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Empty dwellings in a city desperate for places to live

IN ITS obsession with property prices and housing affordability, Sydney has overlooked a startling fact: the city is awash with empty buildings.

The number of unoccupied residential dwellings in Sydney counted by census workers in 2006 was 122,211, with the highest number found in the inner city. That does not include the thousands of empty warehouses, pubs, churches and shops.

"It's an amazing figure, isn't it? It begs analysis," said Col James, the director of the Ian Buchan Fell Housing Research Centre, in the University of Sydney's architecture faculty. The number was up from 97,889 a decade ago.

"The numbers would be swelling now there are more mortgage defaulters," he said. "There are empty properties all over the place if you know how to look for them."

Some belong to people whose development applications are languishing with councils. Other owners are saving up to renovate.

Hundreds of houses are lying vacant while children who inherited them fight over property rights. Hundreds more become orphan homes after the death of owners with no next of kin.

"Some properties are probably vacant for very good reasons but there are others that are left deliberately vacant," Mr James said. "Property developers get distinct advantages from the Commonwealth Government like negative gearing to alleviate their tax bill.

"They also get a rental subsidy if they say, 'We will make this property available for the rental market.' But they pocket the subsidy, saying, 'We tried to rent it but we couldn't' and then they don't get the hassle of tenants."

The Sydney property magnates Isaac and Susan Wakil are wealthy enough not to need rental subsidies or tenants.

The elderly Vaucluse couple, arts patrons and former darlings of the social pages, have accumulated 15 properties across Pyrmont and the city centre, a portfolio estimated to be worth more than $75 million.

All their buildings and land are vacant, except for the Harris Street headquarters of their company, Citilease - and the ground floor of that is empty.

The Wakils' cream Rolls-Royce can be seen most days parked in the driveway of Citilease but the reclusive couple declined to speak to the Herald for this story.

Mrs Wakil, who was born in the then Romanian province of Bessarabia in 1932, told the Herald in 1961 she still remembered her father being dragged to a Siberian gulag for being a capitalist land owner when she was seven.

After imprisonment in a Soviet concentration camp, her mother died and the young Susan and her aunt escaped to Australia. Her father migrated here after his release.

The Baghdad-born Mr Wakil is rarely seen in public; neighbours, real estate agents and buyers speak of negotiating only with Mrs Wakil.

The Wakils' Griffiths Teas building in Wentworth Avenue is empty but for the telltale signs of squatters past: old sleeping bags, empty longneck bottles, and rubbish.

The heritage listing limits redevelopment opportunities but that has not stopped the offers.

"We were interested in having that building for a boutique hotel conversion," said Paul Fischmann, the chief executive of the Eight Hotels Group, which owns the Diamant Hotel in Potts Point. "The answer we got back was that it wasn't worth her while."

Their other properties include the neighbouring Key College House, several terraces in Pyrmont and an empty corner shop on Harris Street.

"On average, we get about one inquiry a week, mostly from developers who say 'What's the story with this vacant block?"' said Patricia Kho, of Elders Pyrmont. "There are a fair few serious developers who have said that, given the opportunity to purchase, they would go in."

Ms Kho said the Wakils' hoard of vacant properties was a mystery. "It's a question a lot of agents in the area don't know the answer to.

"I know it's a family holding and they don't need to sell. These are properties they bought a long time ago that have been paid off. It will cost them money to do it up and rent it out so they are just sitting on the land value."

One of their most obviously vacant properties is the Terminus Hotel on Harris Street, Pyrmont. Ancient beer ads adorn the hotel's exterior. Its sign is covered with vines, and wooden boards cover broken windows.

"It's been empty for more than 15 years," said Mickie Quick, a co-founder of the squatter's group Squatspace. "We got inside once and changed the locks but we only lasted a few weeks. It was one of the scariest evictions I had ever had. Two hired guns came in with sledgehammers in the night."

Dianne Tipping, the owner of Tattersalls Hotel in Rozelle, said many of the city's empty buildings were former pubs awaiting redevelopment applications. Pubs are among the oldest buildings in Sydney and many need a lot of work.

"The Tattersalls was built in 1879 and really had nothing much done on it since then except a few lean-tos put on," she said. "So [two years ago] I decided to bite the bullet and close it down."

It has been vacant since. She had to wait for her development application to be approved by Leichhardt Council and for her architect to return from maternity leave. Her pub will be refurbished and reopened.

Every year about 1200 vacant houses fall into the hands of the Public Trustee, Peter Whitehead, because people die without leaving a will or heir. "Or sometimes people go missing and leave their houses uninhabited," he said.

Public Trustee staff search vacant properties for wills and seek next of kin in Australia and overseas. If no heirs are found, properties are sold and proceeds go to the state.

"All that can take an incredible amount of time, during which the property is often sitting there vacant," Mr Whitehead said.

Mr James said this was wasteful. He wants councils and insurers to charge higher rates for vacant properties to promote more efficient use of space and to encourage owners to allow squatters, artists, students and the homeless to live in their buildings.

"You get the property development industry bleating about how they need to produce 1000 dwellings a week to meet housing demand," he said. "I say to them, "Well, guys, there's 120,000 houses out there you are not doing anything with."

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