Returning empty homes to Melbourne’s rental market could be life changing

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HomeGround Real Estate, a division of Launch Housing, is calling on owners of empty properties in the municipality to return 1,000 homes to the rental market.

Despite the current housing affordability crisis, more than 7,000 homes in the City of Melbourne municipality remain empty according to City of Melbourne demographic data 2013*. Returning just 14 per cent, or 1,000 homes, to the rental market would make a big difference to the growing number of people who struggle to find an affordable home in Melbourne.

HomeGround Real Estate is a not-for-profit real estate agency run by Launch Housing, one of Melbourne’s largest providers of housing and homelessness services. The innovative social enterprise aims to increase the stock of affordable housing for clients throughout Melbourne, securing affordable properties for low income tenants, including women and children escaping family violence.

Launch Housing Deputy CEO Dr Heather Holst said property owners leave homes empty for a variety of reasons but listing the properties with HomeGround Real Estate could make a big difference.

“More and more people on lower incomes are at risk of homelessness due to the lack of affordable rental properties in Melbourne. If you have an empty property in the City of Melbourne municipality please talk to us about bringing it back on to the rental market. It could make a huge difference to someone’s life.

“The benefits are huge. People who have otherwise been priced out of the market are offered more affordable private rental, and HomeGround Real Estate offers landlords expert property and tenancy management services that give them peace of mind, the opportunity to contribute to those in need of housing, and a ‘social return’ on their negotiated, discounted rental fee.”

The City of Melbourne made a one-off grant of $150,000, from its $2 million Pathways Innovation Package, to HomeGround Real Estate to contribute to activities that will increase the number of rental properties that are available to people experiencing homelessness within the municipality.

*Data source City of Melbourne Small Demographic Profile Reports http://www.melbourne.vic.gov.au/about-melbourne/research-and-statistics/Pages/city-residents.aspx

ENDS

To arrange an interview or photo opportunity:

Please contact Dara Peskin, Marketing and Communications Lead Launch Housing 0419 347 114 or email Dara.KahnPeskin@launchhousing.org.au

Spokespeople available for interview are:

  • Launch Housing – Dr Heather Holst, Deputy CEO, Launch Housing
  • Landlord who has a listed property with HomeGround Real Estate
  • A current HomeGround Real Estate tenant

 

BACKGROUND/FAST FACTS

  • HomeGround Real Estate, a division of Launch Housing, is an innovative social enterprise aimed at increasing the stock of affordable housing for our clients throughout Melbourne.
  • It is a not-for-profit property and tenancy management business and real estate rental agency.
  • The unique model is a win-win for landlords and tenants alike:
    • People who have otherwise been priced out of the market are offered more affordable private rental.
    • HomeGround Real Estate offers landlords expert property and tenancy management services that give them peace of mind, the opportunity to contribute to those in need of housing, and a ‘social return’ on their property investment (a negotiated, discounted rental fee).
    • The difference between the market return and the discounted return may be tax deductible.
  • To date, HomeGround Real Estate has secured more than 300 affordable properties for low income tenants, including women and children escaping family violence.
  • What our landlords and tenants say:
    • “There was no reason to leave my previous real estate company – I was satisfied with the service. Choosing HomeGround Real Estate was a moral and ethical decision – I wanted to make my choice count.” —Stephen, landlord
    • “HomeGround Real Estate gave me the opportunity to move on with my life and rebuild. I had been homeless for over one year. My daughter and I slept on couches and in unsafe housing. I had left a violent and abusive home but didn’t have a rental history. Even though I was working and had owned my own home I couldn’t provide rental references so I wasn’t able to get ininto the private rental market.” —Rachel, tenant.
  • For more information visit:
    • com.au

ATO Ruling Information

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HomeGround Real Estate Landlord ATO Talking Points 2016

The following information is designed to assist property managers provide a quick and easy response to landlords enquiring about the ATO ruling for HomeGround Real Estate:

  • What is the ATO ruling?
    • The Australian Tax Office has made a class ruling (which means it is a legal ruling that applies to HomeGround Real Estate only) that allows landlords who list their property with us at a discounted rental rate (eg less than market rent) to claim the gap as a tax deduction at the end of financial year.
  • How does it work?
    • At the end of financial year we (HomeGround Real Estate) will provide you with all of the documents you need to do your tax return – including a tax deductable donation receipt for the amount of rent you have deducted to provide a more affordable property to a tenant or tenants. For example your property is worth $550 at market rent and you decide you only need $450 in rent and want to offer the property to a family in need. We will provide you with a donation receipt for $5200 (made up of the $100 per week in rent you have foregone) from Launch Housing (our parent organisation).
  • How does it benefit me?
    • The tax ruling is not designed as a financial incentive but it does recognise your contribution by allowing you to legitimately claim the gap between market rent and any discount you decide you can offer.
    • The main benefit is in the form of a social contribution simply by listing with HomeGround Real Estate. We are a social enterprise with Launch Housing – Launch Housing is one of Melbourne’s largest providers of services to people experiencing or at risk of homelessness. Even if you need a market return on your property – if you list it with us the management fees go into supporting the work of Launch Housing towards ending homelessness in Melbourne.
  • A discount of just 10% off the market rent can make housing affordable for thousands of Victorians who are otherwise priced out of the market and at risk of homelessness.
  • Please contact your financial adviser or tax accountant for more detailed advice on how this ruling might apply to you and your financial situation. Here is a link to the ATO ruling online that your accountant/adviser can refer to https://www.ato.gov.au/law/view/pdf/pbr/cr2016-042.pdf

Housing and homelessness in the top three priorities for Australians leading up to election time

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Full article here.

Homelessness and housing support agency Launch Housing looked into what Australians are saying about homelessness and housing. Acting CEO Dr Heather Holst says the research shows “people are concerned about homelessness, they are concerned about housing affordability and they are concerned that not enough is being done.”

As an enterprise of Launch Housing, HomeGround Real Estate gives property owners the chance to give back and contribute to the housing crisis in Melbourne. Click here for more information.

 

 

 

HomeGround Real Estate on ABC Radio National

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Heather and Belinda sat down with ABC Radio National’s Michael Mackenzie to discuss where HomeGround Real Estate is at just over two years after launching. They break down our different tiers of management, bust some negative gearing myths, explain our relationship with realestate.com.au and share an update on the national rollout!

http://ab.co/1XlK2iS

 

Australia’s great divide: renters and the rest

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With our second birthday fast approaching we’re looking back at what’s been achieved over the past two years together with our landlords, tenants and everyone else in the community who’s supported the initiative. Take a look at Suzy Freeman-Greene’s article published the same week HomeGround Real Estate launched – all of the issues touched on in her comment are still prevalent, most importantly the significant lack of quality, affordable housing available in Melbourne’s inner suburbs for low-income earners or those simply struggling to compete in such a challenging rental market.

Launch Housing Deputy CEO Dr. Heather Holst on 774 ABC Melbourne

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Last week Launch Housing Deputy CEO Dr. Heather Holst was invited to speak with Sally Warhurst on 774 ABC Melbourne. They discussed the current situation for those experiencing homelessness and what HomeGround Real Estate are doing to help. Heather also speaks of the challenges the hot weather at this time of year presents for those sleeping rough.

To listen to the full interview, click here.

New scheme encourages Melbourne to take in the homeless

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HomeGround Real Estate attracted some media attention during Homelessness Prevention Week thanks to a mention by the Lord Mayor on 3AW. It sparked 9news to run a story on the innovative initiative that gives landlords an opportunity to contribute something back in to the community.

We also teamed up with STREAT, CHP, infoxchange, The Big Issue and City of Melbourne at pop-up cafe HoMe to engage the community and promote conversations about homelessness. For more on this, check out our Facebook page.

 

 

New Directions in Private Rental: One House and One Unit at a Time

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Clare Davies, Property Manager, HomeGround Real Estate

‘Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure.’ (1)

Our community needs more safe, affordable and long-term housing options for people who are experiencing homelessness – this is just a fact. There are people all over the country working very hard to achieve this goal. And, particularly in the current climate, there is much work to do. Contributing to an increase in affordable and sustainable housing options requires new and creative thinking. Arguably it is strengthened by the community maintaining a diverse range of programs and models that are flexible enough to work collaboratively when required but that separately maintain a strong, process-driven base that provides security and stability for tenants, workers and property owners.

HomeGround Real Estate (HGREA) was boldly set up in early 2014 in an attempt to contribute to addressing the need for increased housing options in line with HomeGround Service’s goal of ending homelessness in Melbourne.

HGREA is Australia’s ‘one of a kind not for profit real estate agency’ (2) that aims to reinvest property management fees into housing people on low incomes, at risk of homelessness or homeless across Melbourne.

HGREA manages properties that fall into three categories: Tier One, Two and Three. The subsidised housing falls under the Tier Three category.

The following article will focus on this accommodation with some comments from tenants who have lived or continue to live in Tier Three properties.

Overview

What is Tier Three?

  • Tier Three properties are offered exclusively to prospective tenants exiting homelessness.
  • Tenants are linked in with a support worker who continues to work with the tenant until they are settled into the property or on an ongoing basis if needed (although this does not always transpire due to agency engagement limits).
  • Transitional Tier Tree tenants work with a designated support worker for the duration of their tenancy and focus on their long-term housing exit, usually public housing.
  • Prospective tenants generally have low to medium support needs and must be able to live independently.
  • Some tenancies are long-term (provided tenants continue to comply with eligibility criteria (3)) and some are managed as transitional accommodation.
  • Accommodation is new and/or maintained to a high standard.
  • Accommodation is generally very secure, lift access, sometimes onsite concierge.
  • Each property is assigned a property manager (similar to the role of a tenancy worker) who works on behalf of the landlord, but also informs the tenants and support worker of expectations, rights and responsibilities of the tenants and follows the Residential Tenancies Act in all dealings with the tenant.
  • Rent is generally calculated in a similar way to Office of Housing methods and paid via Centrepay.
  • Tier Three properties so far are privately owned, and mostly by HomeGround Services.

HGREA currently manage 40 Tier Three properties. The make-up of these properties and tenancies vary. Twelve properties are managed as transitional accommodation and were previously managed very effectively by HomeGround Tenancy and Property until February 2014 when the HGREA was established. The 18 longer-term properties at the Nicholson were managed by Urban Communities Limited (UCL) until November 2014.

Eighteen Tier Three properties are located within a purpose-built complex in Coburg set amongst private owner/occupiers and other more affordable housing. (Investors and owner/occupiers were aware of the mix of accommodation in the complex from the outset.)

Other Tier Three properties include ex-hotel inner city studios and a series of suburban flats in the inner and eastern suburbs. HGREA also manager a whole complex of units as transitional accommodation on behalf of a church organisation.

These 12 transitional tenancies follow the transitional model whereby a tenant is linked in with a support worker for the duration of their tenancy and they work together in pursuit of securing long-term housing, usually public housing but occasionally private rental.

Positive Outcomes

There have been many positive outcomes for tenants who live in Tier Three properties. Providing safe, secure, affordable, long-term housing could be attributed to acting as a catalyst, a vehicle or leverage for tenants to focus on other things in their life aside from sourcing housing. The addition of targeted support, where applicable, assists tenants greatly in their pursuit of getting life back on track.

Some words from a long-term Tier Three tenant who has moved on the private rental:

‘After nearly eight years with HomeGround I am now confident in what I do with my life and look forward to being independent of Welfare reliance and support providers. I (have been) able to continue my recovery from bad health and focus on a return to employment and education both of which I have achieved.’

Another tenant, when asked how stable housing has contributed to their current situation responded as follows:

‘I have moved beyond merely surviving to thriving. Having one thing in life as a certainty, ‘a sure thing,’ has had a profoundly grounding effect on my life. I’ve been able to achieve long held goals around physical and mental health, succeed with study, eliminate debt and save money. I am living the bright future people kept telling me I was destined for when I was really struggling and in a lot of existential pain.’

Some contributing factors to the success of these tenancies have been identified by a small survey of tenants as including the following:

  • security of the building
  • location and amenity of building
  • tenure or length of tenancy
  • intensive targeted support, particularly at outset of tenancy
  • affordability of accommodation.

‘That it was a secure building and provided a sense of physical safety was hugely important for me when I moved in. Three years on I still see this as one of the biggest advantages of having stable housing.’

Another tenant responded:

‘Because I suffer from general anxiety disorder, which is often negatively environmentally affected, my anxiety has thankfully decreased since being in stable housing.’

and:

‘Stable housing has contributed to my current situation in a positive manner by getting me out of the chaotic and often violent, volatile environment of unstable accommodation that I had been previously living in.’

The Tier Three program is closely aligned with the Housing First model that was borne our of a sharp increase in the number of homeless families with children in Los Angeles, California in 1988. (4) Originally Housing First was focussed on a response for the chronically homeless and was premised on the notion that housing a basic right and should not be denied to anyone. (5)

According to the Thomson Goodall report:

Housing First ‘ and supportive housing are approaches to ending homelessness that focus on providing homeless people with direct access to permanent housing plus support services.’

The ‘Housing First’ model has the following critical elements:

  1. There is a focus on helping individuals and families access and sustain permanent rental housing as quickly as possible and the housing is not time-limited.
  2. A variety of support services are delivered primarily following a housing placement to promote housing stability and individual well-being.
  3. Such support services are time-limited or long-term depending upon individual need; and
  4. Housing in not contingent on compliance with services – instead, participants must comply with a standard lease agreement and are provided with the services and supports that are necessary to help them do so successfully.’ (6)

Despite many examples of tenants flourishing once they secure Tier Three housing, there have also been evictions and difficult tenancies, although very few. In line with research around the Housing First model, I would argue that the fact that as the accommodation is deemed long-term and is thereby more secure and offered in conjunction with the provision of sufficient and individually allocated support, Tier Three tenancies have resulted in less evictions and more overwhelmingly positive outcomes for tenants and (therefore property owners).

Challenges Going Forward

Significant areas for improvement include:

  • Cleaning up the great areas around tenure, can we refer to the tenure as long term when this is tied to tenants’ ongoing eligibility? How can we offer give year leases or longer leases?
  • Support agencies closing prematurely with a tenant – more recently if there has been a perceived need that a tenant might benefit from some support (for example the tenant is building up arrears and there is pending VCAT action), the property manager has the option of asking the tenant if they think they might benefit from being linked with a support worker.
  • Further work needs to be done around how to fund and facilitate support for unsupported tenants if the need arises. HGREA has recently applied for funding for this.
  • Acquiring more appropriate subsidised housing – continued work around pursuing further developments/housing opportunities in order to increase affordable and sustainable housing options.

How does this model assist with prospective tenants who might have a tendency to fall through the cracks, chronic rough sleepers or high needs clients? Or are we satisfied that they are accommodated by other programs/models?

It is quite obvious to me from worker perspective that secure, safe, affordable, long-term housing can change lives and along with other effective models should be a right to all based on individual need.

The question is how will our society create more of these opportunities people? How does our community renew commitment to these challenges particularly in the current climate?

The answer might be one house and one unit at a time.

Stable housing has contributed to my current situation in a positive manner by getting me out of the chaotic and often violent, volatile environment of homelessness including homeless rooming house – unstable accommodation that I had been previously living in. My housing has had an immensely positive impact of all aspects of my life.’

Many thanks to the tenants and ex-tenants for their words and thoughts on this subject.

 

Endnotes

(1). Marianne Williamson quote provided by HomeGround tenant.

(2). Heather Holst, Australian not for profit real estate CEO in Chicago for homeless conference. Postedwww.homegroundrealestate.com.au, 1st June, 2015.

(3). Twenty eight of the Tier Three properties, tenants are offered to renew the lease if they choose at the end of each year, provided they have abided by their Tenancy Agreement and continue to meet eligibility requirements.

(4). Profile for Tanya Tull, Ashoka Fellowship, 2009.  Retrieved February 11, 2014.

(5). Housing First, From Wikipedia, 2015.

(6). HomeGround Transitional Housing Summary Report Independent report by Thomson Goodall Associates, 2009. p 18-19.

 

Featured in Parity June 2015 Volume 28 – Issue 5 Dear Landlord: Private Rental and Homelessness(page 43)

 

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