martin. 

[Update: the Millers Point Social Impact Assessment, and the Government's response, are now online.] 

NSW tenants – you're billionaires!

Congratulations, tenants of New South Wales – you're billionaires!

According to the annual report of the NSW Rental Bond Board, at some point last year the total value of tenants' bonds lodged with the rental bond board ticked over $1 billion for the first time. At 30 June 2013, the total stood at $1 043 000 000.

All of it tenants' money.

That billion dollars earned interest: a handy $58 million for the year. Most of that interest was divvied up and paid out for various purposes.

All up about $38 million – almost two thirds of the interest earned – went to the NSW State Government. The largest part – a bit over $24 million – went to the NSW Department of Finance and Services for 'administrative services' rendered to the Bond Board.

Another $13.5 million went to the Consumer, Trader and Tenancy Tribunal, as a contribution to the cost of its operations (a similar contribution will be made to NCAT). It's true that tenancy is a big part of the Tribunal's business: across its three tenancy-related divisions (Tenancy, Social Housing and Residential Parks) it received more than 51 000 applications. Of these, 83 per cent were made by landlords.  

And another $500 000 went to NSW Fair Trading, as a contribution to the cost of its telephone information service, which gives tenancy information to tenants and landlords alike.

Out of the remaining third, $7.5 million went to the Tenants Advice and Advocacy Program: in other words, your TAASs, which provide information, advice and advocacy to tenants – never landlords. Tenants advocates like the work, so thank you tenants; we also reckon tenants get a very valuable service for their money.

A little over $3 million went to not-for-profit financial counselling services, a little over $2 million went to the No-Interest Loans Scheme, and a little over $400 000 went to The Aged Care Rights Service. These are valuable services too, and we encourage you to use them if you need them.

And $2.5 million went in grants to affordable housing schemes – in particular, as the NSW State Government's contribution to NRAS projects. 

Last – and least – $132 000 went to individual tenants, in interest payments on bonds paid out at the end of tenancies.

That leaves a bit over $3 million of interest not paid out over the year. This was added to the pile of surplus monies from previous years where, in total, a little more than $62 million has now accumulated.

So, tenants have some valuable services to show for their billion dollars – but we think they should have more. Between the surplus and the payments to government – particularly the payment to the Tribunal, which really should be funded by the whole of the community, not in such a large part by tenants – more monies should be directed to the TAASs, which are still funded as if they are serving the rental market circa 2002, and more should go to tenants individually.

NRAS: the baby in the bathwater

The National Rental Affordability Scheme (NRAS) is in the news, with The Australian reporting that about 4 000 units constructed under the scheme are being let to university students.

Some perspective: in its five years of operation, NRAS has subsidised the construction of about 14 500 dwellings, with another 24 000 dwellings in progress. In return for the NRAS subsidy, these dwellings are let at a discount to market rents (80 per cent) for 10 years. They must also be let to persons or households whose income is below certain thresholds; these are set higher than the thresholds for social housing, but we know of one community housing provider who reports that 15 per cent of its NRAS tenants had previously been homeless.

So, NRAS has delivered new construction and reduced rents – which is a lot more than can be said of the tax subsidy for negative gearing, or for capital gains tax.

There's actually an affordable housing baby in the NRAS bathwater! Would the Government throw it out, while its other tax settings do nothing but encourage speculation and make housing unaffordable?

Chinese investment in Australian rental housing

There's been a lot of talk lately about Chinese buyers buying up Australian housing – and pushing up house prices.

Most of the talk is based on mere anecdote; Credit Suisse has tried to put some numbers on it, and estimate that Chinese buyers spent about $5.5 billion on Australian residential property last year. Credit Suisse's researchers – like the other commentators – conclude:

A generation of Australians are being priced out of the property market. Many face a lifetime of renting.

Let's put Chinese buyers into perspective. Last year Australian banks lent landlords just under $100 billion to spend on Australian housing. A very small part of that – necessarily less than $5.5 billion, probably much less – may have gone to Chinese buyers, but very largely that $100 billion went to Australians becoming landlords.

Another thing: most purchases by Chinese buyers (about $3 billion of the $5.5 billion) worth are subject to Foreign Investment Review Board rules, which restrict purchases to new construction or properties for redevelopment – in other words, new housing supply. Now, there is a question mark over how well the FIRB enforces those rules. There is, however, no such question in relation to Australian landlords, because there are no restrictions. About 93 per cent of that $100 billion borrowed last year went to purchase existing dwellings.

By and large, it is Australians who are pricing other Australians out of home ownership. 

NSW Social, Public and Affordable Housing, in summary...

The Tenants' Union has finalised its submission to the Social, Public and Affordable Housing Inquiry. Under the rules of the Inquiry, we're not entitled to republish it - it is up to the hosts of the Inquiry to do that. We expect it will be published, and a link will appear on the Select Committee for Social, Public and Affordable Housing's website shortly.

(UPDATE 5/3/14 - find it here!)

In the meantime, we can give a brief rundown of what we've been thinking.

1. Houses are too expensive
Preferential tax treatment of housing encourages anyone with a bit of cash to spare to leverage it up and park it in housing. This has seen prices soar on the back of debt-fueled buying and selling throughout the past two decades. It is owner-occupied housing that gets the strongest preferential treatment, but rates of ownership are declining all the same. People buying property to rent get the next best treatment. But as landlords are buying and selling in the same market as owner-occupiers, their house prices are similarly distorted.

2. Expensive housing affects rental markets - stock
We can differentiate between the cost of housing (prices) and the cost of shelter (rents), and we can see that speculation has sent one of these to the moon without taking the other along for the ride directly. But rental stock has become more expensive because of speculation on house prices. Tax breaks for landlords (ie negative gearing) don't encourage reduced rents - they encourage more debt. And they don't encourage new supply, they only encourage demand for housing with good prospects for capital gains. Which means that when low-prospect, low-value, low-rent stock comes on the market, speculators tend to steer clear of it. It drops out of the rental market, becomes harder to find, and more expensive to rent.

3. Expensive housing affects rental markets - tenants
Higher prices means more would-be owner-occupiers are staying in the rental market for longer. The number of higher-income renter households continues to increase, and these households compete with low income households for fewer and fewer affordable properties. Usually, they win, and then do what they can to hang onto their affordable home. There are not enough affordable properties available for low income households to rent - which puts pressure on existing stocks of Social, Public and Affordable Housing.

4. Combined effect of house prices and rental market conditions
When you combine high prices with reduced supply and increased demand, you end up with a Social, Public and Affordable Housing system that is expensive to run and difficult to expand. In fact, the NSW system of Social, Public and Affordable Housing has been in relative decline for decades - not just in numbers, but in quality as well.

5. Administering the problem won't fix it
In response to these conditions, Social, Public and Affordable Housing administrations attempt to do a great deal more with much, much less. Policies have been implemented to target assistance to those with the "greatest need", which effectively reduces the availability of assistance to the growing numbers who require it. And in relying on a declining system to address the greatest need for housing, our Social, Public and Affordable Housing landlords become bogged down in the administrative drudgery of micro-managing tenants, looking for any excuse to free up the scarce resource of housing. In return, tenants do whatever they can to ensure their own need remains greatest, so they can stay housed.

***

Okay - that all sounds like a lot of doom and gloom, and we're sorry about that. We've made a number of recommendations about how the NSW Government can make a start on making things better... But if you want to get into all of that, you'll have to read our submission. We'll post a link to it once it's in the public domain.

(UPDATE 5/3/14 - find it here!)