City News

Dangerous inner city housing operation uncovered

Two sets of bunk beds located in an apartment living room in Chippendale.

Following a fire in an overcrowded property in Alexandria on July 2, the City Hub has identified a series of up to 150 unauthorised boarding houses throughout the city, all of which appear to be part of a single operation. An undercover investigation found dangerously overcrowded living conditions with tenants sharing small rooms with up to 5 other people with some even sleeping on the living room floor.
City Hub can also reveal that the operation of these boarding houses was reported to the City of Sydney Council in May 2014 but council appears to have taken no action as a result of the complaint.
The investigation located the boarding houses through a series of online advertisements. City Hub then spoke to a number of tenants and managers of the properties while posing as a prospective resident.
The site of the July 2 fire in Alexandria was not investigated by council despite the fact a complaint had been made: “Unfortunately, contrary to City procedures, the complaint was not logged in the internal records system and was therefore not found or investigated,” a City of Sydney spokesperson said.
The fire occurred shortly after council investigated and evicted yet another overcrowded property on Quarry Street in Ultimo.
During the investigation, City Hub was informed the properties inspected, as well as up to 150 others, are managed out of a supermarket on Regent Street in Chippendale.
It was alleged the supermarket in question also operates the property at Quarry Street, which was reported to council in May of this year. However, it appears the supermarket was not investigated by council following the Quarry Street eviction.
In fact, despite the eviction of the Quarry St property in May, City Hub confirmed it is once again operating as an unauthorised boarding house as of July 15, 2014.
City Hub visited seven separate properties during the course of this investigation, each housing up to 15 tenants. The apartments included a series of bunk beds accommodating four to six people in each bedroom and four people in the common living room and kitchen area.

Tenants slept on floors and unstable bunk beds that were made to fit into any available space, including in common living spaces and hallways. One paying tenant slept on the living room sofa. Apartments housing up to 15 tenants relied on single toilets and kitchen facilities, which appeared unsanitary and under maintained.
The apartments investigated are located in Chippendale and Ultimo. It was alleged there are other apartments managed by the same individuals in the CBD.
The apartments are being advertised for between $100 and $170 per week with a bond of $300 and a fee for the provision of extra swipe cards for each extra tenant.
During the investigation, it was observed that each apartment displayed a notice on the fridge instructing tenants to pay rent to the Regent Street supermarket directly each week. The apartments, among many others including the Quarry Street property, are also connected by a Facebook page that advertises each property individually.
On the Facebook page, each advertisement includes an offer of “20% discount for buying anything at owner’s supermarket”.
Based on the information obtained during this investigation, City Hub calculates the supermarket may be operating up to 150 apartments as unauthorised boarding houses with up to 1,800 tenants in total, resulting in an estimated potential income of up to $14 million per year.
The apartments have not been authorised for use as boarding houses or backpacker accommodation.
This type of overcrowded shared-housing operation may also be against the law, according to Kate Gauld, solicitor for the International Student Service at the Redfern Legal Centre.
“What we often see are cases where a head tenant has advertised a property online and crammed extra tenants into an apartment,” she said.
“Often there is deliberate confusion about who is the property’s landlord, with rent being paid in cash and often to a party other than the property’s owner.
“It is illegal for head tenants to exploit international students in this way.”
It was alleged during the undercover investigation the person running the operation employs between eleven and fifteen individuals, most of whom are in Australia on student or holiday visas, to manage between ten and fifteen apartments each.

These managers are allegedly employed to ensure the apartments are as full as possible at all times and ensure rent is paid to the supermarket on time.
A complaint was made regarding the supermarket in question and was recorded by council in May of this year.
An Assessment Report for the Development Application (DA) for the supermarket was released by council when a decision was made regarding the DA on May 20, 2014.
One objector to the DA stated: “The proposed grocery store is operating as a reception for the illegal subletting of nearby residential units.”
In response to the submission, the DA states: “With regard to illegal subletting of nearby residential units, the matter has been forwarded to Council’s Health and Building Unit for further investigation.”
A media spokesperson for the City of Sydney said the matter had been forwarded to the Health and Building Unit. However, a source from the Health and Building Unit told City Hub no investigation was taking place regarding the property.
The City of Sydney spokesperson said the City was unable to comment on ongoing investigations.
The spokesperson explained that typically a report of this nature would be investigated by council through a series of reviews, inspections and interviews.
“The City receives numerous inquiries each week relating to non-approved residential uses.”
“Investigation of non-approved residential uses typically involves research of the site and its approvals, a review of known residential accommodation sites, followed by an inspection and interviews with tenants and owners, or alleged operators.”
In the case of the properties in Ultimo and Chippendale, investigations into the tenants and owners of the property do not appear to have taken place. In the case of Alexandria, the complaints were not investigated at all. It appears the above protocol was not followed in any of these three instances.
A source at the City of Sydney explained that as well as being a fire hazard, overcrowding poses a serious threat to the structural integrity of inner city buildings, making it a safety issue for all surrounding residents. Housing extra tenants in multiple apartments can cause serious plumbing issues as well as instability in the building’s framework.
City of Sydney Councillor Linda Scott called on council to be more rigorous in its response to these complaints.
“We need a clear and easy procedure for residents to report these issues to council and we need to ensure these complaints are responded to by council in a timely and appropriate fashion,” she said.
Liberal Councillor Edward Mandla told City Hub the City’s emphasis on procedures is to be blamed for the lack of action taken on these complaints.
“Council’s dysfunctional culture of too many processes and check-boxes has stifled out human ingenuity and common sense. We all pat each other on the back for following procedure but the problem is being completely ignored,” Cr Mandla said.
Cr Mandla and Cr Scott outlined their concerns that the problem of illegal boarding houses is a result of the broader problem of a lack of affordable housing in the inner city.
Urbanest, the most recent developer to build student accommodation in the City of Sydney area, charges up to $542 per person per week for their housing – this is three times the rent charged by the unauthorised boarding houses in question.
The City of Sydney Council urged residents to continue making complaints about overcrowded properties in order for Council to address the problem.
City Hub has passed on all information uncovered in this investigation to the relevant authorities.
The Redfern Legal Centre offers legal support to students living in this type of accommodation and has been able to reclaim illegal payments made to landlords, according to Ms Gauld.


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