History of public housing
Significant state-built ‘public’ housing, rented by working class people, only occurred because of immense pressure from the labour movement. In the early days of Australian capitalism, workers either privately rented or owned their homes. The early workers’ movement rallied against private landlords for their often poor attitude to maintenance, their high rents, as well as against laws that allowed landlords to withhold the property of tenants as a way to recover unpaid rent.
Under pressure from ordinary people, governments began schemes offering cheap loans to low income families to buy homes. After the First World War, these schemes were stepped up for returned servicemen to cut across the mass radicalisation in society at the time. Between 1919 and 1930, 37,000 homes were financed through the War Service Homes Scheme.
The Great Depression in the 1930s temporarily cut across these schemes as governments changed to cost-cutting liberal economic policies. After the Second World War, the large Communist Party, powerful unions and the ranks of the dominant ALP demanded real action on public housing as there had been no real increase in housing stock since before the depression and the housing shortage equalled 120,000 dwellings. Workers demanded better after winning a war.
Nearly 100,000 homes were built through the Commonwealth State Housing Agreement – where the Federal government loaned the money to the States who organised the building of the homes through private companies. Companies like AV Jennings became building giants by capturing State government contracts for the new public housing estates. From the start, however, public housing was on a user pays basis, unlike public education.
The capitalists and their politicians made the best of this forced spending on public housing. In South Australia the relatively large amount of public housing was seen as a way for bosses to argue for lower wages (as rents were low) and thereby glean a competitive advantage over competitors in other States.
The long post war boom allowed more workers to buy homes rather than access public housing – a continent of stolen land meant high levels of home ownership compared to Europe. The Communist Party declared in 1957: “ownership of property, for the purpose of extracting a profit out of others causes injustice, but not the ownership of property for one’s own use.”
So even during these ‘golden years’ for public housing the percentage was low by Western standards (see accompanying graph). On top of this, State governments encouraged public housing tenants to buy their homes eg 37% of NSW public housing stock was sold to tenants from 1945 to 1969.
In 1962 Victorian Premier, Playford explained the second rate status of public housing in Australia: “We do not want to make housing more attractive to the detriment of home purchase. Home purchase is what we all strive to foster. If you allow people with big incomes to rent houses at very attractive rents they will never buy.”
In the 1960s public housing authorities began constructing high rise towers, especially in Victoria. This was the last time there was a big increase in public housing stock – however the rise was modest from 1% of total stock in 1947 to a still low 8% by 1966 – it is 4.1% today.
The end of the post war economic boom saw a shift from Keynesian capitalist policies to neo-liberal/economic rationalist policies. This had a big impact on public housing. Reports were commissioned by rightwing governments to ‘prove’ that large numbers of public housing tenants were not poor at all but ‘up to 120% above the poverty line’!
A move began towards market rents, housing vouchers, means tested rebates and less new public housing stock. Sales of public housing were stepped up – 10,000 dwellings were sold in Victoria from 1971-81, equal to 84% of the new stock built in the same period. Not surprisingly public housing waiting lists skyrocketed from 125,000 in 1982/83 to over 200,000 today.
Higher income tenants faced big increases in rents and were forced out of public housing. New tenants were almost all low income. Worse still they became de facto housing jails for welfare recipients. With almost all tenants now on rent rebates (from 62% of public housing tenants in 1985 to 81% in 1992) and 90% on government benefits, there is an economic incentive not to increase one’s income. Sociologist David Haywood explained that: “Some tenants now face effective marginal tax rates exceeding 140% with incomes actually falling by 40 cents as a consequence of the loss of rebates and other social security benefits for each $1 of extra income they earned.” Public housing went from being working class housing to welfare housing.
Public Housing today
With rents pegged at 25% of household income, rental income has declined leaving big deficits for the State governments. The office of housing has to raise money from the ruthless collection of back rents and from privatisation to finance basic maintenance. Real capital funding fell by 25% from 1990-91 to 2000-01.
Housing departments employ the cheapest possible contractors to undertake maintenance and refurbishments. In Victoria the CFMEU has complained that these contractors often have no enterprise bargaining agreements with their workers – the union expects more from a ‘Labor’ government and ‘Socialist Left’ faction member, the housing minister Richard Wynne.
Community development service delivery has been contracted out to private companies like Infoxchange and the Jesuit Social Services, who badge themselves as socially progressive agents of change.
Yet the Jesuits have a $750,000 contract from the Victorian government to provide community development workers on estates but have had none on site at the massive Fitzroy estate for many months! Infoxchange tag themselves as providers of computers to the poor ‘for social justice’, yet charge over-market rates and provide second-rate service. So much so tenants marched down Brunswick St, Fitzroy late last year and occupied the Office of Housing in protest at their ‘service’ and activities.
When new development takes place today, private builders are brought in and given a contract and also access to public housing land for private units. On the big Carlton public housing estate in inner city Melbourne, Becton construction company won a $40 million contact plus have taken land for private use. Only a public rally last year stopped them building a road through the estate, over the only playground, to separate the public from the new private units! This road would have been like a latter day Berlin Wall between rich and poor.
This social programme by the Victorian Office of Housing has been an expensive response to the growing social crises on public housing estates. Copied from New Labour in the UK, it brings together government housing officers with (private or non-government) service providers with tenant ‘leaders’, often hand picked by bureaucrats.
Using the language of community capacity building, social capital etc it is an attempt to neutralise community opposition to the recent new direction of government. It is an agency of social control. Residents are constantly fighting the bureaucracy in trying to make it more democratic, representative and transparent.
Decisions, despite the rhetoric, are made top down and therefore often disasters – like the water recycling project in Fitzroy that was wrecked by the use of incorrect materials and now needs to be totally redone.
Democratically-elected resident associations are bled white of finances (the resident associations at the massive estates in Richmond and Fitzroy get less than $5,000 each a year and are therefore forced to run with volunteer labour from committed tenants) and face audits, private detective investigation, media slurs, and the financing of compliant opposition tickets in elections. Yet favoured agencies get massive government contracts and senior bureaucrats earn over $200,000 a year. How can one build ‘community capacity’ in this unequal environment?
The public housing tenant revolt in Melbourne
The Socialist Party has been closely involved in a revival of public housing tenant action, especially in Fitzroy and Richmond but also in North Fitzroy, Collingwood and elsewhere. 2006 saw numerous actions, public meetings and a growth of community involvement in resident associations. See www.socialistpartyaustralia.org/council for frontline reports of these developments.
What SP says about public housing
We want to support democratic, accountable and inclusive resident associations – they know better than middle class do-gooders in NGO’s what the issues are and where resources should go. We support bringing back what the Kennett government took away – the paying of elected tenant leaders so they can do their job and full support by way of administration and auditing help.
We see access to housing as a basic right – there should be a massive increase in low rise, high quality public housing for all. This will create thousands of jobs and help crack the housing crisis as seen today in high private rents and 200,000 people on the public housing waiting list. Such a programme can be paid for by cutting tax perks for investors and, ultimately, guaranteed by a democratically-planned socialist economy. The fact that modern capitalism, in a boom, cannot guarantee decent accommodation for so many Australians is an inditement and an argument for socialism.
By Stephen Jolly
Public Housing as percentage of total housing stock
Czech Republic: 61.6%
Hong Kong: 36.4%
South Africa: 21.6%