About Australia

Dolphin Community Managed Co-operative in Frankston Victoria, part of Common Equity Housing Ltd.

History

The earliest known housing cooperative in Australia was ‘Co-operative Home’ established in 1888 by the Melbourne Anarchist Club (Metcalf 2008).

Cooperative activity to support housing in Australia has predominantly been around enabling the purchase of individual homes through building societies and credit unions (Patmore 2022). This is consistent with Australia’s “particular approach to social welfare (which) meant that for many years wage protection was substituted for an effective housing policy” (Apps 2021). As a result, Australia has had a high rate of home ownership with dependence on private rental housing for non-owners.

Significant investment in rental housing cooperatives occurred in the 1980s and 1990s through the Commonwealth-State Housing Agreement’s (CSHA) Community Housing Program, which had funds tied to housing cooperative development. This initiative of the then Minister for Urban Development, the Honorable Tom Uren, established a rental housing coop sector which now makes up the majority of the Australian housing cooperative sector. In these coops the properties are usually held by the government or in a common equity pty ltd company and the housing cooperative manages the tenancies. In some cases, the properties are held by the coop, but in all cases, the members have no, or only nominal, equity in the assets.

The remainder of the housing cooperative sector is housing operated by Aboriginal cooperatives or Aboriginal community-controlled organizations; and private equity housing cooperatives. Aboriginal housing makes up over a quarter of the housing coop stock and was largely formed in the 1970s. Private equity housing coops are mostly rural and are the smallest sector.

Tied funding for rental housing cooperatives ended in the 1990s and growth since then has been slow.

In 2012 the Australian and most state and territory governments introduced the National Regulatory System for Community Housing. Community Housing includes publicly funded housing delivered by not-for-profit providers such as cooperatives, associations or companies. Victoria developed its own regulatory system. Housing organizations generally have to be registered Community Housing Providers to be eligible for government funding.

Some housing cooperatives became registered Community Housing Providers and others did not.

In Victoria, many of the housing cooperatives came together and formed Common Equity Housing Limited (CEHL), a company to resource and support the housing cooperatives, where the coops managed their housing and member tenancies while CEHL provides coops with technical expertise, program management, asset portfolio management and resourcing. The Program evolved to provide housing cooperative models at a larger scale and in apartment buildings. CEHL is a registered Community Housing Provider.

The model was replicated to various degrees in other states with Common Equity NSW, Common Equity Housing South Australia (CEHSA) and Co-operation Housing (WA).

Context

Except for the 12% of housing cooperatives which are funded by members’ private equity, most housing cooperatives in Australia have received funding from either a state or territory government or from the Australian government. They have funding agreements requiring rents to be affordable and many are registered as charities with GST exemptions. Being a charity requires the coop to charge rents that are less than 75% of the market rate.

Cooperative housing is distributed across Australia, with the majority in the most populous states – NSW and Victoria, and the remainder in the other states and territories.

Business Council of Co-operatives and Mutuals 2023 *numbers subject to change as research progresses

Description

The housing cooperative sector in Australia is made up of four types – common equity housing cooperatives, Aboriginal housing cooperatives, other rental housing coops and private equity housing cooperatives. Between them, they have over 8,000 units of housing.

The common equity housing coops make up about 35% of the sector. They are rental housing cooperatives where the ownership of the housing resides with a common equity company whose shareholders include member housing coops. These housing coops are generally funded through government programs for affordable housing and the housing may be purpose-built or be existing housing that is bought or transferred. The common equity company may hold title to the properties outright, or titles constrained with a government mortgage, or the property may be owned by the government and leased to the common equity company.

The common equity companies lease houses or apartments to their member housing cooperatives who in turn rent them to their members. The common equity companies also provide services to the cooperatives such as maintenance management, governance support and training. Cooperatives provide the day-to-day management of the housing and to varying degrees, management of tenancies. The arrangements vary between states and depend on which program the housing was funded under.

The Aboriginal housing cooperatives or community-controlled organizations make up 36% of the sector. They were largely formed in the 1970s when most of the broader Aboriginal and Torres Strait Islander cooperative sector was also formed.

Other rental housing cooperatives make up 17% of the sector. These are largely urban and suburban and include a couple of student cooperatives. These coops vary in size from 400 houses to five. They operate individually as entities, and like the common equity rental cooperatives, are largely government funded.

In all the rental cooperatives, the housing belongs to either the cooperative, the common equity company or the government. The member does not have individual equity, and the cooperatives are non-distributing (non-profit). Many housing cooperative members who receive government benefits also receive rent assistance which is a form of subsidy from the federal government to rental housing providers (except government-owned public housing).

Private equity housing cooperatives make up 12% of the sector. These cooperatives are often rural, with the first one formed in 1970. The land is held in common and ownership is of the individual dwelling and a share of the common property, usually using either community title or strata title. Although fees may be paid for the costs associated with common property, rent is not paid to the cooperative.

Cohousing Co-operative in Tasmania/lutruwita cohousing.coop

Financing

Financial assistance provided to housing cooperatives varies according to different government programs. For example, the Victorian government’s Big Housing Build program has funded the construction of housing for a number of housing cooperatives in Victoria.

Ongoing government support for housing cooperatives is also received through commonwealth rent assistance (CRA) paid to recipients of government benefits to subsidize rents.

Currently (2023), no government programs are targeted specifically at the development of new housing cooperatives. There has been some growth of housing cooperatives, particularly in the state of Victoria where the state government has heavily invested in affordable housing in recent years.

Legal Framework

The legal instruments for the coop housing sector in Australia are:

• The Co-operative National Law and the various state Co-operative Acts: these acts determine the cooperatives’ organizational rules and generally govern their conduct as cooperatives.
• The National Regulatory System for Community Housing applies to all of the social housing cooperatives, with the Victorian and West Australian equivalents applying in those jurisdictions.
• Tenant legislation acts apply to rental housing cooperatives.

The Cooperative Housing Movement

The Australian cooperative housing movement consists of housing cooperatives, the people who live and work in them and the organizations and individuals that support and serve them.

Funding for housing cooperatives in Australia in the 1980s included establishing resourcing and development bodies in each state. These organizations either no longer exist or have evolved into Common Equity companies.

The Australian Co-operative Housing Alliance (ACHA) is an informal affiliation of the four common equity companies in addition to a representative from the other rental cooperatives in Victoria. All ACHA members are members of the Business Council of Co-operatives and Mutuals who provide Secretariat support to ACHA and jointly lead national work to support the development of housing cooperatives.

References

Apps, A (2021) ‘Housing the ‘missing middle’ — The Limited Equity Housing Co-operative as an intermediate tenure solution for Australia’s growing renter class’ Australian Property Law Journal

Metcalf, B (2008) ‘The Encyclopedia of Australian Utopian Communalism’, Arena, 31, pp. 47

Patmore, G (2022) Housing Co-operatives in Australia, University of Sydney, unpublished

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