Election 2025: The housing crisis and the case for co-operatives

29 April 2025

BCCM CEO Melina Morrison was interviewed by Deb Knight on Money News, 28 April 2025, where she discusses the upcoming election, the housing crisis and co-op rental solutions.

Listen on the 2GB website (from 30 mins)

Link

Transcript

Deborah Knight

So we’re in the final election stretch. Are we there yet? Are we there yet? Almost five days to go and many voters, particularly younger Australians, will make their choice based on who has the best plan to fix the housing crisis, because it is a crisis. The great Australian dream of home ownership is pretty much out of reach, which is why build to rent has been growing in popularity. Now 22% of community housing in Europe already is made up of build to rent places. And co-op properties are a possible way for those who can’t afford to buy to instead get some long term tenancy. How would it actually work here, though? Melina Morrison is the CEO of the Business Council of Co-operatives and Mutuals. She joins me now. Melina, welcome to Money News. So home ownership is further and further from the reach of many Australians. Is co-op housing the answer to bridge the gap?

Melina Morrison

Absolutely. We have to widen our idea about what is the great Aussie housing dream? What about the 30% of Australians that are renting? And that’s the potential lifelong option for more and more of us. And we believe all parties are falling pretty short in articulating what they can do for renters.

Deborah Knight

And how would the system that is already being adopted in great numbers in Europe work here?

Melina Morrison

Well, it’s been adopted here as well. It’s just here it’s 1% of the housing market and in Europe it’s up to 30%, as you said in your introduction. I mean, what Labour and the coalition are focused on is mainly lowering the barriers to owning a home, entry into the market, that’s great if you can get in there. And even what the Greens are saying about wanting caps on rental increases puts renters and investors at loggerheads, while having more people coming into the housing market with sort of cash incentives could fuel more housing inflation. What you get with this build to rent model is a way of renting like you own. So you have the benefits of owning your home, like permanent tenure, the right to stay in that home for your life or as long as you want to live there. And just like a strata body, you have owner rights, you have a say over the amenity of the building. These are all of the things that make rental a lifelong option and a viable and attractive one as it is across many of the great cities of Europe, like Zurich, like Copenhagen.

Deborah Knight

So landlords would be scratching their heads saying, well, what if I want to change my mind or I want to get access to the property for my own use? This sort of changes the picture where I suppose the weight of benefit has been towards investors, more towards renters in this country.

Melina Morrison

Well it fits with mainstream market rental as well. So it doesn’t disrupt the existing system. It increases the supply of this other type of housing where both the building and the rental management costs are delivered through non-profit organisations. So you develop the building in the first place through co-operative housing developers and then the rental management is delivered through the co-operative and that’s what gives people agency over their rental. This is a form of housing that’s going to be really great for key workers, lower income families, single parent families, older single women and people who are downsizing. Those groups can really benefit from co-op housing. So it’s not for everyone but it increases the diversity of housing options and we really need to see this in Australia we are very limited. We, we are either in the private market or private rental or we’re in community housing and we can see that there’s not enough supply in any of those markets.

Deborah Knight

So what sort of assistance will be needed from the government though to get it up and running?

Melina Morrison

Well we’re calling for an increase to at least 10% of all community housing that’s funded through schemes like Labor’s Housing Australia Future Fund (HAFF) or if the coalition wins government or there’s a minority government, whatever other funding measures are coming through government incentives, particularly into the non-profit housing development markets to increase the supply of co-operatively managed housing. So you have a much more active form of rental housing that’s going to encourage people who might really find themselves totally squeezed out of any other way of getting into housing. We do need to address the supply but we really need to have a form of rental housing that is long term, secure and as attractive and in the places near where people work. So it’s not always on the fringes of the metropolitan area. It’s got to be close to schools and hospitals, places where people have vigils. We need to incentivise different forms of rental housing.

Deborah Knight

Critics say that build to rent just lines the pockets of developers or it only targets the upper end of the market. How do we avoid those sort of mistakes?

Melina Morrison

You do need to incentivise these existing organisations in Australia for community housing developers through shared capital structures such as the HAFF fund to be able to build more community housing. It does need to be delivered by non- profit housing developers, and then the management of it is done in collaboration, in co-operation with the people who are residing in the housing. The renters get to act like owners through these co-operative management models which look a lot like strata, only better, because they are genuinely community controlled organisations. So renters organise the amenity of their housing and non-profit housing developers deliver high quality, well built, environmentally sustainable housing that is not made to profit shareholder driven models. It’s a non-profit model.

Deborah Knight

Paul, one of our listeners on the text line says this sounds like a bloody mess. He says how about we lower immigration and deal with foreign ownership and then rein in negative gearing. What’s your response?

Melina Morrison

Well there’s a whole lot of policies out there and this is another policy which is in the mix. We do have a lot of Australians which are here right now, essential workers who make our lives better every day, who are trying right now to find long term affordable rental housing close to where they work and they need their housing addressed and that needs to be developed in models that specifically incentivise those people to be able to live and work close by. We really need a whole range of policies. It’s not just caps on migration, and taxation changes are going to be highly contested for the future as we can see from this election. So why not incentivise and grow a model which is already delivering successfully for many renters across Australia. Want to increase the number of Australians that can actually.

Deborah Knight

And what Target? If it’s 1%, what’s the perfect target you’d aim for?

Melina Morrison

Well you know right now we’ve got in the UK and in Canada, billions of dollars have been poured into these sectors to incentivise the supply side, the building side. We are asking for a very modest rise from 1% of community housing that’s funded this way to 10%. And you know that’s the start that gets more diversity into the mix. It also takes some pressure off the private rental market so that people who are not as constrained around their income can get into the private market as well. It’s really two sides of, of the marketing more and renting more affordably.

Deborah Knight

We’ll see what sort of response it gets post from either party that wins on Saturday. Melina, thanks so much.