I'm not sure how it works, but my friends sister is in Dept housing yet it is a private rental. Basically, she pays Dept housing amount of rent and Dept housing put up the bond for her. She is in a BEAUTIFUL 5 bedroom, 3 year old house with distant ocean views! It's hard to not be jealous! lol
From memory, she got such a great house because she was transferring from Sydney to Newcastle to be closer to family (her support network) and there were no 4+ bedroom houses available in the area at the time so she had to go private through Dept housing.

Definitely arrange to speak to someone at Dept housing and tell them of your fears. It can't hurt to speak to a counsellor or even a social worker to help with your case to get you out of a dangerous neighbourhood and in to a safer one.

Big hugs honey.