Dec 10, 2014

Millers Point sell-off bad for the economy

Mike Baird’s plan to sell nearly 300 social housing units at Millers Point in inner Sydney could backfire and damage the city’s economy, according to a report into its economic implications.

The report, prepared by SGS Economics and Planning, warns that Mr Baird’s sell-off will reduce the city’s economic productivity by reducing access to low-cost housing near the central business district.

It points to clear economic benefits of maintaining a good social mix in the inner city.

For example, it makes good sense in efficiency terms to ensure that low-paid workers like cleaners and child-care workers, who are needed in the CBD, can find affordable housing near to where they work.

The SGS report, prepared for residents earlier this year, rejects the Baird approach but offers a compromise plan under which public housing units that cost too much to maintain would be sold, with the proceeds re-invested into new public and low-cost housing in the area.

It argues that while selling Millers Point properties to the highest bidder might maximize immediate cash returns, these benefits could be outweighed by lost productivity caused by concentrating disadvantage in particular areas and reducing availability of affordable homes near the CBD.

Successful cities are not disconnected enclaves of advantage and disadvantage.

They are diverse and their diversity helps drive economic productivity.

The sale of purpose-built public housing such as the Sirius Building makes no economic sense.

Mr Baird and his government are treating resident of Millers Point with contempt and refusing to release any information about where residents are being moved to and how they intend to make up for this reduction in public housing.

Mr Baird has been unmoved by arguments about compassion, but he should at least consider economic arguments in favour of maintaining social diversity in the inner-city.

This report points to a sensible way forward that would be better for residents and better for the economy.

The SGS report is available at: http://www.sgsep.com.au/assets/Millers-Point-Final-Report.pdf