An aged care home in Sydney has been informed that a $5-a-week rent agreement struck more than 20 years ago will be scrapped, forcing the facility to close and leaving elderly residents “stunned”.
Non-profit community groups are being forced to pay hundreds of dollars a week in rent, throwing their sustainability into doubt, as the NSW government abandons "peppercorn rent" agreements that have been in place for decades.
In the latest example, the Darling House aged care home at Millers Point has been informed that a $5-a-week rent agreement struck more than 20 years ago will be ended, according to The Sydney Morning Herald.
The Department of Family and Community Services rents about 1,200 properties to non-profit organisations, many on peppercorn rents.
It has confirmed it intends to fulfil a direction by Treasury that "market values … be realised" on the lease of the assets – a move critics have described as "cruel".
Darling House's management was informed in August that the government would charge full market rent after one more year on the lease deal.
Residents were told last week that the rent increase, combined with other factors, means the facility will close next March.
It comprises nine units catering to elderly residents requiring low-level care.
Board member John McInerney said the rent increase could be up to $200,000 a year, delivering "the final nail in the coffin" to the struggling facility.
He said the community was "under attack" following the government's public housing sell-off at Millers Point.
Eileen Enslow, who turns 90 later this month, told The Sydney Morning Herald the announcement left her and other residents "stunned".
"It's the last thing we could have expected. I don't know what they intend doing with the place," she said.