The Federal Government is being called upon to explore co-operative housing models, widely used in Europe, as a key solution to Australia’s worsening rental affordability crisis.
A report released today by the Business Council of Co-operatives and Mutuals (BCCM) highlights the success of co-operative housing schemes across Europe and recommends their adoption in Australia to boost affordable housing supply.
“There’s no question affordable housing is in crisis,” said BCCM Chief Executive Melina Morrison. “We need new strategies that recognise the traditional model of private rental investment, alone, cannot deliver housing for all Australians in need.”
The report, which comes ahead of the BCCM’s National Affordable Housing Strategy launch, calls for several measures, including mandating that a percentage of build-to-rent projects be allocated for co-operative housing, aiming for a 10% share of community housing, and creating dedicated funding for co-operatives under the Housing Affordability Future Fund (HAFF).
Commenting on the report’s recommendations, Real Estate Institute of Australia (REIA) President Leanne Pilkington said, “What I would say is that everyone agrees that lack of supply is the cause of the housing crisis, so anything that can positively impact supply should be investigated thoroughly.”
Co-operative housing models, popular in European cities like Copenhagen, Vienna, and Zurich, make up 20%, 21%, and 18% of the total housing stock in those areas, respectively. In comparison, co-operative housing accounts for only 0.5% of Australia’s total housing stock.
The report highlights that with the right legislative supports and funding, Australia could develop its own co-operative housing sector to help address the twin challenges of housing supply and affordability.
Liz Thomas, Managing Director of Common Equity Housing Ltd (CEHL), Australia’s largest co-op housing developer, emphasised the potential for growth.
“We have 140 shovel-ready properties that we could get underway with HAFF funding dedicated to co-op housing. By funding the growth of co-op housing, the government is not only addressing housing supply and affordability but also delivering fair rents and the opportunity for renters to be engaged in managing their housing and security of tenure,” said Ms Thomas.
The report also calls for a revision of HAFF guidelines to include dedicated funding for affordable rental co-operatives and a review of financial regulations to unlock non-bank funding for housing co-operatives and community land trusts.
The BCCM report notes that Australia’s current focus on investor-driven build-to-rent models may overlook the long-term affordability benefits offered by co-operative housing.
“In Europe, stringent requirements ensure that only non-profit or limited-profit developers can construct affordable housing, building at cost to keep rents affordable,” the report stated.
