The public housing system has failed and many tenants should be fending for themselves, according to a NSW government blueprint that flags greater private involvement in the troubled sector.
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A social housing discussion paper to be released on Tuesday by Community Services Minister Gabrielle Upton says despite more than half of tenants relying on the system for a decade or more, public housing need not be a "life-long destination".
However, the government has failed to detail exactly how it will close the gaping hole in the public housing budget, or how the proceeds of the controversial Millers Point public housing sell-off will be spent. It has also not provided any targets for curbing the public housing waiting list, which is expected to blow out to 86,000 by 2016, and will not release its final, overdue public housing policy until after the election next March.
The government is desperate to reduce demand on the flailing public housing system, which runs at a loss of about $300 million a year. It has been selling properties to try and balance the ledger – an approach described by the NSW Auditor General as "not financially sustainable".
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.
Social housing comprises public, Aboriginal and community housing.
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.
This might involve connecting tenants to "employment, education, training and other community engagements", the paper said. Ms Upton said participation would not be mandatory.
Most of the social housing system is 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.
It cited a system in the US city of Atlanta, where the private sector helped develop and fund a mixed-income community.
The government also says the social housing system should be made fairer by prioritising those most in need, and addressing antisocial and illegal behaviour which can make other tenants feel unsafe.
It singled out Queensland's controversial "three strikes" policy for unacceptable tenant behaviour.
The discussion paper will be open for comments until February 20 next year. The government will respond next July.
A parliamentary inquiry this year said the government should invest all proceeds from public housing sales into a dedicated fund to provide more homes, and should consider appointing a housing minister.
Independent Sydney MP Alex Greenwich, who has strongly opposed the Millers Point sales, said the government should establish a "clear plan with targets they are held accountable for achieving". He said the final policy should be released before the election.
NSW Federation of Housing Associations chief executive Lucy Burgmann said community housing providers can help provide more homes, by accessing Commonwealth funding and tax concessions.
