Solving Sydney's public housing crisis is about getting the best out of people

The Department's difficulty is a real one. It is income-poor and asset-rich. With the decline of the Commonwealth-State Housing Agreement, the value of the asset is being eroded by its failure to generate enough of a return in the way of income to meet the bill for even basic maintenance.

In this context the response has been the classic one: sell the asset! However in inner-urban areas this overlooks the strategic value of the asset, which is the capacity of enclaves of rent-controlled housing located close to transport and other essential services to supply a labour market currently experiencing shortages in unskilled or lower-paid occupations.

Recent and current redevelopment proposals, in Redfern and Erskineville for example, involve demolition and rebuilding. The number of public housing units will not be reduced. Only the densities will increase as private developments share the space previously occupied by public housing alone.

What might have been lost - particularly in Erskineville, before the proposal was abandoned prior to the recent state election - was one of the best-functioning and most cohesive enclaves of public housing in the inner-city. Its destruction would have been a personal tragedy for many of the existing tenants and undermined the key objectives - and substantial good work - of the Department's Community Renewal Strategy.

This is where the talk of a "whole of government" approach is tested. The DoH - viewed as a stand-alone agency - is a manager of housing, not a community development or employment agency. But it is also an agency of government and government can - and should - take the largest view possible of what is achievable with limited resources.

If Department of Housing tenants were viewed as assets rather than liabilities, the state's balance sheet might look even healthier than it does. And selling these sorts of assets - to potential employers and businesses looking to develop in or relocate to Sydney - might go on adding value to communities for years rather than hitting the bottom line once and disappearing for ever.