The success of the PSM

CEHL and its member housing co-operatives are a leading example of the ability of public service mutuals to create and retain shared value – developing human, social and financial capital.

Benefits to individuals – more than just a roof over your head

A secure place to call home

First and foremost, members of co-operatives benefit from the opportunity to access an affordable rental home, often after years of struggling in the private rental market. Co-operatives provide a secure tenure for so long as the member complies with their tenancy agreement and their obligations as a member of the co-operative. In this way, CEHL’s co-operatives provide a stable base for families and individuals to:

  • learn skills, gain self- esteem and dignity and participate in local communities without the threat of homelessness5; and
  • achieve successes in other facets of their lives such education and employment17.

Personal pathways

Being involved in the day-to-day management of their co-operative, tenant members have a range of opportunities for training and skill development. The stable and affordable housing provided by CEHL also makes it easier to focus on education and job training opportunities, and has led to children attaining higher educational levels. Fifty nine per cent of tenants reported commencement or continuation of training after moving into community housing and 50 per cent reported an improvement in their job situation18.

Healthy and diverse communities

Co-operative members meet regularly and develop strong community support networks. 73 per cent of households report improved overall health after moving into co-operative housing18. The co-operative housing model is empowering and is a more natural way to build communities.

“Having a fellow co-op member knock on your door and ask how you are going is so different from having a social worker or unfriendly landlord knock on your door”.

Stephen Nash, CEHL Managing Director

Developing the next generation of community leaders

CEHL actively engages it members in both strategic and operational decision making as well as providing on the job training and development through participation on Boards and sub-committees. Tenant members can also access support from the Training Advisory Committee which finds creative and dynamic ways for people to learn from each other.

The on-line Co-operative Resource Centre also provides information that co-operatives and their tenant members need to effectively operate their co-operative from tenant selection to collecting rent and Directors roles and responsibilities.

“We are going to make it a circle, if everyone shares (the responsibilities) within 2-3 years you will have full knowledge”

Endeavour CERC member9.

Best practice though pooling the resources of co-operatives

The CEHL model fosters best practice in the development and management of affordable housing.The enterprise co-operative model means more efficient delivery of services by pooling the needs of individual housing co-operatives.It also enables better management through building skills and capacity and engaging members on strategic issues.

CEHL and the Co-operatives abide by the Co-operative Principles such as economic member participation, education and training and democratic member control, providing robust building blocks for operating CEHL in line with its purpose.

Efficient housing management

As a Public Service Mutual, tenant members are directly involved in governing and developing their co-operatives such as tenant selection and most co-operatives are active in collecting rents, book keeping and maintenance of the properties. All tenant members are encouraged to attend meetings and are encouraged to apply for positions on the Board and sub-committees.

With the high level of member engagement and sense of ownership in the co-operative, houses are well maintained with low vacancy rates and rent arrears helping to improve the efficiency and viability of CEHL’s operations.

In addition to the immediate benefits to members, the CEHL model is also an efficient and effective means to deliver subsidised housing when compared to public or community housing, as a component of a wider programme.

Tenant satisfaction, engagement and empowerment

Co-operatives are founded on the principle of active member involvement in the day-to-day decision making of how their co-operative operates and how tasks are managed if their co-op is responsible for collecting rent and undertaking maintenance. This results in high levels of tenant engagement, satisfaction and empowerment. Through democratic governance structure, co-operative members also have a say on the strategic planning and policy development of the future of the CEHL housing programme.

Re-investing profit

CEHL is owned by its member co-operatives for their benefit. This means that profits are re-invested into the business to expand and improve housing stock to meet members changing needs over time, create new co-op models to address emerging community need and demand or to save for future expenses. Each co-operative must manage their finances to remain financially sustainable including selecting tenants which provide for an adequate income mix and capacity for good governance.

Innovation and growth

CEHL has been able to expand its portfolio despite a decline in Government funding.CEHL has developed innovative and award winning affordable housing projects such as Gipps St, Abbotsford where a proportion of apartments were sold to the private market to fund apartments for people on low incomes. CEHL has also been able to meet tenant members needs as they change over their life from growing families to downsizers.

New housing developments and aquisitions are either self-funded or undertaken in partnership with government, the private sector and/or community based organisations.Owing to the efficiency of its operating model, CEHL is in a position to maximise social return on public investment.

Financially independent and sustainable

CEHL is financially independent and sustainable – its revenue is generated from secure and mixed tenancies.There is a cross subsidisation of tenants on very low incomes with higher rents paid by those tenant earning higher incomes. This funds staffing to provide training of members, tenant participation forums, all property outgoings including maintenance, insurance, capital upgrades as well as paying interest on debt16. With this income stream CEHL does not rely on recurrent government funding for operating its business.This mixed tenancy profile also enables more mixed and thriving communities, increasing community safety and cohesion. 

Co-operative houses are generally well maintained and cared for by tenant members having a sense of pride in and ownership of their home, in contrast to public housing in which there is a significant maintenance backlog25.

Harnessing a range of contributions to grow the supply of housing

The success of CEHL is in no small part due to its ability to harness a range of resources both internal and external to the organisation. The table below describes the types of resources utilized by CEHL including financial, relationship, human and intellectual and manufactured resources.   

CEHL-Figure4

Wider social and economic benefits of co-operative housing

A study undertaken of the Social Value of Co-operative Housing18 identified a range of social and economic benefits achieved from affordable housing provided by community housing organisations, including co-operatives, in Australia to both members and governments. Providing safe, affordable and secure housing creates the following benefits for members:

Financial: Greater financial flexibility for low-income households as a result of lower rents and more disposable income. This disposable income not only benefits members, having more money to pay for food, education, transport and those unexpected expenses, but also means tenants have money to spend in the local economy. 

Educational: Co-operative housing tenants are more likely to pursue educational or training opportunities that will improve their employment prospects. Their children also have enhanced education opportunities. Co-operative housing further builds the education and skills of tenants due to the participatory nature of co-operatives where members are actively involved in the day-to-day operations of the co-operative.

Health: Improved overall health and reduced demand for health services for ‘heavy users” and disabled populations. A survey of co-operative housing residents found that 70 per cent of respondents believed their health had improved since moving into co-operative housing.

Community Inclusion: Greater tenant empowerment enables co-operative housing members to have more control of their personal lives and receive support from networks which foster self-reliant and independent communities. Co-operative housing further builds on community inclusion, social capital and empowerment through the participatory nature of co-operatives where members are involved day-to-day decision making.

Reducing wider housing stress: A substantial co-operative presence in a housing market, offering good quality, affordable secure long term housing products could ultimately put downwards pressure on market house prices. 

“I entered co-operative housing 14 years ago as a single mum with two daughters. It provided the opportunity to get an education and improve the prospects for my children and me”

Yvonne, Endeavour CERC

Case study: Lakewood

Lakewood is a joint project with CEHL and Eastern Access Community Health (EACH), constructed with capital funding support through the Australian Government’s National Building Social Housing Initiative. The Lakewood Community Managed Co-operative (CMC) was established to provide housing for low to moderate income individuals with a desire to live in apartment-style housing. The tenant members include a mix of people with low incomes from a variety of backgrounds, people with mental illness and other disabilities, refugees, Indigenous people, the elderly and people who are unemployed.  Since opening its doors to tenants in March 2011, Lakewood has accommodated 158 residents across 80 apartment units19.

To determine the value of Lakewood to tenant members and Government, a social return of investment (SROI) was calculated. For every dollar invested in Lakewood Community Managed Co-operative creates an additional $3.78 – this equates to almost $3m over five years19.

The largest contributors of value

 The study found that key outcomes achieved for tenant members are:

  • Improved financial sustainability
  • Improved personal health outcomes
  • Increased employment readiness
  • Increased sense of security
  • Positive educational outcomes
  • Increased community inclusion

For government, the Lakewood development delivered a financial return in the form of reduced cost of child support services, reduced costs of medical services and by reducing public housing waiting lists.

“Before I came here … I wasn’t living, I was just existing basically, whereas now all these things are going on”

Lakewood resident

“because of the support they have around them, they have been able to grow in themselves, build more confidence in themselves and realise they are the great people we know them to be, and they are able to see that in their own eyes.”

Lakewood resident

“In the past they would’ve been on their own…struggling and in a hospital somewhere, whereas here, we are not talking about professional help. But people like neighbours looking after each other”

EACH staff

“I’d say the best moments are the friendships that have developed in the building, people have grown closer, the laughter in the building has been fantastic”

Lakewood resident