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Issue #1656      September 17, 2014

Millers Point scandal just the tip of the iceberg

The NSW coalition government is suspected of having “underquoted” the anticipated sale price of two publicly-owned Millers Point houses this month to benefit the small group of buyers specially selected by the government to attend the private auction.

The government intends to sell another 292 Millers Point houses, and to relocate more than 300 public housing tenants who occupy them.

The intention of deliberately underquoting is to reduce competition and deter interest, and this may be assisted by collusion between the buyers. The price guide for one Miller Point house was $1.3 million, but it sold at $1.9 million, and one real estate agent has claimed that the bidding should have reached at least $2.5 million.

Labor opposition housing spokesperson Sophie Cotsis called for a halt to the sales and an official inquiry into the auction, to which she was denied entry.

The government intends to sell another 292 Millers Point houses, and to relocate more than 300 public housing tenants who occupy them, but it hasn’t prepared a plan for the relocation. Ms Cotsis remarked: “The government says they will build more [social housing], but where?”

Ms Cotsis also described the government’s plan to “sell an entire suburb” without proper economic planning as incompetent. However, selling the houses within the 18 month time frame would undoubtedly drive prices down, suiting potential purchasers very nicely.

The houses, which enjoy fabulous harbour views and proximity to the city and nightlife, have long been coveted by the real estate market, but members of the Millers Point community have close personal relationships, and the area has deep significance for them.

Many of the families have lived there since the early 19th century. They helped build the Harbour Bridge, survived the Great Depression, fought in the First and Second World Wars, and were involved in the Builders’ Labourers’ 1970s green bans which saved the early buildings in the Rocks from demolition.

But the government refuses to acknowledge that public housing funding is inadequate, or that the forcible relocation of a community of 300 people over eighteen months is an act of social vandalism.

Instead, it is arguing that by selling the houses the residents currently occupy it could build many times more with the proceeds of sale. But the proceeds would be partly offset by the cost of re-housing the residents, and the remainder would simply be returned to consolidated revenue, rather than being dedicated to increasing the public housing stock.

A Harbour virus

The Millers Point battle is just one of many struggles being waged over the Sydney Harbour foreshores.

Post-WW2 industrial relocation provided great opportunities for sympathetic redevelopment, including the foreshores of the former Callan Park Asylum and adjacent sites, which were adapted to form the Bay Walk, now treasured by local residents and visitors.

However, the development industry is now overriding the public interest. The most spectacular example is the gross overdevelopment of Barangaroo, the former stevedoring area immediately west of the city on Darling Harbour.

The government also proposes to redevelop the old White Bay power station and adjacent industrial areas, probably with as great a site density as at Barangaroo, but on a site four times larger, and to build new hotel and entertainment facilities within the Royal Botanic Gardens and Sydney Domain.

And now it wants to form a new agency to create a “strategic vision” for the foreshores extending from the Bays Precinct and Darling Harbour west of the Bridge to Millers Point, the Rocks, Circular Quay and the Royal Botanic Gardens.

The Sydney Harbour Foreshores Authority currently oversees development of that area, and owns more than $1 billion in publicly-owned real estate there. The cabinet is considering abolishing the Authority, and has asked a committee of the heads of government departments to report on the Authority’s future.

The government has already placed its property development agency Urban Growth in charge of the Bays Precinct. Shadow Opposition spokesperson on planning, Luke Foley observed: “… government policy concerning the Sydney Harbour foreshore seems to be directed at development and commercialisation rather than developing the public realm”.

He’s right. Developers lobby group Urban Taskforce is campaigning for sale of government foreshore land in the Bays Precinct and elsewhere. It wants the private sector to take over Harbour events now managed by the Foreshore Authority, and to act as landlord and strategic planner for public foreshore lands.

Urban Taskforce CEO Chris Johnson commented: “… we are most concerned that some organisations have suggested that all [foreshore] lands must remain in public use”. He urged the government to “ensure development opportunities are fully explored, including the Bays Precinct”, adding: “The government should also consider selling [its] buildings within the Rocks …”

He remarked: “It would appear that [the review] is only related to the urban parts of the foreshore and this needs clarification”. Developers are very interested in largely undeveloped former Defence lands at Chowder Bay, Georges Heights, Middle Head, North Head, Neutral Bay, Cockatoo and Snapper Islands, Watsons Bay and the Woolwich dock.

Those areas are currently managed by the NSW government’s Sydney Harbour Federation Trust. But the government now requires the Trust to operate like a commercial entity, funding maintenance or remediation of these sites itself.

The Trust’s dwindling financial resources have effectively overridden its responsibility to “provide a lasting legacy for the people of Australia by helping to create the finest foreshore park in the world and provide places that will greatly enrich the cultural life of the city and the nation.”

The minutes of a recent Trust board meeting noted: “The Trust will be focusing on its core business – leasing – in the coming months”. The NSW Trade and Investment office in Shanghai recently advertised North Head and Middle Head sites for long term lease and “unique development opportunities”.

It declared that the sites’ unspoiled settings and wonderful harbour views offered great potential for development, including construction of a boutique hotel.

After a public uproar the Trust withdrew the advertisement, but the incident vividly illustrates the government’s intention to privatise its foreshores operations and sell off or lease public land.

The big developers’ greed in exploiting the remaining undeveloped or redundant industrial sites could well bring about the destruction of the Harbour’s exquisite beauty and unique character.

Next article – Exploitation ratchets up

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