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Minister believes Aussie social housing model would work in NZ

By Australia Correspondent Steve Marshall in Minto, south of Sydney

Published: 6:38AM Thursday July 25, 2013 Source: ONE News

Carrying her three and a half month old baby Sofia, Natalie Lorenti checks the letterbox outside her new home.

The white brick house is has been built in a new subdivision in Minto, 50 minutes drive south of Sydney, which Mrs Lorenti and her husband bought for around $400,000NZD.

The neighbour's house also looks new but Mrs Lorenti knows that her neighbour, a single mother of two, does not own her home.

Mrs Lorenti also knows that her neighbour doesn't pay that much rent either.

In fact, Mrs Lorenti's neighbour receives a rental subsidy from the New South Wales government to live in the house next door.

Welcome to the Australian social housing model where new housing developments incorporate a mix of public houses for people receiving benefits and those on low incomes, and privately owned homes.

The Australian term is the salt and pepper model where public houses are sprinkled among private homes.

Historically, public housing in Australia was originally set up for working class families and returning soldiers but today the term is perhaps associated more with images of people with complex needs such as mental health and substance abuse issues.

However Mrs Lorenti isn't bothered by the perceived stigma attached to public housing.

 "You wouldn't even know she's (her neighbour) in public housing at all, she's a great person to have around and very friendly" Mrs Lorenti told me.

According to other locals I spoke to, a few years ago Minto was a 'hell hole'. The suburb consisted entirely of public housing which attracted common social issues and stigma. Crime escalated to such heights that shop owners deserted the local mall, forcing it to close.

In 2006 the NSW government embarked on a radical plan to redevelop 1000 properties in the Minto public housing area.

However instead of new public houses simply replacing old public houses, Minto received a massive makeover.

Residents were relocated as their rundown brick dwellings were torn down and replaced with new homes so the area looked like neighbouring suburbs.

But the new homes weren't just built for people who needed housing assistance, they were also built to attract potential home buyers.

New roads and services were established as developers set about building homes on state owned land at extremely competitive prices knowing that there may be many more developments ahead.

The homes look similar in design however the official split is 70% private to 30% public. The subdivision now has 850 private homes and 360 public housing homes nestled around parks, schools and community centres and the building continues.

The median price for a house and land package is around $460,000NZD for private buyers while the state government receives nominal rent from people occupying public houses.

For example, a person who is receiving a government benefit has a small amount of rent deducted from their benefit before they receive it, while people earning low incomes who are in need of housing assistance, pay a rental amount that is relative to their wage.

The rental income goes into the state government's coffers for maintenance upkeep and to fund similar projects.

Peering over a model of the development site in the Minto sales office, NZ Housing Minister Dr Nick Smith likes what he sees.

Dr Smith is visiting the Minto redevelopment to get a close up look at Australia's social housing model.

He believes a similar model would work well for New Zealand as he pushes his 'game changing' Social Housing Reform Bill.

Mr Smith says social housing currently makes up 20% of housing stock in Australia compared with less than 1% in New Zealand.

He wants to dramatically increase that figure using the Australian 70% private 30% public housing model.

"We can learn some real lessons in how they manage those community relations because inevitably its bumpy people are resistant to change but its change that is necessary if we are going to deal with New Zealand and in particular Auckland's housing challenges" Dr Smith told me.

The Minto project cost more than a billion dollars for a little over a thousand private and public homes however, so far the rewards of community engagement and social integration appear to be paying off.