Co-op housing is an affordable rental alternative

Key points
  • Cooperatives, consisting of members, own the right to a collection of homes, which are often in the same location.
  • Without a landlord making a profit, rents only need to cover the costs of maintaining the property.
  • Cooperative housing rent is more affordable than open market rent and can be set at a percentage of income.
Yvonne Jenkins doesn’t own the house she’s lived in for the past 24 years, but she’s not worried her rent will increase dramatically or she’ll have to move anytime soon.
At a time when there is a shortage of housing And for many people it is in some ways a cocoon of Australia’s housing crisis.

This is because she is part of a co-operative housing scheme.

Cooperatives as a business model

Cooperatives, consisting of members, have the right to a number of homes, which are often located together.

A co-operative is a business model, but according to Linda Seaborn, senior policy advisor at the Business Council of Co-operatives and Mutuals, they operate differently to most of the Australian property market.


Some co-op homes are co-located, while others may be a collection of homes spread across a suburb or area. Source: Delivered / Cohousing Cooperative

“A housing cooperative is made up of the people who live in the homes, but actual ownership of the property can vary,” Seaborn said.

“The members own the cooperative, but the cooperative may not own the houses. The cooperative can rent the houses from the government or from a social housing company, and then their members live in the houses or the cooperative. Op could jointly own the houses, or the cooperative could own the houses outright.”

According to Western Sydney University, rental housing co-operatives make up just 0.03 percent of all housing in Australia and 3.43 percent of community housing in the country.

How much does cooperative renting cost?

Jenkins is part of Bellinger River and Neighborhood Cooperative Housing (BRANCH) in Bellingen, NSW, which consists of nine homes across the city.
She said buying a house was never a priority for her.
“I was a young person at a time when renting wasn’t a problem. We just rented, as if there were always enough housing available,” says the 81-year-old.
“I never thought it would be difficult and that renting as it is now would be incredibly expensive and difficult to find.”

Jenkins and her partner each pay 25 percent of their income as rent on their two-bedroom brick house, which she estimates works out to about $350 to $400 a week.

A woman and baby watch chickens in a chicken coop.

Each housing co-op looks different, but many have shared facilities such as gardens and communal areas. Source: Getty / Houston Chronicle

Seaborn said that while rent may be calculated differently depending on the co-op, the housing alternative provided below-market rent.

“In places like Melbourne and Sydney, this rent is around 90 per cent of market rent, and it is falling over time,” she said.
“Research in Europe, where something similar is being done, has shown that because the homes are managed at cost price – so there is no owner who makes a profit – it is only the costs of running the homes.

“Over time, your housing costs become lower and lower, relative to market rates, and become increasingly affordable.”

Seaborn said those co-ops, backed by government funding, had their own way of calculating rent.
“Those that have had government investments generally have a cap on rent, which is usually 75 to 80 percent of market rent,” she said.

“And often it is also a percentage of people’s income, so no more than 25 or 30 percent of their income.”

Active participation is required

Each housing cooperative has a board that is responsible for the proper functioning, including the maintenance of the buildings.

They require active participation from their members, and even those who do not hold board positions are expected to be part of policy and decision-making by attending meetings and staying informed on cooperative matters.

An overhead view of six people meeting around a table.

People must be members to live in cooperative housing and participate in decision-making about the maintenance and operation of the housing. Source: Delivered / Co-housing cooperative

One of the most important principles of cooperative housing is democratic member control, so that everyone has an equal voice on matters.

Members may also be required to spend time maintaining shared facilities and housing.

Part of a community

In addition to working in the sector, Seaborn is also part of a cooperative in Tasmania.

“The village where I live is actually designed as a co-housing village and we have a communal house with a laundry and guest apartment and a big kitchen, and we eat together a few times a week,” she said.

A blonde woman in a light pink sweater smiling at the camera.

Senior policy advisor Linda Seaborn from the Business Council of Co-operatives and Mutuals not only works in the co-operative housing sector, but also lives in a co-housing village. Source: Delivered

She has been a member of the co-op for 23 years and saw it as an affordable and safe housing option.

“I really liked the village aspect and the social side of it. I was a single mother [when I first moved in] “I had a child and it was a really good way for both of us to have more social contact,” Seaborn said.
Jenkins said the cooperative she is part of also often attracts single women and mothers.

She is the oldest person in her cooperative and the youngest is six years old.

An older woman and man.

Yvonne Jenkins and her partner each pay 25 percent of their income as rent for their home. Source: Delivered

A report published earlier this year by Western Sydney University found that co-operative housing provides affordable housing at a similar cost to other forms of community housing, as well as providing other social benefits.

Benefits of co-operative living included: a sense of security, a positive impact on mental health, a strong sense of community and well-being.

Jenkins said working toward a common goal requires a high level of respect among members.

“I just think it’s a very supportive way for people to live,” she said.

A ‘nest instead of a nest egg’

Seaborn said she believes the way Australia’s property market works does not serve the whole of society.
“We treat housing as an investment rather than a home and we allow people to become homeless because it is not profitable for someone else’s investment,” she said.

“What our housing system is generating right now shows us that there is something really wrong with it. I think it falls into the category of human rights violations.”

About 10 people gathered at the entrance of a multi-story apartment building.

Housing cooperatives can be found all over Australia. This is located in Erskinville, NSW. Source: Delivered / Co-housing cooperative

Treasurer Jim Chalmers has ruled out changes to real estate-related tax breaks. and the opposition has said the coalition will not support changes to these measures.

The 1980s and 1990s saw significant investment in rental housing co-operatives through the Community Housing Program of the Commonwealth-State Housing Agreement.
While states currently assume responsibility for housing matters, the federal government remains responsible for establishing policies that shape housing affordability.

SBS asked Julie Collins, Minister for Housing and Homelessness, about the possibilities for additional co-operative housing in Australia.

She said such initiatives “provide their members with both security of tenure and connection to the community,” but did not indicate whether the federal government would support state governments to provide and facilitate more of this type of housing.
She was referring to the government’s $32 billion Homes for Australia plan, which focuses on building more homes.

“This includes the $10 billion Housing Australia Future Fund, the largest investment in social and affordable housing in more than a decade, and the $2 billion Social Housing Accelerator.”

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