Choice Based Letting

4 September 2014 | Posted In: #122 Spring 2014, Housing Types and Issues, Public Housing, Public Housing – Millers Point, | Author: Joel Pringle

The Millers Point ‘Housing Lotto’ has received the attention of mainstream media in recent months, with Channel Ten News and Channel Nine’s A Current Affair running stories and interviews with residents. Joel Pringle investigates the origins of choice based letting and explores some of the issues raised.


The forced relocation of Millers Point public housing residents, and ultimately the break-up of a strong and supportive community, has been a major distress to residents. The pitching of residents against each other in a ballot competition introduces further stress for some of them.

The ‘Housing Lotto’, as it has been referred to by tenants, is the first major trial of choice based letting in Australia, and perhaps the largest in Australia. Originally developed in the Netherlands in the early 1990s, choice based letting is relatively widespread in the UK, especially amongst non-government community housing providers.

Choice based letting has the potential to provide better service for social housing residents, if implemented appropriately. The policy is an attempt to provide potential social housing residents with more choice over the properties that they are to make home.

The new arrangement, for successful applicants at least, gives social housing residents an experience closer to the private rental market. However, instead of rationing by the use of price (at least theoretically), social housing is rationed by availability. Instead of being limited by their personal budgets, social housing residents are limited by the number and quality of homes provided by the government and the non-government housing sectors which are often starved of the funding required to meet the level of community need.

The UK model generally involves a three step process, administered with variations by different councils and housing associations:

  1. Available properties are advertised locally to eligible residents in newsletters and community notices.
  2. Bidding is then opened for interested tenants. Again, bidding is administered differently by different organisations administering the process.
  3. The housing association or tenancy manager then collates the bids and, crucially, the applicant with the highest housing priority is given the first right to refuse the property.

It is the UK model that is likely to be the influence for Housing NSW (HNSW). However it is difficult to tell how the policy was developed by HNSW, or what its goals are. Requests to senior HNSW staff to share the policy discussion and briefing documents have been refused on the basis that they are confidential.

Choice based letting is a major change in how social housing tenancies are allocated, and it is likely to play a growing role over time. This trial has been made without justification, without transparency and without input from the people likely to be affected.

What we do know about the HNSW approach is that it has changed choice based letting administration in two significant ways that undermine the potential positives of the program. A policy that had potential to benefit the experience of social housing residents is instead now being rolled out as part of the divisive process of forced relocations.

At the third step of the process outlined above, the UK approach maintains the principle of housing allocation by need. This is one of the foundations of equity in the social housing system, and there appears little evidence of choice based letting being used to undermine this principle elsewhere.

Choice based letting in Millers Point has introduced a new factor to the final allocation. Instead of offering the property to the applicant highest on the priority waiting list, a ballot has been introduced. Currently in public housing, properties are allocated on need, based on the assessment of HNSW staff.

In the private market, applicants self-allocate based on a price, and then real estate agents make a recommendation to the landlord based on their perception of who would be the most reliable tenant. In the Millers Point tenant relocations, the successful applicant is pulled out of a box.

However, questions have been asked by tenants about whether this is actually what occurs. These questions arise from the lack of transparency. Even though the ballot is public, the selected, sealed envelopes are taken to another location, without independent observers, before being opened. The lack of transparency from HNSW creates a lack of trust amongst affected residents.

HNSW staff have stated publicly that Millers Point residents do not have to participate in the ballot if they don’t wish. But this belies the second major corruption of choice based letting created by HNSW: the residents of Millers Point are not given the choice to remain in their homes until an alternative that they prefer becomes available. If they do not participate in choice based letting they are only entitled under the policy to get two relocation offers and may be evicted if they have not moved by the time the Government wants to sell.

Anecdotal reports suggest that HNSW Relocation Officers have told Millers Point residents that there is only a limited availability of suitable properties, and that those who move first will get the better houses. The implication being that those who move last will get the lesser quality properties.

Given the political challenges of closing down a housing community like Millers Point, one that caused the Government so much trouble during the Green Bans period, it is no surprise that there would be attempts to rush the relocations. Relocating a community this size in such a short timeframe is unprecedented.

It appears that the lure of ‘winning’ one of the best properties is being used to hasten the closure of a community and the sale of their homes. Given the impetus to move and the threat of missing out if they wait too long, it is no surprise that some fearful residents see a roll of the dice as their only option, not a choice.

In a recent Millers Point ballot 17 people entered for one Annandale property and 13 for another in Lilyfield. Of the 30 tenants who went through the process two were successful and 28 had to restart looking at the next round of properties.

The origins of choice based letting are in providing social housing residents with more dignity and at least some level of increased control in their housing. Under its current implementation by HNSW, residents are pushed into the system by fear of missing out on decent properties they see as being offered to entice them to move out quickly so their current homes can be sold.

Currently housing allocation to those tenants with the highest housing priority has been replaced by allocation priority to those the government wants to move so it can sell their current houses. If choice based letting is to be introduced in NSW as a form of allocations, it needs to be done using a transparent process based on housing priority otherwise the current trial is likely to be distorted by the political incentives of moving tenants out of Millers Point as quickly as possible.

Joel Pringle has been the Senior Community Development Officer at ISRCSD responsible for Millers Point.