Imagine a housing option that is affordable and secure, enhances the health and wellbeing of residents, fosters a sense of agency, voice, and empowerment, cultivates a robust sense of community, and provides opportunities for skills development, employment, and education.
What you’re envisioning is a rental housing co-operative, a model that fills a significant gap in Australia’s housing sector. This model has been gaining renewed public and political interest as a potential solution to our affordable housing crisis.
Housing co-ops are not a novel concept. In Europe, the Americas, and Asia, they provide secure, affordable, and decent housing to substantial portions of the population⁷. In cities like Copenhagen, Vienna, and Zurich – all top-ranking capitals for affordability and liveability – they constitute up to 20-25% of the total housing stock, offering tenants secure and decent housing in inner-city locations where they work.
In Australia, however, the equivalent figure is less than 1%. It’s clear that we need more options that sit between private ownership and private rental.
The Australian co-operative sector comprises three main models:
The rental housing co-operative sector, which offers affordable and secure rental housing with rents adjusted to income, is by far the largest.
Tenants are expected to actively participate in the management and governance of the co-op. This participation empowers tenants to develop and maintain the co-operative’s common areas/gardens and social events according to their needs and desires, while maintaining their own private flat or house.
In a rental housing co-operative, while tenants rent their unit, the house can be owned by the co-operative, a not-for-profit housing provider, or the government. In a private equity housing co-operative, people purchase their co-operative unit or house at market price while maintaining active involvement in the governance of the co-operative. The land is held in common, usually using either community title or strata title.
Aboriginal housing co-operatives are also predominantly rental housing co-operatives but are registered as multi-stakeholder co-operatives, offering affordable housing complemented by Aboriginal-run health and social services.
Our forthcoming research shows how tenant participation and agency positively impact wellbeing and civic engagement. Support to actively participate in the governance and management of the co-op provides tenants with an opportunity to develop skills and knowledge, useful for both their working and personal life. The agency to contribute to decisions about the co-op and make decisions about their own rental dwelling, combined with longevity of tenure, contributes to a feeling of security and leads to a strong feeling of the co-operative ‘feeling like a home’ where tenants want to continue to live.
An inability to access secure housing is connected to numerous other complex issues.
For low-income and increasingly middle-income households, buying a house is becoming unattainable due to unaffordable deposits, insecure employment, huge commuter distances, health issues and lack of affordable child-care to support dual incomes.
We see more people renting and renting for longer. Relying on private renting often means people must move repeatedly, which is stressful, reduces community and school connections, and is unaffordable for low-income households.
The waiting lists for social, community or public housing are long and often only offered to those with complex needs.
These factors contribute to increased homelessness and insecure housing for increasing numbers of families, older Australians, people with a disability or minority background, on low-to average incomes.
Co-operatives are based on values of self-help, self-responsibility, democracy, equality, equity, and solidarity. They practice values of honesty, openness, social responsibility and caring for others. All characteristics that contribute to positive wellbeing and a mindset geared towards secure long-term housing as a right.
The unique characteristics of co-operatives can make them powerful actors in innovating these systems and building local economies if the right policies and financial incentives are developed.
But how can we expand and fund co-ops?
We can learn from co-operative federations in other countries, established to provide services and support for co-operatives to manage their governance, maintenance and social development.
We can also learn from financial and institutional frameworks in other countries with substantial housing co-op sectors. Fundamental to these is an acknowledgement that housing policies must prioritise homes to live in, rather than houses as investments.
Denmark has ensured growth of the sector with their long-term vision of building a perpetual affordable housing cooperative development fund. By law, each month, part of a co-op tenant’s rent contributes to the fund which is now substantial in size and is only ever to be used for constructing new rental housing co-operatives.
In Vienna, a dedicated government agency Wohnfonds actively purchases land for affordable housing, taking land out of commercial “speculation” to secure future affordable housing projects.
In Zurich, co-ops approach the funding issue with a collaborative systems approach to financing affordable housing. Co-ops can access a mixed solution of commercial debt financing, low-interest loans from government, co-operative solidarity funds and/or ethical investor funds and the individual co-op member’s equity.
Housing across the entire spectrum matters. What we are missing in Australia is diversity and options.
On the one hand we have social housing which is highly subsidised with restrictive eligibility criteria, and on the other, market rental and market ownership with very little in between.
A more diverse continuum creates more options for people to be housed securely and affordably, according to their circumstances.
Dr Sidsel Grimstad is a Senior Lecturer and Teaching and Learning Lead at the Griffith Centre for Systems Innovation (GCSI). Her knowledge and passion for member-owned, cooperatives and mutual enterprises or housing solutions is built on a decade’s worth of research on cooperatives and mutuals as collaborative, innovative, distributive and resilient business models for pursuing sustainable development and socially equitable goals.
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