Housing Changes in St Kilda and Melbourne's Public Estates

Part 1: Sale of Social Housing Units in St Kilda

Background and Decision

HousingFirst, a community housing provider, plans to sell 25 social housing apartments at the Inkerman Oasis development on Greeves Street in St Kilda. The units were originally provided to the Port Phillip Council in the early 2000s as part of a development agreement on a former council depot site.

In 2005, the council transferred ownership of its community housing portfolio to the Port Phillip Housing Trust. HousingFirst was appointed as the independent trustee, a structure that grants it the authority to sell assets without requiring council approval.

Three units from the development have already been sold.

Financial Rationale and Resident Impact

HousingFirst states the sale is due to the apartments being "financially unsustainable," citing rising costs for strata fees, maintenance, and council rates that are not covered by rental income. Rents for these community housing units are capped at 30 percent of a tenant's income, which for residents is typically a pension, supplemented by Commonwealth rent assistance paid to HousingFirst.

Some residents, who report having lived in the units for over 20 years, have expressed distress about the potential relocation. They indicate they were given an ultimatum to accept one of two relocation offers or risk homelessness. The offered options include other properties within the City of Port Phillip or units in a new retirement village in Brighton East. Some residents have described the Brighton East units as small and distant from their established community in St Kilda.

Responses and Criticism

• HousingFirst: The organization stated that selling the units to another social housing provider would not resolve the financial challenges and that all proceeds from the sale would be reinvested into other housing within the City of Port Phillip. Residents have until August to accept alternative housing arrangements.
• Former Mayor: Former Port Phillip mayor Dick Gross criticized the sale, stating it breaches the original agreement's intention to provide housing for long-term local residents affected by gentrification.
• Current Councillors: Current Port Phillip councillors Justin Halliday and Beti Jay, who serve on HousingFirst's board, were reportedly restricted by federal law from disclosing information about the sale prior to its public announcement and could not veto the decision.
• Government: Residents have sought assistance from the Victorian government. The state government's agency, Homes Victoria, offered to support HousingFirst in assisting renters to find new homes but did not comment on the possibility of acquiring the properties.

Part 2: Redevelopment of Public Housing Towers

New Announcement

Separately, the Victorian government, through Homes Victoria, has identified seven additional public housing towers for demolition as part of a broader redevelopment plan.

The affected towers are located in Albert Park, Flemington, Kensington, North Melbourne, Prahran, and St Kilda. These seven towers are part of the state's 13 facilities specifically designed for older persons.

Relocation of current residents is scheduled to begin in July, with an expected completion by February 2028.

Government Rationale and Plan

The government announced plans approximately two-and-a-half years ago to redevelop all 44 high-rise public housing towers across Melbourne by 2051. Housing Minister Harriet Shing stated that replacing the towers is necessary due to their age, with the aim of providing more modern, energy-efficient, and suitable homes.

The government's stated goal is to increase overall resident capacity on the sites from 10,000 to 30,000. The redeveloped sites will feature a mix of housing tenures, including private market rentals and homes managed by not-for-profit community housing providers.

Resident and Advocacy Group Concerns

• The Housing for the Aged Action Group (HAAG) stated that some residents, including those in their 80s and 90s, were surprised by the announcement, having anticipated remaining in their homes indefinitely.
• HAAG executive officer Fiona York expressed concern that the announcement could signify the end of dedicated housing programs for older residents and emphasized the need for significant support during relocation.
• Some residents, such as 73-year-old Bill McKenzie from Albert Park, expressed concern about the expedited timeline and the importance of offering nearby relocation options to maintain access to medical support and family networks.
• The Victorian Public Tenants Association highlighted the need for support for elderly residents to navigate the imposed relocation process.

Controversy and Alternative Proposals

• Legal Challenge: Lawyers representing some high-rise residents have indicated they will pursue legal action in the High Court to challenge the redevelopment initiative.
• Parliamentary Inquiry: A recent parliamentary inquiry recommended pausing the tower demolition plan, criticizing the government for not releasing documents to support its strategy.
• Research Findings: Research from RMIT University suggested that alternative approaches, such as building new "infill" housing on-site before refurbishing existing towers, could be less disruptive for residents, offer environmental benefits, and be more cost-effective for taxpayers.
• Government Response: Minister Shing dismissed the RMIT proposal, citing potential costs of "billions of dollars" and the prospect of residents living on a construction site for years. The Minister also stated that courts have found the government's approach "reasonable and proportionate."

Ongoing Process

Demolition work is ongoing at two previously vacated towers in Carlton. Relocations continue from towers in South Yarra, Flemington, North Melbourne, and Richmond identified in earlier stages of the plan. The government has introduced the Hand in Hand Community Support Program to connect relocated residents with current tower residents during the transition.