NFP Real Estate Agency to Drive Sydney’s Affordable Housing Supply
Wednesday, 11th April 2018 at 5:34 pm
A new not-for-profit real estate agency has been launched to drive investment in and supply of affordable housing in the “most difficult housing market in Australia”.
HomeGround Real Estate Sydney (HomeGround Sydney), is a spin-off of the successful HomeGround real estate social enterprise founded by Launch Housing in Victoria four years ago, and marks the first interstate franchise for the model.
It was launched by community housing provider Bridge Housing on Wednesday and has already signed up more than 14 properties.
Bridge Housing CEO John Nicolades told Pro Bono News housing affordability was a huge issue in Sydney, and he was excited to launch HomeGround after a long period of preplanning.
“With fewer than 1 per cent of private rental homes in greater Sydney affordable for people on low incomes and homelessness growing at the rate of 27 per cent per year, this initiative is sorely needed,” Nicolades said.
“It will help the 60,000 people who are on our social housing waiting lists and the 150,000 low and moderate income households in Sydney who are in some degree of rental stress, that is, paying more than 30 per cent of their income. And this is just now.
“If you imagine that Sydney’s population is going to grow over the next 20 years, this issue of affordability for both low income households and moderate income households is not going to go away. This is not a dip in a economic cycle but this is now a very structural issue in Australia’s housing market and people on low incomes are suffering because of it.”
More than $300,000 in financial and in-kind sponsorship has been provided to HomeGround Sydney, with the City of Sydney investing $100,000 to encourage more affordable housing supply in inner city areas.
City of Sydney Lord Mayor Clover Moore, who launched the initiative alongside Nicolades, said it was bringing a creative approach to solving an urgent problem.
“Affordable housing is a problem for all Australians – and for the most vulnerable in our society, it has become an urgent issue that can lead to homelessness, inter-generational poverty and social dysfunction,” Moore said.
“We are proud to support this new initiative which brings a creative approach to solving this urgent problem – working with landlords to help increase the supply of affordable rental housing in the inner city.”
Sydney’s Lord Mayor Clover Moore launching HomeGround Real Estate Sydney. Very pleased to see this! pic.twitter.com/Kcg8roThGP
— Heather Holst (@HeatherHolst) April 11, 2018
HomeGround Sydney offers three models for property owners and investors to help end homelessness.
The first is for property owners to list their properties with HomeGround Sydney at market rents, with HomeGround Sydney reinvesting its management fee profits back into more affordable housing.
The second is for property owners to offer their properties at below market rents to directly support people into affordable housing.
The third is for owners to donate the use of their properties without seeking an income return on their investment.
Nicolades said the aim was to build on what Bridge Housing has been doing for the past 30 years.
“A big mainstay of our housing program has been leasing properties from the private rental market,” he said.
“Looking at Launch’s example, we thought how could we use all of that embedded experience and focus that in a way that would try and attract more properties in the private rental market for the affordable housing market. So that was the impetus.
“We’re off to a fairly good start, we’ve already signed up more than 14 properties and that’s a mix of properties that will be targeted to people within the affordable housing market, at a discount of 25 per cent to the market rent, and then the other half of those properties are market rent properties where the owner or the developer on that sites will allow Bridge Housing to manage that portfolio.”
He said from the perspective of the property owners, HomeGround would manage those properties as any private real estate agent would.
“So what people will see will be no different from what they get in a sense of service delivery than what they get from a private real estate agent,” he said.
“But of course being a social venture of Bridge Housing, whatever profit we make will be returned to our purpose which is to develop more social and affordable housing.”
Launch Housing deputy CEO Heather Holst said they were “thrilled” to see the launch of HomeGround Sydney.
“We are thrilled to have Bridge Housing as our first interstate franchisee of the HomeGround brand and for them to take this effective, proven model for creating more affordable housing into the biggest and most difficult housing market in Australia,” Holst said.
Nicolades said it was going to be an “interesting test” to see how Sydney compared to Melbourne.
“We have to see this as what I would call a start up. It’s a bit of an experiment to see whether we’re going to be able to attract enough properties and then create the revenue to enable HomeGround to break even,” he said.
“Like any start up, we’ve got our initial investors, [and] Sydney City Council to their credit has put in $100,000, plus we’ve got a private philanthropist who’s put in nearly $200,000 which will help us as in any start up. But what we’re doing is really testing the market.
“The other thing it will do is help us hone our skills and build upon what we are already doing in the private rental market.”
Bridge Housing is one of the largest leasing landlords in Australia with 600 properties leased from the private rental market to people on very low incomes.
“For which we receive a subsidy from government,” Nicolades said.
“That subsidy is not going to increase so this is really a new way of trying to attract more properties.
“The real issue is going to be if we’re going to do a Melbourne/Sydney competition thing to see who has got the most philanthropic landlords in Australia.”