Australia urged to adopt European-style co-op housing to solve rental crisis

The Federal Government is being asked to explore co-operative housing models widely used in Europe as a key solution to Australia’s worsening rental affordability crisis.

A report released today by the Business Council for Co-operatives and Mutuals (BCCM) highlights the success of co-operative housing schemes across Europe and recommends their adoption in Australia to increase the supply of affordable housing.

“There is no doubt that affordable housing is in crisis,” said BCCM CEO Melina Morrison. “We need new strategies that recognize that the traditional private rental investment model alone cannot provide housing for all Australians in need.”

The report, prepared ahead of the launch of BCCM’s National Affordable Housing Strategy, calls for a range of measures, including a mandatory allocation of a proportion of co-operative rental housing projects, with the aim of achieving a 10% share of public housing. and creating dedicated funding for co-ops through the Housing Affordability Future Fund (HAFF).

Commenting on the report’s recommendations, Real Estate Institute of Australia (REIA) president Lynne Pilkington said: “I would say everyone agrees that lack of supply is driving the housing crisis, so anything that could have a positive impact on supply should be investigated. thoroughly.”

Cooperative housing models, popular in European cities such as Copenhagen, Vienna and Zurich, account for 20%, 21% and 18% of the total housing stock in these areas respectively. By comparison, co-op housing makes up just 0.5% of Australia’s total housing stock.

The report highlights that with the right legislative support and funding, Australia could develop its own co-operative housing sector to help address the twin challenges of housing supply and affordability.

Liz Thomas, managing director of Common Equity Housing Ltd (CEHL), Australia’s largest co-operative housing developer, highlighted the growth potential.

“We have 140 ready-to-let properties that we could bring into service with HAFF funding earmarked for co-operative housing. By funding the growth of co-op housing, the Government is not only addressing housing supply and affordability, but also ensuring fair rents and the opportunity for tenants to have a say in the management of their housing and security of tenure,” Ms Thomas said.

The report also calls for a review of HAFF guidelines to include dedicated funding for affordable rental co-ops and a review of financial rules to unlock non-bank financing for housing co-ops and community land trusts.

The BCCM report notes that Australia’s current focus on investor-driven build and rent models may be overlooking the long-term affordability benefits offered by co-operative housing.

“In Europe, strict requirements ensure that only non-profit or profit-constrained developers can build affordable housing, building at cost to keep rents affordable,” the report said.