Australia: Homes build homes
|Homes Build Homes is a new pioneering initiative in Australia where homeowners agree to donate 0.1% of the sale price of their home to the cause.
By Fiona Crawford
More than 120,000 people are homeless in Australia. There’s a shortfall of 600,000 affordable and social housing units. Compounding factors such as a rising cost of living mean that more than 1.5 million households are living with housing stress. But a new national initiative called Homes for Homes promises a practical and cost-effective solution...
Australia’s homelessness figures are overwhelming and comparable worldwide. As noted by Homes for Homes (an arm of The Big Issue Australia), homelessness and housing shortages are challenges “too big for any one person, business or government to solve alone.”
With that in mind, and inspired by a similar model in the USA, Homes for Homes has taken a novel approach to address the special needs of Australia—one that brings together developers and the community in ways never witnessed before.
What is it?
The premise is simple – and the issue is solvable. Homeowners agree to donate 0.1% of the sale price of their home to Homes for Homes. They then use that money to help fund building homes for people experiencing, or at risk of, homelessness. The donation is only paid out when a property is sold, and homeowners can opt in or out at any time. The model is also affordable: 0.1% of a A$750,000 house sale translates to a nominal A$750, which is not only less than the legal fees but also tax deductible. So, it’s feelgood and financially savyy too.
The offer also extends to commercial leases, retail outlets, warehouses, and factories. People renting can also contribute 0.1% of their monthly rent – also tax deductible and accessible to all—not just wealthy ‘boomers’ who have profited from increased property values in recent years.
How does it work?
Donations from each property sale are added to the Home for Homes pool of funds. When there are sufficient funds, Homes for Homes dispenses grants that help experienced partner developers complete socially sustainable housing projects. Homes for Homes CEO Tracy Longo says that the grants are comparatively modest in terms of the size and scale required to provide adequate housing, but also thinks they’re “incredibly strategic and impactful.”
Longo explains: “What we learned really quickly is that the funds that we grant are being used for projects to become viable. They’re being leveraged to unlock other funding. A lot of the funding is being used for equity, so if they can obtain an equity component to make a project viable, they can unlock traditional capital. As soon as they can unlock that traditional capital, they can get that project up and running.”
Based on Homes for Homes’ calculations, every A$1 donated translates into an additional A$8 in traditional funding. That means the organisation’s target A$1 billion investment will translate into A$8 billion of impact – their economic modelling is conservatively based on 3% of the Australian population embedding the Homes for Homes principle into their property sale.
“Three per cent is not a large number,” says Longo. “Could you imagine what it could look like if it was six per cent or 10 per cent?” Longo says that sustainability has been the primary focus in recent years as environmental issues have been front of mind. But with housing shortages, cost of living increases and a changing demographic of people experiencing homelessness (including, for example, people who are considered ‘working homeless’ who are employed but who still cannot afford housing and/or women who are over 55 who experience homelessness after a marriage breakdown), government, industry and community are necessarily approaching housing development with a newly focused, social sustainability lens.
“It’s becoming mainstream, and that brings awareness,” says Longo, who believes that this new way of thinking also inspires new solutions, empowering the community to be a “practical, directly connected part of the solution,” just as the Homes for Homes model aims to achieve.
“It’s about the entire community coming together,” Longo says. ‘“It’s bringing new money to the market that didn’t exist and can’t exist. It’s not government money. It’s not private money. It’s just individuals who want to make a difference.”
‘It’s like any new initiative. It does take effort,’ Longo says. ‘But it is worth the effort. You need to become completely resilient. You just need to keep knocking on people’s doors and telling them, we’re not going away because this issue isn’t going away, we believe in the model and we know that it works.”
As Longo also notes, we have the option of sitting back and expecting someone else to solve the wicked problem of homelessness. But that isn’t helpful or sustainable: “A really healthy community says it’s our problem – and we all need to do something. What helped Homes for Homes establish its credibility was quickly proving its concept and viability by completing a full cycle of sign-up to sale to grant-funding smoothly. “As soon as you can prove something,” Longo explains, “it obviously changes the dial because it takes away some of the anxiety and the angst that people might have about participating.”
According to Longo, getting the community directly involved has three main effects: the Homes for Homes funding alleviates some of the load from government, injecting funds into and creating jobs in the building sector, while also providing people with a tax-effective way to benefit themselves and the community.
At a purely pragmatic level, this approach is also cheaper – society spends A$44,000 annually to support a person without proper housing, while it spends only A$1,800 a year for someone with secure housing. Outcomes To date, Homes for Homes has funded 22 projects, providing housing for more than 300 people who otherwise would not have been able to access safe and secure housing.
One project provides housing for people who have been released from prison and who would otherwise struggle to obtain housing because they have a criminal record. It also helps prevent re-offending. Another project provides a transitional space for First Nations women who have left unsafe homes. Both of these projects recognise that homelessness is about more than housing. As Homes for Homes identifies, insecure accommodation affects physical and mental health, as well as school attendance and employment prospects, resulting in adverse outcomes and greater welfare dependence.
Longo highlights another project that provides housing for women who are drug- or alcohol dependent who have also had a baby and who may under other circumstances have had their baby taken into care. Homes for Homes has been able to help deliver housing with wraparound support, provided in partnership with a local women’s hospital. This human-centered, trauma informed approach provides women and children with safe, stable accommodation and the resources to help break cycles of addiction.
So could the Homes for Homes model be applied in other countries?
Longo says yes: “It’s like any new initiative. It does take effort,’ Longo says. ‘But it is worth the effort. You need to become completely resilient. You just need to keep knocking on people’s doors and telling them, we’re not going away because this issue isn’t going away, we believe in the model, and we know that it works.”
Words: Fiona Crawford