The use of a "restrictive covenant" — which excludes use of the land for public housing at a new Tasmanian real estate development — has been condemned by housing advocates and the state's anti-discrimination commissioner, with the state government saying they will look into the use of such contract clauses.
Key points:
- A covenant in the contract of sale for a housing estate north of Hobart stated the land "cannot be used for public or social housing"
- Another covenant excluding anyone receiving welfare benefits or rent assistance from living there has been removed from the contract, the developer says
- Another housing development on Hobart's eastern shore promises "maximising property values" by enforcing "no public housing" at the project
The covenant in the contract of sale for "The Fairway" project at New Norfolk, north of Hobart, states the property "cannot be used for public or social housing".
After questions from the ABC, Canberra-based developer MBH Group (Tas) — the developer of The Fairway — said "after review and consultation" it had removed covenant 18, which had stipulated owners were "not to use or allow the property to be occupied on any basis which involves any state or federal government rental assistance, benefit, or relief".
"The covenants were introduced by commercial consultation and is standard across the industry. Covenant 18 is no longer applicable and does not form part of the development documentation," MBH Group (Tas) said.
While restrictive covenants in building contracts can dictate what materials can and cannot be used in certain circumstances, the expansion of their use to exclude public housing tenants or people receiving benefits — in the midst of Tasmania's worsening housing affordability crisis, has drawn condemnation from housing advocates.
Tasmanian chair of Housing All Australians Simon Want said discriminating against all welfare recipients, as prescribed in the since-deleted covenant, was "perverse".
"One reading of this covenant is that you won't be able to have that mother or father or relative come to stay with you and live with you in your house — which I think is a perverse and ridiculous thing," Mr Want said.
Michele Adair, chief executive of the Wollongong-based Housing Trust and chair of Homes Tasmania, said she had never heard of restrictive covenants like these before.
"It feels really inappropriate and sits very uncomfortably with me," she said.
Exclusion of welfare recipients not new
While the use of the restrictive covenant at The Fairway has attracted criticism, the use of such clauses in contracts is not new.
Six years ago, community housing provider Housing Choices built three new dwellings in Hobart's east — only to receive a letter from the original landowners highlighting the restrictive covenants on the properties.
General manager of Housing Choices Tasmania Kim Bomford said the restrictions prevented any form of public housing and excluded any tenants who were receiving government benefits.
"I was thinking to myself, how can this be legal? How is this not a discriminatory practice?" she said.
But rather than challenge the legality of the covenants, Housing Choices decided to sell the properties and build elsewhere.
"It just really highlighted the fact that as a society we've got a long way to go in terms of understanding the different circumstances that lead people to homelessness or being at risk of homelessness," she said.
'Bad apples' not wanted
The Glebe Hill estate on Hobart's eastern shore has also had restrictive covenants in place since 2015.
While the development is complete, its website still spruiks the investment advantages of excluding welfare recipients.
"Not just a better design, but with covenants that require a better level of quality in homes and maximising property values, including no public housing," it reads.
The Glebe Hill project was developed by Lynmore Holdings.
Company director Rob Lynch said Lynmore's covenants did not exclude people receiving rent assistance or other government payments, and their developments were often part of the state government's MyHome shared equity program to help get people into their own homes sooner.
"The reason [for the covenants] is all the purchasers don't particularly want to be next to one of the bad apples," he said.
"There's not many of them in public housing, but it's just purely customer demand."
Ms Adair thinks the developers' approach is short-sighted.
"We know that diverse communities, older single women, are the people facing homelessness at a rate faster than anyone else," she said.
"I think it really speaks to a lack of understanding about how difficult the market is.
"Perhaps some fear of the unknown and really some uncertainty about the quality of social and affordable rental homes these days — which you would drive past and never notice being any different from the beautiful communities and streets that we enjoy everywhere else."
Mr Want said such clauses in covenants in contracts made it "hard for all of us, collectively as Tasmanians and Australians, to find a safe, secure place to live".
Housing Industry Association resists calls for boycott
Mike Herman from the Housing Industry Association (HIA) said restrictive covenants were important for many subdivisions to preserve amenities and prevent inappropriate construction.
But, he said, The Fairway covenants appear to have "gone too far".
"I would say it is unethical to do that because you're discriminating against a specific cohort," he said.
The HIA wants the Tasmanian government to step in before putting the onus on construction companies.
Dean Crocker, CEO of developers The JAC Group, agreed.
"The state government should issue guidelines for using restrictive covenants and should use industry to help draft the guidelines," he said.
Mr Crocker said JAC had never used restrictive covenants to prevent public or affordable housing on its subdivisions.
Robert Lynch said Lynmore Holdings would support any moves by the Tasmanian government to get rid of covenants that excluded tenants who were receiving rent assistance or government benefits.
Tasmanian government launches investigation
The Tasmanian government has repeatedly pledged 10,000 new affordable homes by 2032 to address the accommodation crisis in the state.
Housing Minister Guy Barnett said he was concerned by such restrictive covenants on land use.