30 Years of Co-operative Housing

In 2016 CEHL celebrates 30 years of co-operative housing.

Watch Building on our strong foundations: a short history of the development of the CEHL Co-operative housing program and future vision.

CEHL - Building on Our Strong Foundations


Co-op Workshop 1985

Common Equity Housing is just as, if not more relevant today as it was in the early 1980's.

"A growing proportion of people across Australia find it increasingly difficult to afford housing that it safe, secure and appropriate to their needs. Added to the general decline in housing affordability, and indeed compounding the trend, the stock of affordable housing that is, housing appropriate to the needs of low- to moderate income households- has failed to keep pace with the demand in recent decades". The Senate Economics Reference Committee Out of reach? The Australian housing affordability challenge

A Brief History of the CEHL Co-Operative Program

Rental Housing Co-operatives in Victoria, and the seeds of the CERC Program, gathered momentum in the early 1980's when, faced with the gentrification of inner city suburbs and increasing social dislocation of lower income earners, small action groups in need of secure affordable housing got together to study possible courses of action.

Supported by key Federal MPs and local government, and inspired by the co-operative movement in Canada and Europe, these community groups met for information and idea swapping meetings starting in November 1983. A strategy for developing common equity rental co-operatives was developed in 1984, based on the Canadian and European models.

In the beginning there were 27 or so groups formed around geographical locations, all interested in housing co-operatives - there were many different personalities coming from different backgrounds, but they were all joined by their desire for affordable housing and their growing understanding and belief in the co-operative principles. These meetings were often charged with emotion, as people passionately expressed their opinions. Topics that were hotly debated included a rent setting system, ideological questions, and what shape the co-operatives should takes - for example, it was shown in Canada that the idea of co-location was predominant, meaning that houses belonging to one co-operative tended to be clustered together and centred around communal areas. However, many of the people at the meetings had concerns about this - while they wanted to share and work co-operatively in a group to achieve a common aim, they also liked their privacy!

One of the interesting points about these initials groups and meetings is that they were open to anyone interested - indeed, it was envisaged that anyone would be eligible to apply for co-op housing.

Throughout this, the groups received invaluable help from Housing Councils and local government in drafting and help to form submissions for the Registrar of Co-Operatives. The State Government provided crucial support in the form of initial funds and start up money - sixty-five per cent needed to purchase properties. The remainder was to be raised through the State Bank.

This split also meant that 65% of tenants had to meet the Office of Housing income eligibility and other criteria.

In 1985, four housing co-operatives were approved - Keilor, Broadmeadows, Geelong West and Werribee. A finance company was set up, Common Equity Housing Finance (CEHF) in 1986 to administer the funding and assist with the necessary reporting and accounting side, with each CERC entitled to become a shareholder in the Company. An architect/builder was also engaged to inspect the property and report on the possible need for renovations, and assist with the valuations. In these initial days, members were heavily involved in finding and choosing their own homes - they could search for one that met their requirements! Once they found a house, CEHF would negotiate the price.

The co-operative was then responsible for managing the property. After years of being unhoused members, the first CERC homes were bought in 1986 - by this time, the members had certainly received plenty of training around maintenance, the need for good budgeting and good meeting procedures!

At the same time, a central region resource co-operative was established, funded through the government. Staffed by people committed to seeing co-ops flourish, it assisted the CERCs with the daily management, provided guidance, and professional support such as qualified property officers. As other CERCs were established across Victoria, three other resource co-operatives were also founded, in 1989, Geelong, Bendigo and Morwell.

The resource co-operatives also worked with applicant groups to prepare letters of submission; groups would have to demonstrate that they could form a viable co-op, and provide thorough budgets and details on their ability to meet program targets. While having to work very hard themselves in order to pass all the hurdles required for registration, these latter co-ops benefited from a lot of the ground work done by the original CERCs, and it was common that established CERCs would assist other groups in forming. There was a strong sense of sharing and helping others, and that a new movement was taking off, and they were all in it together!

Over the course of time, the CERCs had to be adaptable and able to evolve to changing environments. Titles were originally held by the State - however, in early to mid nineties, change was in the wind. In 1997, the resource co-ops were defunded, as the government of the time deemed the co-operative program was no longer expanding; there was concern that the next step would be to stop funding the CERCs, and eventually close them down.

Negotiations were held, and it was agreed to transfer property titles to the newly created Common Equity Housing Ltd (CEHL), who from this point would not only be responsible for servicing the loans and managing financial contracts, but also act as program manager for the CERCs, providing a range of support services. New staff were hired (many from the old resource co-ops). As well, a compromise was reached that all future residents would need to meet the Office of Housing eligibility guidelines at the commencement of their tenancy.

Over time, as the CERC Program grew, so did the parent Company - the office in Richmond became too cramped, and a new, larger space with more breathing room was needed. In 2002 CEHL moved its head officeto Kew. After almost 8 years the office space once again became too cramped and during February 2010 head office moved to its current location, back in Richmond.

While the Program and CEHL has certainly grown - there were 170 houses by 1989; as of 2013, we have over 2000 - and evolved over the past two and a half decades, many things have remained the same - many of the founding members are still an integral part of the training and providing guidance to newer members; the principles of sharing, co-operation and supporting each other is vibrant and a defining feature of the CERCs; self management and control, combined with the overall objective of secure, safe and affordable housing for its members.*

Looking back over a Decade

The last decade has seen some major changes to both the CERC Program and to CEHL.  The program has expanded significantly and CEHL is more financially robust, more recognized in the broader community and a much more self confident outfit than it was in 2002.

The simple explanation for these improvements is that housing co-operatives work well. Housing co-operatives are a very effective and sound way to operate rental housing portfolios. Unfortunately, as social and affordable housing became more scarce through the 1990's and the 2000's the government response was to focus more on welfare models of affordable housing rather than self help models encapsulated in co-operative housing. Many people in the industry became critical of co-operative housing models as they considered they did not focus on the most ‘needy' people and by definition shifted a degree of responsibility and control to tenants of the housing thus challenging the more favoured welfare model of social housing. Many of those administering the social housing programs preferred to refer to tenants as their ‘clients' rather than tenants or members inferring that they needed to be subject to some sort of management to overcome their disadvantage rather than citizens entitled to a form of affordable and secure rental accommodation. This welfare approach to housing fails to recognize that the majority of low income people, once offered decent, affordable accommodation are willing to contribute to make sure their housing is well maintained and managed. The confidence, skills and self esteem that members develop operating their own housing organizations in co-operation with other members contributes to their abilities to achieve successes in other facets of their lives.

There have been many challenges and some significant successes over the last ten years. The Board of CEHL established an ambitious but achievable 3 yearly Strategic Plans that have continued to set clear directions for the organisation and co-operative programs. The Strategic Plans have been the cornerstone for the growth and consolidation of CEHL and its co-operative membership.

The challenges include the shift from the rent rebate model previously offered by the Office of Housing, to a new rent setting model that is based on the commonwealth rent assistance as the subsidy for those reliant on centrelink income. This change was the result of a lengthy negotiation with the state government where co-operative members were required to surrender their access to rental rebates in exchange for a substantial reduction in loans and the transfer of unencumbered titles to over 1400 properties to CEHL to improve the financial position and borrowing capacity of CEHL.

Another milestone was the introduction of the CERC/CEHL Agreement (CCA), an agreement that fully recognizes and documents the partnership between CERCs and their company, CEHL. The CCA captures the joint commitment between the parties to co-operative housing and articulates the responsibilities and service standards for both parties to the agreement. This document was introduced in 2007 and is currently undergoing a review of its effectiveness and to address some changes that have happened since its introduction.

CEHL were successful in obtaining additional capital funds through two government programs titled Social Housing Innovations program (SHIP) and also Building More Homes Together (BMHT) in the early 2000's. These funds were mainly used to construct two bedroom units designed for older members particularly those wishing to downsize from their family homes as children grew up and moved out. CEHL also entered a partnership arrangement with Doutta Galla Aged Services (DGAS) to develop Harmony Village independent living units in Shepparton. This was a landmark achievement for CEHL as the 60 unit development was delivered without any government funding and CEHL were able to effectively purchase 8 units from the surplus derived from the sale of the other units. DGAS used their share of the surplus to expand their nursing home on the site from 30 to 60 beds. This project not only achieved these outcomes but also established CEHL reputation as a successful property developer.

Following these projects CEHL was finally recognized and achieved registration as one of Victoria's Housing Associations in 2007 opening the way to access to new growth funds being offered to associations. The then Victorian government offered significant funding through its Growth strategy and CEHL were successful is receiving grant funds numerous projects including two large and very innovative projects being Harmony Village Dandenong and the Abbotsford project to construct 59 units in a mixed social and private development.

CEHL strategic plans continue to focus on both improving the operations of all member coops as well as expanding stock. Registration also increased the accountability of all housing providers and for the last 6 years CEHL and its member's co-operatives have received outstanding reports through the annual assessment conducted by the housing registrar. There have been significant improvements in the financial management and reporting by all coops, great outcomes in service delivery, continual improvements in the governance and management structures within CEHL and significant changes to the application and allocation systems across all co-operatives.

CEHL were fortunate to receive further grants and also strong support from the banks to raise further capital to construct over 250 new dwellings funded through the Rudd government stimulus package announced in 2009. These projects included further innovative cooperatives such as Canadian Place in Ballarat and Murandaka in Heidelberg plus many smaller clusters and detached housing to enable over 50 cooperatives to expand their housing portfolios. During these extremely busy years CEHL was able to welcome two new rental housing cooperatives being Carlton and Diamond Valley as new shareholders and further models of co-operative housing. CEHL also negotiated to purchase 3 complexes of independent living units from Southern Cross Care and transform them into managed cooperatives targeting older people.

There has also been many significant changes within CEHL; especially more focus on asset protection with rigorous inspection and documentation of the conditions of all properties. Third schedule (capital works) spending has been steadily increasing each year for the last decade and over 140 properties that were deemed to be unviable because of their condition or location have been sold and replaced with better quality stock.

Since 2010 there has been limited opportunities to apply for capital funds but CEHL but continues to consolidate with emphasis being on assisting all cooperatives but especially the more recently formed and the different co-operative models to become firmly established. More emphasis has been placed on member engagement as the recognized foundation to the success of the co-operative programs and improving training for all members.

In 2012 CEHL used the opportunity of the International Year of Co-Operatives to engage more widely with the broader co-operative movement in Australia and particularly with other housing co-operatives here in Victoria and interstate. CEHL hosted the National Co-Operative Housing Conference in Melbourne in March 2012 which was a great success and showcased co-operative housing to a much wider audience.

* Written with the gracious support and assistance of Millie Connelly and Kaye Lloyd, founding members of Keilor CERC