Why should the state wriggle out of providing public housing?

The Victorian government’s 2017 housing policy contains a bulk transfer of public housing to housing associations. Housing Minister Martin Foley’s explanation is that “the state is a terrible housing manager”.

A similar rationale underlies the handing of public housing estates to private developers to build private housing, the sales of which fund some new public dwellings with the added justification of increasing social mix.

Our soon-to-be-published research examines the rollout of this program. In inner Melbourne, following redevelopment of the Kensington, Carlton and Prahran estates, nine more estates have been targeted. The tenants of buildings to be demolished will be relocated from mid-2018, according to a government briefing paper.

The federal Greens MP for Melbourne, Adam Bandt, has criticised the program as selling public land to private developers “for a bagful of cash and a smattering of new social housing”. He adds that Melbourne needs “a large-scale build of new public housing on a 1960s scale”.

Foley’s defence of the rollout, in an odd non sequitur, is that Labor:

… can’t condemn another generation of Victorians to live in housing poverty.

A flawed idea that began with Thatcher

Public housing stock transfer and estate redevelopments in public-private mix are part of a trend that began in Thatcher’s Britain. The Blair government continued the approach, which has become neoliberal policy orthodoxy in the UK and Australia.

This allows governments to wriggle out of providing housing for people on low incomes by transferring responsibility to non-government and private sectors.

The thing is, housing associations are not necessarily secure or better managers, especially as they become institutions in their own right. Furthermore, privatisation of public land to fund upgrades to public housing not only fails to deliver good value for taxpayers, but is unsustainable. At some point there will be further upgrades needed and no land left to sell.

The argument that the state should not be in the business of managing or building housing is one we’re hearing more often. It’s connected to the small-government case more broadly: should the state be involved in health care, education, the media?

As the ABC and BBC demonstrate, however, state-owned enterprises can operate perfectly efficiently. And, ironically, they provide a rare source of ideological independence from both government and big business.