The chronic shortage of social and affordable housing in Australia is forcing record levels of homelessness. More and more people are struggling to afford the private rental market and the demand for affordable or social rental properties is outstripping supply. Action is needed across all levels of Government to address the reforms required to boost investment in and roll out social and affordable housing that is suitably located and appropriately designed.
Nearly 750,000 additional affordable homes will be required across Australia over the next 20 years – we need to act now.
What does affordable housing look like?
There are different models for affordable housing. Here, we have explained a few different options.
Social housing is an umbrella term used to describe rental housing which is managed and/or provided by government or non-government organisations and includes public housing and community housing.
A Housing Trust is a legal agreement between a Trustor (the owner of the property being put into the Trust, e.g. government) and a Trustee (a person or organisation administrating the property on behalf of the Trustor, e.g. YWCA Housing).
A Trust Deed is the document that binds the Trust to provide housing exclusively and in perpetuity, and is agreed upon between the Trustor and Trustee. The Housing Trust receives and holds property or funds in order to deliver housing.
Shared equity is a general term given to an arrangement between two or more people or organisations (‘legal entities’) who share the cost of buying a dwelling. This arrangement is usually offered by government, community organisations or the private sector. Shared equity arrangements are also usually targeted at people who can finance a low to moderate loan.
Shared Equity is a general term; therefore, it is important to understand what kind of shared equity arrangement it is and who is involved. Common shared equity arrangements in Australia are called shared equity loans or shared ownership.
Shared Equity Loans: One loan is taken out on a portion of the property (e.g. 70%) and second loan is taken out on the remainder of the property (e.g. 30%) or the other portion of the property is owned by someone else (like YWCA National Housing or government). The person then pays off the loan they took out on their portion of the property.
Shared Ownership: One loan is taken out on a portion of the property (e.g. 70%) and you either pay rates, insurance and maintenance over all the property, or pay rent on the remainder of the property (e.g. 30%) to the property owner, but not both.
In both cases, you have the option of gradually buying the remainder of the property, if you can. If you decide to sell with the shared equity agreement still in place, then you get your portion back (e.g. 70%), plus any increase in value of the property (e.g. 70% of the increased value) and the other party gets their share back (e.g. 30%), plus any increase in value of the property (e.g. 30% of the increased value).
- Australia – Shared Equity Schemes
- Queensland – Pathways Shared Equity Loans
- New South Wales – First Home Buyers Assistance Scheme
- Australian Capital Territory – Shared Equity Scheme
- Victoria – HomesVic Shared Equity Initiative
- Tasmania – HomeShare
- South Australia – Shared Equity Loans
- Western Australia – Shared Home Ownership
- Australian Housing and Urban Research Institute – What is a shared equity scheme
Cohousing is a type of housing development that is sustainable and affordable and built for the purpose of those who want to live in the development. Cohousing is set-up intentionally and promotes social interaction, environmental sustainability and accessible housing. It does this through:
- community‐friendly planning and design
- shared ownership
- joint responsibility for expenses and work related to the cohousing development
- shared meals
- help among residents
- multigenerational memberships, and
They often use consensus or democratic forms of collective decision making to settle issues.
Community Land Trust (CLT) is a not-for-profit organisation which owns real estate (land and/or dwellings) for the benefit of locals who can’t afford to live in the community.
The CLT ensures the real estate remains affordable for local people to live in the dwelling. It also reinvests any surplus money back into the organisation to provide more benefits to the community.
CLTs are similar to a community housing provider with the main difference of CLT’s considered focus on community involvement to deliver projects.