Housing affordability break through at national roundtable

24 February 2014

Australians locked out of the housing market could soon have a path to affordable housing ownership according to housing experts meeting at a national housing affordability roundtable in Melbourne today. The meeting will discuss an equity co-op proposal to reduce housing market entry costs by as much as 30 per cent and will establish a taskforce to bring the proposal forward.

John McInerney, a consultant with over 25 years experience developing affordable housing said: “An alternative, is for properties to be developed and owned by not for profit entities that will forgo the traditional developers’ margin and also bring the benefits of scale development, innovative designs, delivery expertise and increased shared usage of common facilities as demonstrated to some extent in strata titled subdivisions.”

“The owner of the property will then offer long term leases to an operating entity on a cost recovery rather than a profit driven basis and the operator will sell shares to individuals wanting to live in the complex.”

It is anticipated that the initial entry costs for a new dwelling can be reduced by 20-25 per cent of costs of standard like single dwelling purchases. This price could be reduced even further if land is available below market value through land trust or philanthropic mechanisms.

“The challenge is to develop an alternative form of ownership that will reduce the cost of entry and ongoing costs, yet retain most of the benefits of home ownership.”

Stephen Nash, Managing Director of Common Equity Housing Limited, a co-operative housing developer and co-host of the roundtable with the Business Council of Co-operatives and Mutuals, said: “We are keen to work with a taskforce of key business leaders and housing experts to create an equity co-op housing development. This will turn the housing dreams of many, into a reality.”

“We have done the modelling around the building costs. A typical entry cost could be around the $300,000 mark for a two bedroom unit.”

Mr Nash stressed that housing developed would be best practice in terms of architectural and environmental design and benchmarks. “CEHL is an award winning housing developer. This is not about cutting corners. It is about using co-operative models to make housing more affordable.”

Executing Briefing: Breaking through housing affordability ceiling