Public housing taskforce forced to buy out townhouse complex after ‘salt and pepper’ bungle

Public housing taskforce forced to buy out townhouse complex after 'salt and pepper' bungle

The ACT’s public housing taskforce was forced to buy out an entire complex of townhouses after a heavy-handed application of the government’s “salt-and-pepper” policy.

Other public housing tenants are being pushed to the fringes of the city, despite a cabinet submission recommending new stock be built within a kilometre of the light rail corridor.

Those are two of the findings in a searing report by ACT Auditor-General Dr Maxine Cooper, which pointed to problems with the way the territory’s ambitious public housing renewal program was being rolled out.

The government must replace almost 1300 ageing public housing blocks by mid-2019 to cash in on asset recycling bonuses from the federal government.

While Dr Cooper commended the public housing taskforce on its interactions with tenants, she said its land evaluations were “overly optimistic”.

Dr Cooper found the taskforce had a practice of adding 30 per cent to the property valuations to estimate sales revenue in business cases, based on advice from the Land Development Agency.

However she pointed out the total revenue from the sale of public housing had been less than predicted to date.

The exception was the March 2017 sale of the “Lyneham on Northbourne” development, although the estimates were based on a revised model in which 20 per cent was instead added to property value estimates.

“It would be prudent to rely on professional valuation advice and undertake a sensitivity analysis so that a range of estimates can be provided to decision‐makers, rather than adding a percentage to valuations. Providing a range of values would likely reinforce the challenging nature of making estimates,” Dr Cooper noted.

Dr Cooper also questioned the decision to buy rather than build properties on territory-owned land, saying it came at a higher cost per dwelling.

In one example, the taskforce bought 11 townhouses in a complex of 17 and were forced to buy out the remaining six private owners after repeated complaints.