Are housing co-operatives the future of renting? ABC Life Matters

20 March 2025

Advocates of housing co-operatives say they could be part of the solution to Australia’s rental crisis, so what is the model exactly, and why isn’t it more popular?

Earlier this week, ABC Radio Life Matters’ Tegan Taylor interviewed Kylie, a rental co-op housing resident, Wendy Stone, Professor of Housing and Social Policy, Swinburne University of Technology, and Liz Thomas, Chair of the Australian Co-operative Housing Alliance and CEO of CEHL.

Listen to the interviews online (1:04 – 22:49)

Read the transcript

Tegan Taylor
Could co-ops be part of the housing affordability solution?

Over the past five years, household incomes have risen by 19%. But it sure doesn’t feel like it, does it? And part of the reason why is because in the same period, rental prices have jumped by 48%. According to a report released last week, rental affordability in Australia has fallen to its worst level on record.

So it’s no surprise that the cost of housing is shaping up to be a key federal election issue. Advocates for housing co-ops say they could be part of the solution. They’re a community-led form of social housing, run by the people who live in them. Residents can be renters or they can have a stake in the co-op’s equity. In Europe, co-ops are a well-established option. But scaling up this model in Australia will require more government investment. In a moment, you’ll hear from the chair of the country’s largest co-operative housing alliance and from an expert in housing and social policy.

And I’d also love to hear from you on this. Have you ever lived in a housing co-op? What was the experience like?

Kylie is a single mum who says becoming part of a rental co-op has been life-changing for her family. Kylie, welcome to Life Matters.

Kylie
Thanks for having me.

Tegan Taylor
What attracted you to the idea of co-operative housing at the beginning?

Kylie
I think I was attracted to the model because I felt like it would be a really good way to have some sort of more security as opposed to private renting, which had always felt quite precarious. And I knew that this model of housing sort of would change the landscape basically of how I could live moving forward.

Tegan Taylor
How did you come to find out about it because it’s quite a small part of the housing market in Australia?

Kylie
Yeah, I applied for social housing through Housing Victoria and then I had to go on a bit of a waiting list and then yeah, I actually found out through a friend who or another person who went to my son’s school and she mentioned she had joined a co-op and then, yeah, it sort of came on my radar after that. And then, yeah a house came up and I got to apply for it.

Tegan Taylor
So previously you were in a private rental. How much is the difference in what you were paying before versus now?

Kylie
Well I pay probably less than half of what I was paying before in terms of weekly rent. So that’s so much more affordable than what I was doing before.

Tegan Taylor
So if people haven’t heard of co-ops before, they’re quite different to a private rental. There are extra responsibilities and expectations. What are the rules of living in your co-op?

Kylie
I guess you sign up to be a part of a community and it’s not a free ride. You have to participate as a co-op member. You each become a director and you each take care of the houses that you live in. So you have to attend meetings and become a part of the committee. And then you’ve managed the houses together, obviously through the support of our wider agency, which is the CEHL. Yeah, so you really have to participate and be willing to participate and offer any sort of skill set that you may have gained through life or are willing to learn.

Tegan Taylor
Has this been an adjustment for you coming from renting privately up until now?

Kylie
It’s been a great adjustment. I’ve definitely had to really, I mean, it’s just great because private rental feels quite a lonely sort of journey in a way. And as soon as you become part of a co-op you feel like you are part of a larger community. So the adjustment’s been a really good one and it’s just given me room to breathe and a sense of home, which is what I had been yearning for. And it’s working really well so far.

Tegan Taylor
What about your kids?

Kylie
They love it. Yep. They’re really happy where they are and I mean they’ll come along for the ride no matter where I live and that’s fine. But it’s just been, It’s just great because we, yeah, it just feels like home. I… It’s the only way I can describe it really. It doesn’t feel like this big transactional thing anymore. It just. We can just settle in and think about the future and not stress about all the things that I was really stressing about before. Like, am I going to be able to afford the rent this month? It’s just. Yep, here we are. This is our little home. Growing our garden, doing our thing and staying connected to our other co-op members as well. When, when and we need to.

Tegan Taylor
So, Kylie, it sounds like you really love living there. It really feels like home as you’re saying. Do you look forward on your future and go, I’d like to own a home one day or do you see this as your long term place?

Kylie
I really do see this as my future. I’m more than happy to be sort of renting for forever, really. As long as it takes. I don’t ever see myself being able to afford to get into the housing market. Its not something that’s in my future anymore. Maybe it would have been in my 20s when I just assume like lots of people that you sort of rent for a while and then you make the transition into being a homeowner. But that just didn’t happen for me for whatever reason, and I’m actually really okay with it. I think this is a great model of living and it is actually sustainable. And you know, I don’t see the pressure now to feel like I have to go and buy a house and have all that debt.

Tegan Taylor
You’re listening to Life Matters on Radio National. I’m Tegan Taylor and we’re talking about co-operative housing as an option in the mix of Australia’s housing offer given that rents are so much more expensive than they were in comparison to our wages. If you’ve ever lived in co-operative housing, I’d really love to hear your experience. I want to bring in Wendy Stone to the conversation. Wendy is Professor of Social Housing, Housing and Social Policy rather at Swinburne University of Technology. Wendy, welcome.

Wendy Stone
Good morning, Tegan.

Tegan
So Wendy, you were involved in an independent report that came out last year that examined the pros and cons of housing co-ops. So let’s start with the good news. What did you find?

Wendy Stone
Well, the good news, I think, has been so articulately put actually by Kylie. So just to clarify, I was part of a team across a number of universities which involved Swinburne, Western Sydney University and Griffith University. And we were funded through the Australian Government, Australian Research Council, to really understand what it is about social housing rental co-ops that really works well for people, but also what gets in the way of that and importantly, how that kind of model compares economically and socially when we look at the wider societal benefits. Comparing that with regular social housing, so public housing in its more usual form, and also with private rental, but [I’ll] talk you through the findings.

It’s also important just to position our study and what Kylie’s described as her great experience in that rental co-ops within the social housing sector in Australia are just one part of a collaborative housing movement if you like, that’s gaining more and more traction in Australia which would be great to speak to too. But what we found is what Kylie’s describing.

Overwhelmingly, people who live in social housing, community rental co-ops, felt at home. They were basically able to get on with their lives in ways that were really productive. So children were able to go to school and remain at school without that need to move around and move around in the private rental sector and disrupt their parents, including, single parents were able to care for their children really well because of that community support and the stability of home.

But also we found that across the life course it was a really important option as people were ageing.

So even within the pandemic, while we were studying this during 2020 and through the last couple of years, we found that close neighbours were able to support one in ways that probably most of us weren’t really benefiting from in the wider community. So people were aware when their neighbour was sick, that kind of thing.

There was a lot of social capital, a lot of community, and they’re the kind of engine house that can really make this model work well for people.

Tegan Taylor
What is it about a co-op that makes people more connected than they would be? Just like meeting their neighbours. What are the structures that are really facilitating those relationships?

Wendy Stone
Yeah, that’s such a critical point. So, we found that one of the key benefits of the community rental housing co-op model is actually its diversity. So, what Kylie’s describing is one model. But we found that there are a range of models and in Australia these range from, so you might think really small co-ops of maybe just 10 households for example. Often they’re co-located if you think a bit like a, a sort of a smallish apartment complex. But they can be single houses near each other.

They range to really large co-ops of hundreds of households and some of the factors that do facilitate them working really well together are autonomy and control about the ways they can self manage and self organise.

So Kylie sounds like a really active and you know really able fairly young person. But what we found is that as people age for example there could be an inbuilt flexibility within a co-op setting that enables for example somebody who’s gone through you know a health scare or is just ageing to negotiate with their group about what they can and can’t contribute anymore say physically or coming to those meetings that Kylie mentioned.

So there are ways to negotiate the kind of contributions and what we found is that these sort of formalised autonomy and control mechanisms and this willingness and valuing of the kind of principles of co-operativism if you like really facilitate a whole range of other goods. So, in addition to the kind of roles and responsibilities that go hand in hand with running a co-op, there are all these other benefits that happen. So, neighbourhood involvement, community gardens, local markets, there just seems to be this virtuous circle if you like that is created where co-ops work really well.

Tegan Taylor
I’m asking for your thoughts this morning. If you’ve ever lived in co-operative housing, I’d love to hear your experience.

On the text line, Dee says “I have friends who live in a co-op in Vancouver, Canada. It’s low density, affordable, well planned and maintained and relies on co-operation amongst residents”.

Another texter says, “I have been in my rental co-op since 1997. One other benefit is that responsibility for maintenance is shared, unlike home ownership. If my hot water blows up, I simply contact the co-op and don’t have to organise replacement or payment myself.”

So, Wendy, we’re hearing a lot of pros. Your, the study that you were involved in, that you mentioned before, did find some cons as well. What were they?

Wendy Stone
Yeah, some of the aspects that are really critical to understand, I guess, within the rental sort of social housing rental model but then also stepping back and thinking broadly about the possibilities for collaborative housing.

Within the rental co-ops, so people who are eligible to join social housing rental co-ops also need to be eligible for social housing. So, they’re really targeted for very low-income households. And so that’s a real benefit in a way that people who otherwise are just really having very precarious experiences currently in rental, private rental or where there isn’t sufficient social housing.

So, but it’s not for everyone. One of the aspects of this is that people do really need that sort of induction and education and peer to peer support as well as organisational support to really understand what this model of housing is. Because I think one of the aspects of Australian life is that we are often quite private, quite independent and so for some people it really does either take a bit of a step change if you like and really rethinking how they’re living on a day-to-day basis or alternatively a different model of housing might be better for them. But the diversity of housing was important.

Across the co-ops we found being able to negotiate really well, so having really great systems in place, was critical so that friction could be reduced. And we also found within the social housing co-ops that one of the key points of tension is actually that these co-ops now sit within a wider housing crisis if you like. So the pressure to include people who simply need a roof overhead. It’s really intention sometimes with the desire to house people. When a spot comes up in a co-op, the ideal scenario would be that the household moving in has a really good commitment to co-operative, sort of that co-op lifestyle. But that’s not always the case. So tenancy management issues can get difficult for anyone to manage, but definitely from neighbour to neighbour. So the systems in place and the good governance and really good induction and peer support and management support overwhelmingly though, number one is autonomy and control and that joint sense of purpose. When those are undermined, things can lead to friction and burnout and people leaving.

Tegan Taylor
Wendy, thank you so much for sharing your insights. I’d love to turn to Liz Thomas, who’s been listening in on this discussion. Liz is head of the Australian Co-operative Housing Alliance. Liz, welcome.

Liz Thomas
Thank you. Welcome.

Tegan Taylor
So currently rental co-ops are about 1% of the social housing market in Australia. You’re lobbying for the federal government to make it 10%. What would that cost?

Liz Thomas
So the capacity of the Australian [Housing] Co-operative Alliance members at the moment is to increase co-ops by about 500 houses per annum over the next three years. And that would cost about $200, $250 million across Australia to increase the rental housing co-operatives offering those opportunities to people who choose to live in a co-op housing environment.

Tegan Taylor
How different might things look for renters if we did achieve that 10% of the market?

Liz Thomas
Well, at the moment, the three core benefits of rental housing co-operatives in Australia are rental affordability. So rent is set as a percentage of income, 25 per cent of household income up to the market rent of the property. So, your rent remains affordable because it’s linked to your income.

The second is security of tenure. So once somebody lives in a co-op, as long as they maintain their co-op membership, they stay part of that co-op and they have housing security.

And the point that Kylie and Wendy have both influenced, both stressed, the sense of agency and empowerment and addressing that power imbalance that often happens between a landlord and a tenant.

The security of tenure and the benefits of the co-op housing model mean that once someone lives in a co-op, they generally stay there.

So the average length of co-op tenancies in Australia at the moment is around 15 plus years. Here in Victoria, we’ve got one tenant who’s been a member of her co-op for over 40 years.

Unless we increase the supply, we cannot increase the availability of co-op housing.

So to date the Australian housing environment has meant that housing ownership has always been an option for people. It’s no longer that way and we do need to look at what are the alternatives to private rental if someone is not able to enter the home ownership market. And that’s what the co-op housing, the rental housing co-operative market is based on. What we see in Europe, we’re up to 25 per cent. 30 per cent of all housing stock is co-op housing. In Australia, it’s less than 1 per cent.

Tegan Taylor
We don’t, as you say, we don’t have much of it here. And so we, perhaps it is unfamiliar, we sometimes fear what we don’t know. Is there political appetite to change this?

Liz Thomas
We’ve been really encouraged by the support of the Federal Housing Minister, Minister O’Neill and together with the Treasurer Jim Chalmers recently visited one of our housing co-ops in Victoria and met with the co-op Housing Board and listened to the lived experience and firsthand experience of people living in co-ops.

I think there’s an interest Is there an appetite? I would hope that interest ultimately converts to appetite and we’re able to utilise the opportunity of the Housing Australia Future fund to get a dedicated fund of stream, dedicated funding stream to increase the supply of co-op housing because without that we just can’t meet the demand.

There are people like Kylie, there are people all over Australia who want an alternative to private rental, who have chosen or been denied home ownership. And we just need to start looking at what are the alternatives, what can we offer and funding those alternatives.

We know that housing co-ops generally, our largest housing co-op in Victoria is just over 100 units. Kylie lives in what we call a scatter site co-op. So the co-ops are over a close geographical radius but the properties are independent. And we have other co-ops. I was visiting our co-ops in Bairnsdale last week where they are properties scattered through the township.

So there are so many options for us to look at. But we do need to increase the supply so we can meet the demand. And at the moment we need people to understand more about co-op housing so they can join our call for federal and state government support to develop more housing co-ops.

That $200, $250 million a year over next three years will allow us to establish up to 25 new co-ops a year and develop that proof of concept. Ideally, we want to see this model mainstreamed through other housing providers.

The model we use is a federated co-op model where the community housing provider head leases the properties in perpetuity to the co-op. The co-op then selects the tenants that live in the properties. They pay 55 per cent of the rent collected to CEHL, who then manages the compliance of the properties the negotiation of the insurance, the capital work. So, it’s a really great model that empowers people to manage their own housing, but still to have that safety net of compliance and capital works and funding applications delivered by a professional housing organisation.

Tegan Taylor
Kylie, I do want to finish with you. Knowing, hearing this conversation, knowing that rental co-ops only make up that 1% of social housing in Australia, how does that sit with you?

Kylie
I feel like that’s absolutely what it is. I would love for this to be a lot more accessible to more people. I just wish it was sort of part of the conversation that it wasn’t such a, what sometimes feels like a bit of a secret society, because it’s not at all. It’s is absolutely an option for many people and I would like to think that, you know, with increased funding or whatever, that this is something that more people can really consider and not have to live in that horrible, stressful situation of private rental, which, you know, some people don’t care, but for sure, there are lots of people who really do struggle with that and they don’t know how to get out of it. So, yeah, I would really love for this to be a lot more mainstream than it currently is.

Tegan Taylor
Kylie, thanks so much for sharing your experience.

Kylie
Thanks, Tegan.

Tegan Taylor
Thanks also, Liz Thomas, head of the Australian Co-operative Housing Alliance.

Liz Thomas
Thank you.

Tegan Taylor
And you also heard from Professor Wendy Stone from Swinburne University of Technology. Thank you for your texts as well on the text line. “I was lucky enough to get a house in a co-op over 30 years ago when I was pregnant with my second child and having just experienced a breakup with my partner. It’s caring, secure and affordable. I still live in my home and it is now just as important as I’ve retired. I’ve never been in a position to be able to buy a house, so I feel very blessed to have this model of housing available to me.” You’re listening to Life Matters on Radio National.