3rd Response to the inquiry into housing affordability and supply in Australia
Housing Inquiry response – Social and Affordable Housing
“Homelessness and livelihoods affected by the lack of adequate and affordable housing, demonstrating the necessity of appropriate, secure, accessible and affordable housing for healthy and prosperous individual, families, communities and societies.”
There is a crisis in social and affordable housing that stems from the escalation of rental charges and house prices, that derive from a shortage in housing. Occubuy can deliver a low-cost, long-term housing solution to a larger cohort in the hope we can remove the bad stigma in some communities associated with social and affordable housing. How can we do this?
The inquiry mentions several options. Rent-to-own, shared equity schemes, and the role of private investment present key opportunities for a section of the Australian community including some of Australia’s essential workers, to have greater access to affordable rental housing and enter homeownership, where they would not be able to otherwise.
Occubuy is not a safety net! It’s the idea that those on lower incomes can still aspire to great things, the Great Australian way. These are the foundations that the housing system and in turn Australia is built upon.
We will use data and develop algorithms to set rents in proportion to incomes and create a diversified portfolio to allow for a sustainable business model. Consistency and quality of the data are important and will help with decision-making. We want to provide these data frameworks to improve the sector.
We would like to collaborate with Government Housing bodies, to investigate opportunities for attracting greater private-sector investment in social and affordable housing, including from superannuation funds.
Rent-to-own housing models will assist cohorts in the Australian community to enter into homeownership where they may otherwise not be able to expand the support for social and affordable housing.
The model incentivizes rent payment and assists people on lower incomes who would otherwise be locked out of market housing for reasons of economic disadvantage.
Offering a reduced rent for a minimum of 2 years, the tenant has the option to purchase the dwelling at market price and if the tenants do not want to buy, they receive their equity portion back minus any costs incurred by the landlord. The landlord would retain the property as rented housing (in the affordable sector) under the Occubuy process or would sell it in the open market to purchase or develop additional affordable dwellings in the market.
Occubuy will partner with developers and financiers to look at creative ways to provide working-class and middle-class Australians with affordable, decent housing, in proximity to their workplaces and communities. Providing the technology to those looking to undertake build-to-rent-to-own projects is critical to this sector’s success, plus it’s a key business model for success and sustainable ‘incentives’ for all parties involved. This means incorporating essential works and lower-income families as a proportion of all developments.
As Scott Langford of St George Community Housing stated in the inquiry, models that support homeownership are incredibly important. Homeownership is so central to our way of being in Australia and a sense of investment in the social and economic fabric of the community. Occubuy will ensure there are pathways allowing lower-income societies to aspire to something more than just ‘long term renting.’
What is critical is that while tenants are provided a reduced rent and the ability to build up equity in the home, it is important to reduce housing costs to allow additional extra savings. How can this be done? Occubuy will need to partner with service providers to ensure tenants are reducing living costs and are benefitting through spending with specific providers (cash returns etc).
The latest growing group who are suffering most acutely from the housing affordability situation in Australia are those people sitting around and below-median household incomes. By extension of that, those most affected are those employed in essential and frontline services (AKA essential workers). Improve affordability by reducing deposit and ongoing housing costs.
Occubuy is trying to avoid increasing buying power and in turn, increasing house prices through our scheme. We are looking to stabilize the property market rather than shock it.
Collaborative housing models are the answer to this crisis.
There has been a lot of discussion around housing being presented as either a human right or an important investment. That it can’t be one or the same. Occubuy has developed a model where the tenant is provided both, as they are not competing with the landlord. This collaboration results in all stakeholders’ benefit.