@Home - Why are Co-ops Largely MIA in Australia?
Australia’s affordable housing landscape has been deteriorating for decades, starkly contrasting with the progressive approaches seen in Europe, especially in the realm of housing co-operatives. While co-ops in Australia make up a meagre 0.1% of housing, in parts of Europe, co-ops constitute around 20%, offering dignified and affordable living solutions. In Australia, however, affordable housing options are rapidly disappearing, as older, low-rise apartments are being replaced by luxury high-rises, catering primarily to wealthy buyers or first-time homebuyers with dual incomes.
In the 1980s and 90s, the Federal Government’s Local Government and Community Housing Program (LGCHP) led to the creation of approximately 160 housing co-ops, which collectively offered around 2,750 homes. However, after the 1990s, new initiatives dwindled, even as experts urged the government to prioritize affordable housing, particularly for aging Baby Boomers.
Over time, the situation worsened. Public housing funds were cut, and financial resources were diverted toward homeownership incentives. Support for co-operatives, a once-promising solution, all but disappeared. With public housing stock transferred to the private sector and limited investment in social housing, affordable homes became a scarce resource, particularly for older Australians.
Australia’s housing crisis has since reached a tipping point. Rising housing costs and stagnating wages have pushed homeownership beyond the reach of many, particularly women experiencing ‘Grey Divorce’ or fleeing domestic violence. Lawyers took their share of the equity during divorce settlements, leaving many middle-class women without a secure place to live, struggling to avoid poverty.
Even as the government has made moves to address the crisis—such as the establishment of Housing Australia, the multi-billion-dollar Housing Australia Future Fund, and state initiatives like Victoria’s Big Housing Build—the impact has been minimal. Affordable housing remains elusive, with older women being particularly vulnerable. While first-home buyers have been the primary focus of housing reform, older Australians are presumed to have paid off their mortgages or inherited homes. The reality however is that many older women find themselves without a permanent residence due to life circumstances, including divorce and financial hardship.
So, where does the housing co-op model fit in? While current housing policies do little to include co-ops as part of the solution, Europe offers a compelling example of what could be achieved. Cities like Copenhagen, Vienna, and Zurich have long embraced housing co-operatives and co-housing communities. These are not just viable housing solutions; they also ensure a high quality of life for residents.
The model prioritizes community involvement, sustainability, and affordability. In Europe, co-op financing is supported by government representatives, resource groups, and banks that specialize in financing for co-operatives. Co-op members in these countries often enjoy secure housing arrangements that foster community engagement and support aging in place.
The success of co-housing in Europe can be attributed to the collaborative efforts of governments, financiers, and community organizations. These groups work together to create sustainable, affordable housing solutions that benefit not only the residents but also society at large. A typical European co-op begins with a small group of households and grows to include thousands of households across multiple estates. These estates typically feature a range of housing options, including low-rise flats and townhouses, along with communal spaces like gardens, dining areas, libraries, and laundry facilities.
European co-ops also prioritize fairness. Residents are often required to move to smaller apartments if their families shrink, freeing up space for larger families. Membership contributions help fund the co-op, and rents are set based on the size of the apartment, ensuring affordability for all. Low-income residents can often access government income support, while temporary financial hardships are mitigated by the co-op’s solidarity fund.
The benefits of co-operative housing extend beyond financial savings. In Europe, co-op residents feel a strong sense of security, community, and empowerment. The stable rents, generally 20% lower than market rates, coupled with a community-focused living environment, make co-ops an attractive alternative to traditional rental markets, which are often volatile and insecure.
The Australian housing system could adopt many of these European practices. Establishing a robust network of co-operatives could provide secure, affordable housing for low- and middle-income households while fostering social diversity and financial sustainability. However, the challenge lies in garnering political will. Successive Australian governments have focused on mainstream social housing and private homeownership, largely ignoring the potential of housing co-ops.
Fortunately, there are organizations working to change this. Groups like Common Equity NSW, Co-operation Housing WA, and the Australian Co-operative Housing Alliance have been tirelessly advocating for the expansion of co-ops in Australia. Their efforts are supported by research showing the social, financial, and health benefits of co-op housing.
As Australia grapples with its housing crisis, co-operatives offer a promising, proven model for long-term, affordable housing. While there are glimmers of hope—such as new research and investment in innovative housing models—Australia still has a long way to go.
Co-operative housing could be a viable, scalable solution, but it will require collaboration between governments, financial institutions, and communities. Whether this change will happen remains uncertain, but the potential is undeniable. If Australia is to truly address its housing crisis, then co-operatives must be part of the conversation.
