CEHL is a unique model that can incorporate social housing in a wider housing programme effectively a “co-operative of co-operatives”. The 111 separate rental housing co-operatives that form its members are supported by CEHL with asset management, finance and administrative support. This means that CEHL combines the best of both worlds – being responsive and accountable to the needs of individuals and local communities while providing the collective support and financial backing of a substantial and professional public service mutual. It also enables CEHL to respect the independence of individual co-operatives to make decisions which affect their co-operatives and actively engage them in decision making at both the strategy and operations level.
The housing owned by CEHL is many and diverse housing low to moderate income earners including single dwelling housing to mixed housing tenure and multi-level developments.
Tenants come from all walks of life – including families, singles, couples, retirees, cultural and linguistically diverse groups and people with a disability. They take an active role in managing the day-to-day operations of the co-operative10. The inherent pathway to skills and employment leads to mixed incomes in the programme so that it does not just focus on people with the highest need and lowest incomes.
The CEHL model differs to public and community housing, in that CEHL member co-operative actively engages and empowers their tenant members to take an active role in the management of their co-operative, developing their skills, self-esteem and sense of community16. This in turn creates benefits in terms of employment, well-being and financial sustainability6.
“The CEHL programme sees co-operatives provide people with affordable housing, which means they have security of tenure and can participate in their communities. Co-ops don’t own houses individually, instead they’re providing stewardship of housing to meeting members changing needs over time for life13.”
Stephen Nash, Managing Director, CEHL
How the CEHL housing co-operatives work
There a wide spectrum of possible co-operative housing models, which all fundamentally involve tenant members in the governance of their housing. There are currently two co-operative models operating within the CEHL programme:
- Common Equity Rental Housing Co-operative – CERC
- Community Managed Co-operative – CMC model
All properties are owned by CEHL. The two co-operative models differ in the management of tenancy, finance and maintenance.
The Common Equity Rental Housing Co-operative Programme (CERC) is the main co-operative model at CEHL. The CERC headleases properties from CEHL acts as the landlord and manages the properties. The tenant members have responsibilities for key operational tasks including:
- financial administration, including paying rates, paying for insurance on properties, CERC administration costs and a levy to CEHL to cover finance and programme costs;
- collecting rent and following up any rent arrears;
- arranging maintenance and manage funds for future replacement of items such as carpets and hot water services;
- selecting new tenant members;
- submitting quarterly financial reports to CEHL and keeping all associated records;
- most CERCs elect a board and have a treasurer, rents officer and finance committee to manage the day to day financial affairs.
In this model CEHL is responsible for:
- asset management;
- property upgrades;
- training and resourcing of the co-operatives;
- negotiating and servicing of loans;
- programme management; and
- ensuring programme objectives are met including reporting and compliance requirements.
“One-by-one we rotate. Over time with guidance and help the junior Board member becomes the senior”
Ambalavanar, Tamil Senior Citizens CERC (Common Equity Housing Limited 2014).
The Community Managed Co-operative (CMC) Model
The CMC model provides opportunity for a medium level of participation in the running of the co-operative. The CMCs do not act as landlords however they still have considerable say in day to day issues including:
- managing their own administration budget and may accumulate funds or obtain grants for special projects;
- prioritisation of maintenance;
- selecting new tenant members;
- CMCs usually elect a board, including office bearers such as chair and treasurer and secretary which each have specific duties.
- collecting rent and following up any rent arrears;
- all property and tenancy expenses.
CEHL further assistance to members co-operatives such as:
- co-operative development co-coordinators regarding Co-op governance support and training;
- financial administration completing BAS returns, maintaining financial records and preparing for the annual audit.
How is CEHL governed and regulated?
CEHL is a not-for-profit company limited by shares under the Corporations Act with each member co-operative holding a share. This structure was chosen to bring a higher level of accountability and transparency over its financial management. This has built trust and confidence in CEHL as a financially viable and sustainable housing provider to Government and private investors.
Under a regulatory scheme established by the Victorian Government for non-profit housing organisations, CEHL is registered as a housing association. This is the category given to growth providers capable of operating at scale, leveraging private finance and undertaking property development. This requires it to comply with performance standards made under the regulatory scheme which relate to tenancy management, asset management, financial viability, community engagement, governance and management. Compliance is monitored by the Housing Registrar appointed to administer the scheme.
As CEHL takes primary responsibility for meeting regulatory and funding requirements, it must ensure that its member co-operatives in turn also manage their housing in a manner consistent with these obligations.
Over time CEHL has developed a unique governance structure which enables its member co-operatives to be actively engaged in the strategic direction of CEHL and programme direction and development. This is summarised as follows.
The CEHL Board
The Board comprise 11 Directors of which five are elected by the member co-operatives at the CEHL Annual General Meeting and six are nominated by the Board and selected for their technical expertise.
The CEHL Board has established four committees – the Policy Advisory Committee, Finance & Risk Committee, People, Culture & Governance Committee and the Property Committee.
Regional Forums provide a grouping of co-operatives in a particular area with a forum to network and liaise on a number of matters of common interest as well as discuss issues of importance with CEHL. They can also provide useful support and advice for co-operatives and their members, and have a social element to their activities.
Co-operatives Board of Directors
Co-operatives are managed by a Board of Directors, elected by members. These Boards are responsible under co-operatives legislation for the management and administration of the co-operative. Co-operatives may adopt a model whereby all members are Directors. The level of responsibility for the day-to-day management of the co-operative depends on whether the CERC or CMC model is applied.
As well as the Board of Directors, Co-operatives may choose to have a number of sub-committees including Finance, Administration, House inspection, Maintenance, Policy adoption, Tenant/member selection and induction.
Establishing a CEHL member co-operative
The door is always open for CEHL to admit new member co-operatives. To become a CEHL member co-operative there are four key criteria which must be met10:
Membership: A demonstrated common bond amongst members such as geographical proximity, culture or philosophy. A procedure for membership selection and training on policies and procedures.
Co-operative principles: A demonstrated commitment to the principles and practice of co-operation. A management structure that is democratic and complies with the provisions of the co-operatives legislation including legal structure and arrangements for financial management. Decision-making processes which are democratic, effective, and accountable to their members.
Compliance: A demonstrated commitment to comply with the Performance Standards that apply to CEHL as a registered housing association under the Housing Act.
Business plan: Details of housing requirements and its plans for acquiring and managing properties and procedures for monitoring and evaluation of the group’s progress and development.
CEHL works with the co-operative to find vacancies within existing properties or developing and seeking financing for a new purpose built development.
CEHL has developed a range of on-line resources to assist individuals and groups to form a co-operative and seek entry into CEHL.