The NSW government has suggested handing over the management of the 150,000 public housing properties to the community and private sector as a means of relieving a $330 million funding shortfall.
A discussion paper entitled Social Housing in NSW issued by Minister for Family and Community Services Gabriel Upton stated that “innovative investment models such as social housing bonds, outcome-based funding models (for assets and tenancies), public-private partnerships and joint ventures for delivery of new supply could provide opportunities to more efficiently deliver housing assistance”.
The paper is in response to warnings that NSW cannot meet the cost of maintaining its run-down public housing stock at a time when a decreasing amount of public housing tenants are paying market rents.
Ms Upton said the system had "failed to keep pace with increased demand and changing demographics" and "fails tenants" by contributing to social housing dependency.
It has been estimated that the shortfall in annual funding in 2012/2013 came to $330 million.
The government believes that while some people will need social housing for life - due to ill-health, age or circumstance - others should be encouraged to "transition out" of the system and into the private rental market.
With most of the social housing system presently state-owned and operated, the paper flagged the potential for partnerships with the private sector and non-profit groups, such as community housing providers.
The government also said the social housing system should be made fairer by prioritising those most in need, and addressing anti-social and illegal behaviour which can make other tenants feel unsafe.
The paper is open for comment until 20 February next year. The government will respond in July 2015.