The government's buy-up of property for public housing is impacting on renters, with tenants in one 18-unit Henty Street block forced to leave in recent weeks to make way for public housing tenants.
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The government bought the block from developer Kieran Pierlot, who had rented out the apartments. It is directly across the road from the Northbourne Flats, from where public housing tenants are being moved to make way for high-rise development.
Paul Bowman was given notice in May, after more than two years in his apartment in Henty Street, and has moved to Gungahlin. He has no complaints about his treatment ot public housing, but says the government's buy up of private housing was putting the squeeze on the rental market and disrupting lives.
"It was a bit of a shock when we got the notice to vacate," he said. "... It's a stressful thing, moving out."
If the government had managed the public housing renewal program better, it could have avoided adding to housing pressure by pushing more private tenants into the market, and made decisions without the urgency it now faced to buy houses, he said.
Separately, a block of 17 townhouses in Flora Place, Palmerston, was sold to the government for public housing last year, also removing units from the rental market.
The government bought 11 of the townhouses from Victory Homes in December 2015, but was forced to buy the remaining six after complaints from the private owners.
Auditor-General Maxine Cooper highlighted the transaction in her audit last week, pointing out that the 11 townhouses had been bought despite Housing ACT recommending against buying into body corporates.
In December 2014, Housing ACT said "such arrangements do not provide good outcomes for public housing tenants" because they could be stigmatised by others, and also "considerably increases the cost" because body corporate charges "increase substantially each year and the cost increases are outside the control of [Housing ACT]".
After the Flora Place purchase in December 2015, the public housing taskforce said it had "received a number of phone calls and emails from some of the other owners critical of the process and asking the taskforce to consider the purchase of their properties" in Flora Place. The minister had also received complaints.
The taskforce said then that it "recognises that this procurement could have been more effectively co‐ordinated", and "if more than half of the units in a given body corporate arrangement are to be purchased, all owners will be notified through the body corporate".
Now, the taskforce has decided that if it buys properties in body corporates, it will keep numbers to "a small proportion, generally not more than 10 per cent of properties within any given complex".
The government won't say what it paid Victory for the 11 Flora Place units. It paid the private owners between $350,000 and $400,000 last year. Nor would it say what it paid for the Henty Street block, or whether it has bought other blocks in Henty Street.
The renewal taskforce said the purchase of smaller groups of townhouses and apartments was consistent with the salt and pepper approach, and maintained the geographic spread across the ACT.
As to Mr Bowman's comments, it said providing new public housing in existing suburbs "often necessarily result in the removal of the existing dwellings from the private market".
With pressure to get the 1288 public housing tenants out and land sold by mid 2019, the government started buying from builders and developers in 2015.
Dr Cooper highlighted early flaws. The government contracted Colliers to run the first call for expressions of interest in mid 2015, and had Colliers also on the initial assessment team. The government said this week Colliers' job was to promote participation, identifying interested parties and helping them prepare submissions.
The government commissioned an audit of the process in early 2016, which found, as a "high risk" that "the EOI process would be improved if the potential or perceived conflicts with the multiple roles that Colliers was engaged to undertake could be resolved."
In its response, the government said no actual conflict of interest was evidenced, but an independent marketing consultant has been appointed for the second call for expressions of interest. A risk management plan was developed and a probity adviser appointed.
"Experience from the first EOI and advice from auditors suggest that a single firm's ability to reach the whole market may be limited. The taskforce will therefore engage a consultant who is independent of real estate firms through the select tender process," a 2016 minute said.
By April 2017, 412 dwellings had been identified to buy.
Despite the problems, Dr Cooper concluded that governance arrangements were sound and the program was being effectively managed.