This is part one of my series Winning on Welfare Street.
A good news story
It was late afternoon just a few days before Christmas when Sydney's Murdoch owned tabloid The Daily Telegraph posted a good news story about what a successful day it had been for auctions in Sydney.
Earlier in the day, Ricky Briggs of Cooley Auctions had sold 12 solid three bedroom houses in Welfare Street and Flemington Road, Homebush West for a total of $10.5 million.
The DT story featured an image of 14 Welfare Street which like all the other houses had three big bedrooms and a big backyard. This home with its spruced up spacious living areas had been sold for $200,000 above its reserve price. The photo was supplied by Strathfield Partners which touted the 12 properties as a "once in a blue moon"opportunity, just the sort of "affordable" dream homes for which "you have been holding back". The agents promised potential buyers that the homes were available to rent or occupy or, if desired, could be converted for commercial purposes.
The news story also led with a photo of an enthusiastic and happy Briggs waving his hammer. It's not hard to understand why he is Chair of the Young Agents Chapter for Real Estate NSW.
Strathfield Partners agents assigned to the sale were Michael Ma and Norman So who both developed their knowledge of real estate as managers in the Westpac Bank. Like Briggs, they're up and coming property industry players who help promote and churn over deals. The fees and commissions from the successful sale will have been a nice end of year bonus.
For Briggs, the three hour auction topped off an excellent year. According to his twitter account, he hopes for a career in the media and already enjoys spots on 2UE. A finalist in this year's NSW Real Estate awards, he describes himself as "natural communicator" with an "outstanding ability to emotionally engage buyers and know when to push for a bid is key to his success in extracting the highest price for his vendors – the fundamental driver at every auction he performs." You can read more about his career so far on his linked in site.
In November he had posted a photo of himself at lunch with Premier Mike Baird who he describes as an "inspiration".
Last week, Briggs announced that he had moved on from Cooley Auctions. He has launched Briggs Auction Services which will have a close relationship with LJ Hooker.
Briggs must have been happy with the DT story because he posted it on his twitter account.
Sydney Morning Herald tells a different story
If it had been left to News Corporation, the Welfare street sales would have disappeared from public view, forgotten in a blur of "jaws dropping" sales in Western Sydney where, as the DT told its readers the next day, "prices reached staggering heights and a frenzied auction market pitted desperate buyers against each other in bidding wars."
But luckily on the following days, the SMH published two stories in which it began to reveal a version of events that was closer to the full truth. (Read more about the 'strong arming' of the residents in Rose Powell's story).
Powell's story was accompanied by a photo ot two elderly tenants in their home which helped humanise the issue. And although SMH also a glossy real estate agency supplied image, the story content was dramatically different from the DT.
Far from the peaceful upbeat scene promoted by Briggs and the agents on twitter, Welfare Street had been a scene of angry protests. It began to sound like Briggs' experience was far from pleasant. The SMH reported that:
After the scuffle at one of the final auctions, Mr Briggs said three police officers arrived "within minutes" and soon called for back up. "A lot of the buyers were scared," he said. "We ended up having 12 police there and two detectives." The auctioneer said a female police officer had stepped in after the main protester - who was there with six of his friends - again "went for the same staff member". "Basically she got in between those two .... and she literally picked him up and threw him backwards". Mr Briggs said that police evacuated two streets following the incident."They kicked everyone out as soon as the last auction finished - they removed everyone."
In contrast to his smiling DT picture, Briggs was annoyed at the interruptions, especially when someone called out that the auction was fraudulent. One tenant held up an old piece of paper from the 1960s but Briggs told the SMH he just "boomed back that this gentleman's names were not on the contract and they had told me to sell." I tried unsuccessfully to contact Briggs at his new business to find out how much he knew about the properties.
One presumes the DT reporter did not know about the ructions that upset Briggs. Perhaps she relied on information from trusted real estate sources.
People still live in 'dream homes'
The 12 houses are not all available for occupation or development. In fact a number of the homes are still occupied by long term residents who up until a couple of months ago had every reason to believe that they could continue living in them.
The Sydney Olympic Park Authority, which took over the land from old government owned abattoirs, has for many years rented the properties to tenants through long term affordable rent arrangements called protected tenancies. But SOPA decided to sell the land through the Government Property Office, who in turn hired global real estate firm CBRE to do the transaction. A NSW government E tender notice appeared in June last year. The tender notice described the property as a single tenanted lot. It did mention the potential for subdivision into separate titles, although significantly the letters 'STCA' appeared. These are an abbreviation for 'subject to Council approval'.
At the time, SOPA assured its tenants that there were no plans to evict them.
The Managing Director of Strathfield Partners Robert Pignataro told the SMH that a "private investor" had bought the property on November 21 for $5.8 million and sold it for a total of $10.5 million less than a month later. A quick $4.7 million, less some costs. The buyers were reported to be all Asian investors.
The SMH did not reveal the identity of the "private investor" in its initial report. Whoever the investor was, he or she was aware of the long term and protected tenants and moved quickly to improve the market value by trying to remove them. Termination notices were delivered soon after the deal with the government was clinched. Two households moved. It's not known if they understood their rights or were fairly compensated.The remaining residents are upset and determined to exercise their legal rights. They have no plans to move.
Protected tenancies were introduced during the 1930s depression when jobless renters fought evictions. If you have one of the rare remaining protected tenancies in NSW, you are fortunate, simply because you have some legal rights.
Along with public housing, protected tenancies provided some security for many lower incomes citizens up until the 1960s. Pressure from landlords and property developers resulted in new laws stripping tenants of their rights being passed in the late 1960s. (John Birmingham covered this aspect of the story well in his Fairfax column on December 27)
This legal fight could be a protracted one. I once had two friends called the Woo sisters who lived in a flat in the Village in Kings Cross. It took more than 5 years for the then owners of Katies clothing stores to evict them. The landlords ended up offering them a permanent flat in Elizabeth Bay. I also met many protected tenants in Victoria Street, Kings Cross who had their tenancies broken by thugs who were hired by developers to simply move them from one rented room to another. But that's all a long time ago in the 1970s.
I'll return to the Welfare Street tenants later in this series. In the meantime, I'm sure readers of this blog would like to know more about the developers who will benefit from the deal and initiated the processes that took away the tenants' security. So in Part 2, I aim to take a closer look at these investors who stand to make nearly $5 million from the deal. As I said, whoever they were, they moved extremely fast, maybe too fast. In Parts 3, 4 and 5, I'll look at other aspects of the property deal.
I'm also waiting for answers to questions for the Minister for Sport and Recreation Stuart Ayres who is responsible for SOPA.