Supporting a new approach to housing affordability
The increasing unaffordability of housing is one of the hottest topics in Australia. A lack of supply, the failure of wages to keep up with the cost of living, and the barriers to entry for private home ownership means that secure housing is becoming increasingly difficult to find.
VFFF has set a goal to have 5% of the corpus invested in impact investments. VFFF recognises that providing early support to innovative solutions seeking to help address the big challenges faced by Australia can be highly impactful. Consequently VFFF has been monitoring developments in the housing sector and considering if and where VFFF would be best placed to play a role via the impact investment portion of the portfolio.
One intervention in the housing sector that has been receiving increasing attention is shared equity schemes, whereby investors take an equity position in a home, often for a first home buyer who is unable take their first step into the property market due to their inability to save a substantial enough deposit.
In the short term these models support targeted cohorts to enter the property market, seeking to improve their access to stable and secure housing closer to work, positively impacting work life balance and family cohesion. In the longer term these models have the potential to improve a range of financial and wellbeing outcomes for individuals and their families.
HOPE Housing is an Australian not-for-profit fund manager that has developed a model to help essential workers own a home closer to work. The pandemic highlighted how much we all rely on essential workers and even today the demand for ‘essential occupations’ continues to outstrip the demand for occupations across the rest of the workforce. But the quality of life for these workers is declining as they face housing stress coupled with often being forced to live far from the communities in which they work. This is the problem HOPE Housing is seeking to help solve for essential workers.
VFFF views HOPE Housing as a welcome addition to the impact investment portfolio and values the innovative, yet considered, approach they have taken in the development of their model. The impact of the model on the lives of essential workers participating in the scheme is clear, as highlighted in this case study.