Feb 19, 2013

Co-operatives: an answer to affordable housing?

With increasing pressure on policymakers to find creative solutions to the housing affordability crisis, more consideration should be given to co-operatives. ANU student Farz Edraki is glad he's part of one.

Australia is one of the most unaffordable places to live in the world. And with limited affordable housing options, it's renters who suffer the most. Enter housing co-operatives. Democratically run, a housing co-operative is managed by its residents, who take on the responsibility for its operation. My experience as a member of a housing co-op, at least, is they work. In a recent report by the Housing Action Network, Dr Tony Gilmour pinpoints housing co-operatives as the "hidden success story of Australian affordable housing". He claims co-operatives are well-suited to meet the growing challenges in Australia's difficult housing markets. For one thing, in co-operatives where members actually own the property (what Gilmour refers to as "full equity" co-operatives), members are in a better position to pool resources. Under the co-operative model, any profits gained by the organisation are ideally distributed back to members. Co-operatives also have the advantage of allowing residents a greater degree of control over decision-making processes in terms of managing rent, property, etc. "We're all landlords and tenants," as one member of the Ningana co-operative in Sydney's Annandale said. Gilmour's report found housing co-operatives provided added support to members and helped develop "stable, functional communities" -- often within niche groups. Van Lang, a Vietnamese co-operative, runs weekly community activities for its senior residents: English classes, Tai Chi and computer lessons. There are also aged care and student co-operatives, and co-operatives for people with disabilities. So if housing co-operatives are well-equipped to "fill the gap" between "high-need social housing and unsubsidised market housing", as Gilmour argues, why are they often overlooked by policymakers? Few would associate co-operative arrangements with housing. Yet The Australian Institute reports eight out of 10 Australians are members of co-operatives -- from motoring groups like the NRMA to super funds -- but only a quarter are aware of it. State and territory governments are looking more closely at housing co-ops. The NSW government recently pledged to transfer the titles to over 6000 houses to Common Equity NSW, a not-for-profit organisation that manages housing co-operatives in the state. This promise has not been fulfilled, to the frustration of CENSW board members. A 2012 report by the ACT Legislative Assembly Standing Committee on Education, Training, and Youth Affairs recommended the government "explore developing student co-operative models, along the lines of the Sydney University model, with ANU [Australian National University] or UC [University of Canberra] and report to the Legislative Assembly on this matter". That was welcome news to members of the Canberra Student Housing Co-operative, established in late 2011 to address the housing affordability concerns of ANU students. "If you're studying full time and you're getting the full amount of Centrelink Youth Allowance, there's still a pretty big shortfall," CSHC director Tom Stayner told Crikey. For single students living out of home, the maximum fortnightly rent payment under Youth Allowance is $407.50. Compare this with the $618 UniLodge (Lena Karmel) charges every fortnight for a single studio room, or $534 for a six-bedroom multishare, and it's unsurprising students are having trouble finding an affordable place to live. While some are sceptical the co-operative model can help, others are hopeful. Peter Quinton, the ACT's registrar for co-operatives, concedes it's unlikely co-operatives will entirely displace unit-titled schemes in the near future -- but that doesn't mean the model can't be integrated into existing ownership structures. He sees university colleges and community housing as two areas that could benefit by adopting the co-operative model. As Gilmour puts it, co-operatives can at the very least play a "boutique" role in Australian housing. After the UN named 2012 the international year of the co-operative, it may be time. *Farz Edraki is a member of the Canberra Student Housing Co-operative and editor of ANU Student Media

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3 thoughts on “Co-operatives: an answer to affordable housing?

  1. Gavin Moodie

    Nice piece.

    Former Victorian Labor minister Race Mathews is a vigorous advocate of co operatives.

    I would have written ‘a greater degree of control’ as ‘more control’.

  2. michael r james

    I would be inclined to agree with Gavin Moodie, except that this article has left it a bit opaque exactly what these co-operatives are and how they work. It has taken me at least 20 minutes chasing some of the links given (which are just links to links to pdfs). Here are the relevant bits:

    [3.4 These developments were predominantly in the form of Public Private Partnerships (PPP) and were typically Build Own Operate Transfer (BOOT) projects where institutions entered into a contract with a developer/operator for development of development and provision of student accommodation for a set period of time on land owned by the institution involved. At the end of the set term, the facilities were transferred back to the institution. The attraction of this option was institutions, being land-rich, with high market demand, but limited in capital or access to capital.
    3.5 This model was effective until the onset of the global financial crisis in 2008
    made such projects problematic, due to limited finance, private organisation
    unwillingness to accept long term commitment, and high initial costs associated with a project establishment and impact on development returns.
    3.6 Newer developments have generated options for private developers where
    accommodation is developed, primarily off-campus, procured with lead finance borrowing but often based on strata title to ensure access to finance and limit long-term equity, relying on larger unit size and ensuring future potential for sale of equity in developments.]

  3. AR

    Co-operatives?? housing co-operatives?!FFS! wot happened to the 60s? And the 1860?
    Not to mention every Quaker/Shaker/Digger attempt for centuries.
    Yet, always, as soon as people get something to own their heart changes.

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