In the latest example, the Darling House aged care home at Millers Point has been informed that a $5-a-week rent agreement struck more than 20 years ago will be scrapped, forcing the facility to close and leaving residents "stunned".

The Department of Family and Community Services rents about 1200 properties to non-profit organisations, many on peppercorn rents. It has confirmed it intends to fulfil a direction by Treasury that "market values …. be realised" on the lease of the assets – a move critics have described as "cruel".

Darling House's management was informed in August that the government would charge full market rent after one more year on the lease deal.

Residents were told last week that the rent increase, combined with other factors, meant the facility will close next March. It comprises nine units, catering to elderly residents requiring low-level care.

Board member John McInerney said the rent increase could be up to $200,000 a year, delivering "the final nail in the coffin" to the struggling facility.

He said the community was "under attack" following the government's public housing sell-off at Millers Point.

Eileen Enslow, who turns 90 later this month, said the announcement left her and other residents "stunned".

"It's the last thing we could have expected. I don't know what they intend doing with the place," she said.

Millers Point: a community under the hammer

The Council of Social Service of NSW paid $24 a year for the Old Children's Court in Surry Hills, however that arrangement ends this week. The group will pay market rent at a new premises and has curbed spending and sought new funding to cover costs.

In the Illawarra, the non-profit Warilla Child Care Centre must pay market rent from December next year, bringing to an end a $1-a-year agreement in place since 1976.

The operator, Shellharbour City Council, will close the centre if an alternative operator cannot be found.

"Moving to market rental would increase the operating deficit, which would need to be met by either the council or passed on to families," a spokeswoman said, estimating that daily childcare rates would increase from $70 to $100.

It is understood the peppercorn rent paid by the Glebe Youth Service is also in doubt.

Greens MP Jamie Parker said the move to market rent was "a cruel ideological attack that will inevitably see these critical services close".

A departmental spokeswoman said it "understands the value these facilities provide to the community and will do everything it can to implement government's policy sensitively".

She said the department would retain the conditions of leases when they expire, "while negotiations take place on a new lease agreement".