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Social housing devalues private units nearby, developer says

Social housing tenants will drag down the price of private apartments if they’re placed in mixed buildings, a major developer says.

Citta Property Group director Stephen McMillan​ told a parliamentary inquiry that placing social housing tenants in the same building with private apartments created a "much tougher job" for agents trying to sell units.

SHARE Share on Facebook SHARE Share on Twitter TWEET Link A public-private housing development in Carlton that the government is using as a model. Photo: Eddie Jim

"If each of the social housing apartments are sprinkled through a private dwelling there is no doubt that building would have to be discounted in the market," he said.

Mr McMillan, whose company is a prospective bidder on the government’s social housing development program, said he would need to have a "hard think" if the government insisted on so-called "salt and pepper" developments combining public and private units.

He told the inquiry it was just an "unfortunate reality" that social housing – which includes public and community housing – diminished the value of private apartments in the same building.

"It’s a very difficult process to try and convince someone to buy an apartment in a building which has got social housing sprinkled through it," he said. "That might not suit people’s view of the way things should be but that is just the reality."

The Victorian government has embarked on a series of public housing upgrades on ageing estates in some of Melbourne’s most attractive locations. It intends to offset the development cost by selling public land to private developers.

The parliamentary inquiry has been considering the best models for public housing, including examining the salt and pepper mix for public and social dwellings.

There are instances where private and social housing tenants live alongside each other in the same building in Melbourne.

The Victorian Public Tenants Association shot back at Mr McMillan’s comment, saying public housing residents were sick of "postcode discrimination" and negative stereotypes.

The association’s spokesman Raoul Wainwright said the ease or difficulty of selling real estate should not determine public policy.

"Public housing tenants are sick of being told that no one wants to live near them," he said.

Mr Wainwright called for a "real mix" where public renters lived alongside private tenants and owners.

"The sooner that we all understand that public housing tenants are the same as everybody else, the better off we will all be."

The government’s public housing redevelopment program is now under a cloud after the opposition and the Greens united to knock back a project at another site in Ashburton.

Speaking at the parliamentary inquiry last week, Mr McMillan cited an example of a redeveloped public housing estate in Sydney where the government opted for social and private housing on the same site but they were placed in separate buildings.

He said this was done for ease of management but also to gain higher prices for the private dwellings.

The Citta Property Group has redeveloped large public housing estates in Carlton and has persuaded government planning advisors to recommend its plans to build a 22-level tower in Parkville.

The company also won the tender to redevelop the controversial St Kilda Triangle project before it was scrapped.

Housing Minister Martin Foley said there had been strong interest from the private sector wanting to partner with the state government to modernise and increase public housing.

"These projects are encouraging a greater social mix in our communities to ensure that we don’t end up with pockets of isolation," he said. "We have a real opportunity to make a difference in the lives of tenants by providing homes that are comfortable, modern and energy efficient."

Martin Foley, Victorian Minister for Housing, Disability, Ageing, Mental Health, Equality and Creative Industries says he flew premium economy instead of business class to keep costs down.

The parliamentary inquiry will examine a wide range of issues, including the adequacy of the proposed 10 per cent increase in public housing units.

The inquiry’s terms of reference say the government plans to sell the majority of the public land in its renewal program for private development.

But last month the government’s strategy for renewing public housing estates hit a major hurdle when the opposition and the Greens united in the Victorian Parliament to reject plans to rebuild the Markham estate in Ashburton.

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