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Giving for better living

How voluntary donations from house sales are helping to create more affordable housing

Author:

Steven Persson

27 June 2020

Housing

Residential

Illustration Neil Stevens

The most essential part of improving a person's wellbeing is providing them with a safe and secure home. But a safe home isn't just about having somewhere to sleep at night. A home creates a stable foundation for life that gives us a sense of belonging within our community, personal pride and confidence, and sets us up to make a more meaningful contribution to society.

Everyone should have access to a safe and secure home, yet in Australia alone, 116,000 people are homeless every night, and around 1.5 million live in housing stress. Social and affordable housing is desperately needed, but the current supply cannot meet the demand. Without a safe and secure place to call home, people find it hard, if not impossible to secure and maintain employment, and look after both their physical and mental health. They are operating in survival mode and are just trying to get through each day. For many, this is their reality – things we take for granted are just not possible for people who do not have a stable place to call home.

However, a new initiative could become a global blueprint for ending homelessness. Called Homes for Homes, it has been set up by The Big Issue in Australia to create a brand-new funding stream for social and affordable housing projects, raised from the sale and resale of properties. The idea originates from a US fundraising initiative implemented by Lennar, one of America's largest for-profit developers, in California. The company began selling homes with one small condition attached: all new homeowners were required to make a small donation when they sold their property to help fund local homelessness initiatives.

"The initiative has allocated nearly A$1m in funding to housing providers"

Underpinned by donors

The Homes for Homes initiative in Australia is underpinned by donors – such as individuals or property developers – agreeing to a caveat on their property title, which enables a tax-deductible donation of 0.1% of the sale price to be donated to Homes for Homes. The property remains registered with Homes for Homes as it is sold, and re-sold which then creates a property pipeline that will continue to generate new funding throughout the life of that property.

This funding is granted to experienced housing providers to increase supply. Many housing providers lack the 1-15% of the total cost needed to complete a project, so this funding can make all the difference between a project going ahead or not starting at all.

Since 2015, the Homes for Homes initiative has allocated nearly A$1m in funding to housing providers, to support eight different projects. And it is estimated that the initiative could generate in excess A$1bn of funding over 30 years. The success of the Australian experience has led us to work with The Big Issue in the North to explore implementing Homes for Homes in the UK market.

Last year, the keys to the first home funded with the support of Homes for Homes, and built by Habitat for Humanity Victoria, were handed over to a young family experiencing housing stress. It shows than an initiative such as Homes for Homes can have a real positive effect on people's lives.

In developed housing markets, there is enormous potential to create change in the aggregation of donations from property sales, and by working together we can make a significant difference in the community.

Steven Persson is CEO of The Big Issue in Australia and Homes for Homes