Swags with Walls

Sharing Social Business and Finance Models for Affordable Housing and Homelessness Solutions

July 2016

About QCOSS

The Queensland Council of Social Service (QCOSS) is the state-wide peak body representing the interests of individuals experiencing or at risk of experiencing poverty and disadvantage, and organisations working in the social and community service sector.

For more than 50 years, QCOSS has been a leading force for social change to build social and economic wellbeing for all. With members across the state, QCOSS supports a strong community service sector.

QCOSS, together with our members continues to play a crucial lobbying and advocacy role in a broad number of areas including:

sector capacity building and support homelessness and housing issues early intervention and prevention cost of living pressures including low income energy concessions and improved

consumer protections in the electricity, gas and water markets energy efficiency support for culturally and linguistically diverse people early childhood support for Aboriginal and Torres Strait Islander and culturally and

linguistically diverse peoples.

QCOSS is part of the national network of Councils of Social Service lending support and gaining essential insight to national and other state issues.

QCOSS is supported by the vice-regal patronage of His Excellency the Honourable Paul de Jersey AC, Governor of Queensland.

Lend your voice and your organisation’s voice to this vision by joining QCOSS. To join visit the QCOSS website (www.QCOSS.org.au).

© 2016 Queensland Council of Social Service Ltd. This publication is copyright. Non-profit groups have permission to reproduce part of this book as long as the original meaning is retained and proper credit is given to the Queensland Council of Social Service. All other persons and organisations wanting to reproduce material from this book should obtain permission from the publishers.

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IntroductionQCOSS Enabling Local Communities, SEFA, Community Sector Banking, Gold Coast Project for Homeless Youth, Project 4 Change and Weiss Industrial Workshop exploring alternative Housing and Homelessness Accommodation options.

The 6 July workshop was initiated under Action 1 of the Enabling Local Communities 20 April Workshop, Developing Community Enterprise wherein participants articulated a desire to investigate projects driven by community for community, that are non-competitive, avoid government funding, and provide accommodation with support sustainability.

The action group identified key and potential stakeholders including real estate agents, construction companies, investors, support groups, employment and education projects. Social enterprise lenders, community bankers, youth homelessness agency leaders, non-profit developers, and innovative rural and regional housing solution builders, generously donated their time, shared their expertise, and worked with Ipswich stakeholders to identify opportunities to link services and clients with socially driven independently financed housing options and approaches.

Ipswich City Councilor Wayne Wendt opened the event welcoming attendees.

The programSEFA Innovative Lending, Hanna Ebeling (Sydney) Social Enterprise Funding Australia provides loans to non-profit entities for initiatives supported by sound business plans. Loans are supplemental funding issues that complement organisational fund raising. SEFA provide non-financial supports and mentoring.

SEFA will lend to under-resourced Not for Profit (NFP) organisations with social, cultural or environmental objectives. Loans provided are extensions or supplements, not replacement loans. They also provide non-financial support and mentoring.

SEFA Provide Advice on funding social business models – without government funding / also lends against loans to provide working capital

Hanna provided an overview of hybrid social enterprise models in which non and for profit entities partner to produce outcomes.

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Expert Partnership Models in which NFPs partner with commercial business

And cross subsidising models in which for profit activities subsidise nonprofit v undertakings.

Hannah identified available funding and social enterprise approaches extant to Government such as.

o Capital stackingo Up-front capitalo Partnering with other groupso Co-housing / housing cooperatives (German building Group model)o 99-year-lease (Community Land Trust)o Sweat Equityo Mixed tenancy / mixed developmentso Shared equity schemeso NSW Government – Social Impact Bondso Big 4 banks often give a better deal on capital provisiono Habitat for Humanity – low cost housing through volunteers and corporates

building houses and contributing materials.o Other housing support groups – The Big Issue Australia, STREAT, Bread and

Butter, Barefoot Power, Mission Australia, The Benevolent Society, Thank You, Who Gives a Crap.

o Community Land Trust – 99 year lease a community on a very affordable rent

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A full suite of SEFA resources with links to resources for:

Social Entrepreneurship Social Business Models Organisational Toolkits Fundraising Investment Finance Pitching, and Accessing funding is available at

http://sefa.com.au/wp-content/uploads/2012/03/SEFA-Social-Enterprise-Tools-Resources.pdf

Full presentation here.

For more Information: Contact Hannah Ebeling at hanna.ebeling@sefa.com.au

Gold Coast Project for Homeless Youth Bonita Tyler,

Bill Hoyer House crisis accommodation provision using alternative funding streams and supports.

The Gold Coast Project for Homeless Youth provide, crisis, transitional, medium term, and share housing programs and mobile outreach support. Demand for services remains high with over 150 young people unable to receive services in 2015.

In response to unmet need GCPFHY commenced building Bill Hoyer House, a seven-bedroom crisis accommodation facility with independently raised funding, council relaxations, and corporate and construction contributions including:

Linking with Villa World (developer) in support of their Social Responsibility Program 80 contractors who contributed to building new BILL HEYER HOUSE crisis

accommodation with materials or labour Lions Club landscaping Extensive fund-raising includes, galas, cocktail parties, subbies intro night Public awareness raising through media, social media, networks.

As of 6 July approximately 80 percent of the construction cost had been raised or met through fundraising, philanthropic support, in kind contributions, and donations.

Full presentation here.

Community Sector Banking - Jim HardyBendigo Bank have developed a shared equity program that will allow low income earners to afford a traditional mortgage in a tri-partite agreement with the lender and community or government housing provider, which contributes equity covering deposit shortfalls or establishes mortgage eligibility. The equity free interest component is repaid as a percentage of value at sale or loan restructure.

The shared equity program provides an innovative finance solution for community housing providers that reduces housing stress for home owners and clears a path to home ownership. The program unlocks equity in existing assets and reduces rental maintenance costs through shared ownership agreements.

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A low income family earning $60,000 per year seeking to purchase a $250,000 house can afford loan repayments of $1020 per month with maximum borrowing capacity of $165,000 leaving a shortfall of $84,000. A government or non-government organisation takes out a no interest loan for the 34 per cent equity component with the family servicing the $165,000 debt. At an appreciated sale price of $350,000 the owner would receive $231,000 and the equity investor $119,000. If the property depreciates the balance above sale price plus costs is paid to the investor.

Purchasing the HouseFamily income is within the affordable housing guidelines

Single income family with salary of $60,000 In order to not be in ‘housing stress’ maximum spend on housing = 25 per cent of income $1,020 pm on mortgage payments Max borrowing capacity $165,500 Purchase price of property $250,000 Shortfall $84,500 Equity component: 34 per cent Individual/family owns: 66 per cent

Selling the house at a profit House bought for $250,000

Property sells for $350,000

Increased value of property $350,000

CHP receives 34 per cent = $119,000 (vs $84,500 originally)

Individual receives 66 per cent = $231,000 (vs $165,500 originally)

Selling the House at a LossHouse bought for $250,000

House sells for $200,000

Loan = $180,000 (including selling costs if a forced sale)

Balance of $20,000 goes to CHP/Gov’t.

Community Sector Banking are currently preparing the shared equity product for market.

Full presentation here.

For more information: Contact John Goodwin at john.goodwin@csbanking.com.au

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Swags with Walls WEISS Industrial (Wacol) presented their modular relocatable housing units. The modular unit’s feature includes:

Welded Steel Ladder Frame Skid Base Sustainably Harvested Australian Hardwood Timber Hardwood Timber Frame Traditional Construction Techniques Locally Made Materials VJ Plywood Internal Cladding Fully Insulated for comfort Hardwood Weatherboard Cladding

Cabins can be moved inexpensively on a flatbed truck, be powered via a heavy duty extension cord, connected to town water via a garden hose, and plumbed into existing sewer lines. Available configurations range in size from a single room with to fully modular four bedroom houses with optional verandas with prices ranging from $8,400 to $50,000. Homes can be fitted with full kitchens, TV or data points, lighting and plumbing and transported economically.

Full presentation here.

For more information: Further model and contact information is available at http://www.weiss-industrial.com/#!transportable-cabins/e44tu

Home Ground Real Estate Home Ground Real Estate Victoria is a Melbourne based not for profit property management and real estate agency that redirects its profits toward housing and homelessness programs as a subsidiary of Launch Housing Victoria. Home Ground manages a portfolio of over 235 properties sourced from private landlords and owners seeking an ethical investment option. Properties are leased at market, affordable, or crisis accommodation prices at the owner’s discretion.

RealEsate.Com, Mercy Foundation, The City of Yarra and the Lord Mayor’s trust contribute establishing and operational funding.

Key elements include:

Licensed Principal or Real Estate Agent Experienced Housing managers Industry standard risk management Public facing office Portfolio- either privately or publicly sourced

Full presentation here.

For more information: Contact the Project Manager, Belinda McCallum on belindam@homeground.org.au

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For more information: To see the Home Ground Promotional video go to https://www.youtube.com/watch?v=5cxMozK9-Ck

Project 4 ChangeProject4Change is a commercially viable public benevolent institution developing 21 shared equity homes in Leichardt. Project4 Change:

does not receive public or government funding, exists independent of political and economic policy, offers pathways to home ownership, disability and age appropriate housing, and

affordable rental options.

With ground now broken, the Project4Change Leichardt development will yield 15 three bedroom townhouses, two one bedroom properties accessible for older people, two adaptable units for people with severe disabilities, and two three-bedroom subsidised affordable rental properties. All units are free standing.

The Leichardt development features:

Adaptable units for disability and ageing (Physical and Intellectual) Standard Units to market (Owner occupiers and investment) Finance assisted deposits. (Low income earners) A mix of bedroom combinations and uses (3,2,1, universal and standard) Community space with herb gardens (Maintained by Body Corporate) Low rise, free standing construction (Light and air all around)

Project4Change utilises a finance assisted development scheme in association with

Community Sector Banking, Queensland Dept. of Housing and Public Works, and Community organisations.

The Program has a life of five years during which time:

There is a tripartite agreement between the parties Client gets capital gain and five years’ history with bank Revaluation and refinance happens at the end of five years At which time P4C exits the scheme.

Client deposits can range from $5,000 to $15,000.

Project4Change attracts ethical investment through its property development fund and is actively progressing developments in consultation with regional councils across Queensland.

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For more information: Visit the Project 4 Change website

Group Discussions Participants formed groups to discuss three key themes and identify areas for future action:

Rural Housing Solutions Social Enterprise Funding Shared Equity Programs

Below is a summary of each of the discussions. It is not intended to be a full recording of the discussions but capture the main points.

Rural Housing Solutions Southern Downs (Warwick - Stanthorpe)

Issues re back packers and temporary housing, for example – caravans. NFP wants to get into social enterprise affordable housing Build confidence through success stories Need for disability housing

o First stop to move out of home and be tenantso Purpose built affordable housing

Where is the land for housing?

Regional councilso need to partnero relaxations

Start conversations with regional councils and department of housingo crisis homeless solutionso transport Swags with Walls around region

Seasonal Workerso Councils and agencies (seasonal worker agencies)

Large property ownerso Make space available

Swags with walls in caravan parks?o and where else?o Some councils are barrier – land and building laws

ACTION: Don’t forget regional needs when you are creating working partners

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Shared Equity Issues with clients we service being considered for this space – often dealing with low

income/non-working singles or single parents Could work for public housing tenants who have stabilised their lives and have income

between $60k - $80k (just below cut off) Could be used for NDIS clients Cash component could be difficult (eg. 5% = $5k-$10k)

Peter Tully

o Because mother and aunty helped him he did not qualify for first home owner grant

o Need for educator and advocacy programo QDN and Qld Shelter project – housing conference – sharing experiences

NDIS – Potential for housing in near future Advocacy/lobby required re shared equity options for first home buyer’s grants Age group Identified – 20 to 30-year-old people with a disability want to move out –

independence – like others same age Reassurance for the carers/parents needed to support the person into independent living Well research program needed to identify ‘why people homeless’ and whether they want

to ‘own’ or ‘rent’ Working with local and state government – using existing relationships as a strong

starting point

SEFA: Community Loan Applications plan for return. Ask yourself right Q’s Person on disability goes to public housing Commercial/ventures when NDIS comes in – depending on community needs See potential for community providers Young people with disability getting a space for themselves so they are not in pensioner

home Huge need in market – need drivers to make this happen – understand where

organisation comes from Start with story – evolve the process Get complete narrative – use expression of interest form – how much to borrow What do you want to spend – rainy day scenario A lot of questions that people realise when they check – make a good partnership Give steps, information to setup NFPs for the loan Pre-sales – interest, units refined for social housing. Who can manage/maintenance. First

pilot to vete the people that go into house – see transaction with need for philanthropic funding – create verified partnership

Charge commercial rates: 6 per cent - secure property 12 per cent unsecure – no ___ repayment penalty. Want to help track record

How to exclude people to come off social housing Dispose the funds then refinance to manage own cash flow – 50 000 – 2million can do on

SEFA’s own Drivers Communication/channels open

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Shared Equity – in light of NDIS Opportunity for potentially three families may contribute to deposit and repayments to

create an opportunity for people with a disability to live independently Swag houses great opportunity for people with disabilities to live independently within the

gamily property. This would be ideal option for people that perhaps live rurally with limited options in accommodation available. Still allows to stay within their community, which is important to them

Accessing SEFA for funding or cofounding a house to be used for accommodation trials and independent living skills

How to progresso partnerships developedo discussions with councilo community forumso discussions with client groups.

Workshop Questions Inclusionary zoning

o How to get the picture out there to developers? Establish research

o Various models and the associated need Organisations

o Matching for successo Inclusion of smaller housing organisations.

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