The future of a long-awaited government housing project intended to ease a chronic housing shortfall in the Northern Territory is in question, internal documents have revealed.
The NT government had expected the first stage of the development in Darwin's inner suburbs to be complete by last May, adding 30 two-bedroom units to the burdened urban public housing sector.
However, the building in The Narrows is still empty.
The delay has come while the public housing waitlist has soared to more than 5,700 applicants, including transfers, and advocates have called on the government to resolve the issues as soon as possible.
"We’ve got 30 brand new units over there at the moment sitting empty while we’ve got a big increase in women fleeing domestic violence and [needing] long-term housing," Peter McMillan from NT Shelter said.
Building's sale proposed
Documents released under Freedom of Information laws show the government has sought advice on ending the nine-year social housing lease underpinning the project.
The development was first proposed in 2017 under a housing strategy in which the government would lease buildings from private industry.
The government and developer Tomazos Group signed off on a lease agreement after "extensive negotiations" about two years later, and the documents show the agreement helped the developer secure finance for the project.
A rent amount was set for the first three years of the lease, after which market rent would apply.
However, the documents show a person or business engaged by the developer, whose name has been redacted, is exploring the possibility of selling the project.
One of the options proposed was selling the building to the government to on-sell under an affordable home buyer scheme.
"The financial cost of purchasing 30 dwellings in the current market would be significant," a briefing for Urban Housing Minister Kate Worden from late last year said.
"The Tomazos Group's desire to sell the dwellings is likely related to the capped rent amount on the dwellings for the next three years.
"The delay in construction, and the upturn in the Darwin housing market, has meant that the owner will receive below-market rent for the next three years.
The documents showed the minister rejected the affordable home-buying proposal and was considering her options.
The ABC has previously revealed the NT government had signed the lease agreement after it had been contacted about alleged defects in a separate set of affordable rental properties overseen by the same developer, which later saw them emptied while repairs were carried out.
Tomazos Group denies responsibility for the issues in those properties, and has previously said it was required to finish building them after a company it contracted entered liquidation.
The company also previously said an engineer and a registered building certifier had assured it that the building work, including that done by the original builder, was compliant with all codes.
Thousands waiting for housing
Ms Worden has previously pointed to the development as an example of the government's work to combat the significant housing shortage, including when the demolition of 32 "notorious" public housing units in Palmerston was announced last year.
At the time, the minister said being relocated to the Narrows would be "one consideration for tenants here (in the blocks being demolished)".
The exact reason why the new block has been delayed is unclear. However, an NT government spokeswoman has previously said there were "COVID-19 supply challenges" and upgrades required to onsite water mains.
Meanwhile, the housing waitlist has ballooned throughout the pandemic, with almost 1,000 people added in the 18 months to the end of 2022.
New government housing has failed to keep pace with the growing demand, remaining largely static over the two most recent financial years, according to publicly available department documents.
Mr McMillan said the delay in tenanting the new housing project was "not good enough" and showed a lack of urgency within the government.
"There's no excuse for that not being ready and the big losers here are the people waiting up to 10 years for housing," he said.
In response to the demand issues, the NT government has committed to growing the affordable and social housing sector, with a $21 million investment announced last December.
Government considering options
The released documents also show that in September last year, Ms Worden sought advice on options for ending the lease agreement if required.
They say the government can end the lease because Tomazos Group exceeded a May 30, 2021, deadline for practical completion of the property.
No decision on what to do with the building has yet been made, and a government spokesperson said the lease agreement would be transferred to any new owner if the properties were sold.
The documents also suggest the "preferred focus" is to assign the lease to a community housing provider (CHP) or encourage it to purchase the property.
"This would build sector capacity, however there are remaining concerns given a number of compliance issues have arisen in other properties built by the Tomazos Group and are now owned by CHPs," the documents say.
Asked when the property would be tenanted, a government spokeswoman said a compliance check of the property was outstanding and individual property titles were yet to be issued.
In a statement, Ms Worden said these conditions were required under the lease agreement "to ensure the best interests for the taxpayer and value for the Territory".
"Once these compliance checks are complete and fully satisfied, it is anticipated that the lease agreement will commence," the statement said.
"It is not unusual to explore options should terms of any agreement not be met."
Tomazos Group has been contacted for comment.
