An Innovative Approach to Affordable Housing

Community Housing Limited

Community Housing Limited (CHL) imagines a world without housing poverty – and is working hard to bring this vison to reality. The trail blazing not-for-profit delivers affordable housing in Australia, South Asia, South-East Asia and South America, and currently has an Australian portfolio of more than 5,500 properties under management across six Australian states.
~
In Australia, CHL targets low to moderate income people who have the highest housing need or who have been disadvantaged by market failure in their efforts to secure long-term rental accommodation. These people may be living in metropolitan areas or in regional Australia. In other countries, CHL works with people who are languishing in slums or in informal housing, unable to secure safe, affordable homes to achieve home ownership.

CHL’s 1993 founding was inspired by the need “to develop more organisations outside of public housing to deliver housing to specialised client groups in need,” recalls Managing Director Steve Bevington. When government funding came down the pipeline, the organisation got its start helping community groups in Victoria carry out small scale, specialised housing projects. The not-for-profit has continued to grow ever since.

“We have been on a long journey, from the little projects with community groups in Victoria, through to expanding across Australia, to expanding overseas,” Mr Bevington recounts. But, regardless of how large CHL has grown, “the original intention of the organisation is still there at the core,” he says. “We analyse the circumstances of communities and develop programs or projects so that they can get affordable housing; it’s just that the extent of it has grown dramatically from those small projects.”

When CHL ventured overseas, the team encountered some new challenges that had to be addressed in new and innovative ways. “We went to countries where people subsisted off their land and had no income whatsoever,” shares Mr Bevington. “There was no means by which they could pay for housing.” Governments were unable to offer much help, leaving CHL to forge a novel path. “In order to provide people with the means to pay for their housing, we added to our aims the development of training and employment related to construction and housing delivery.”

Every country presents different circumstances, so the team has to take an individualised look at each community to ensure that its needs will be met appropriately. The basic approach stays the same, however. From Papua New Guinea to Chile, the environment is carefully analysed to determine what kind of housing is culturally acceptable, where this housing needs to be located, and how much people can afford to pay for this housing. The team must also consider what kinds of construction technologies should be introduced and what type of financing arrangements can be developed to ensure affordability.

The level of affordability can vary wildly from one country to another. “You might have a home ownership product hovering around $250,000 plus in Australia,” Mr Bevington explains. “In Papua New Guinea that home ownership [price] needs to be around $90,000 and a rental product needs to be a third of the value of what is going on in Australia if you are going to meet the needs of the everyday employed person. In East Timor you need to get down to $20,000 to $35,000 for an ownership product. When you get into India and Indonesia you are looking at $10,000 to $15,000. It all depends on the prevailing economic circumstances and the position people are in.” Solutions are as varied as these numbers are. “When you’ve got very different price points, you are going to end up deploying very different technology and financing strategies.”

CHL’s approach sets it apart from other affordable housing providers. “I am not aware of other providers that operate in such a systematic, analytical fashion to create products for an overall economic environment in which they operate,” Mr Bevington reports. “Most affordable [housing] industries are geared to respond entirely to a government policy approach. And, apart from Habitat for Humanity, no organisations delivering long term housing really exist that can operate across borders and create a product to meet the circumstance within an alternative economy and country. To our knowledge, we are the only one that has attempted to do that.

“Why isn’t affordable housing being delivered in most places in the world?” Mr Bevington asks. “That is the critical issue.” His answer is surprisingly straightforward. “It is because the risks of providing mid to high end housing are much lower because the returns are much fatter.” CHL, therefore, is left to provide a quality product at a price that is markedly lower than what the market normally delivers. “That is incredibly challenging,” Mr Bevington admits. “It requires substantial ingenuity to create something that is sustainable and easy to maintain and cost effective long term at a price point that is lower than what the market supplies. That is the ongoing challenge that the organisation has and has always had.”

Wherever CHL operates, the team endeavours “to generate policy outcomes which will release the supply of affordable housing.” The details vary from nation to nation, but the goal remains the same. “In every country we try and adjust the policy framework that governments are working with and influence them to consider alternative delivery frameworks which will allow affordable housing to be developed,” Mr Bevington explains.

In Australia, for example, the organisation is currently working on a housing supply option to meet the national disability insurance scheme. CHL is also busy creating sustainable management and construction supply arrangements for Australia’s Aboriginal communities.

In Papua New Guinea, “we are working with the National Land Reform Institute to try and encourage communities to accept community ownership of land and then to use that land as an asset to generate affordable housing,” says Mr Bevington. “In East Timor we have developed construction technology which substantially reduces the cost of housing, increases the available employment, creates a material supply industry, and reduces the level of external imports. We have used that as a platform to create affordable housing in the country.”

CHL’s approach has been remarkably successful and the organisation’s reach continues to grow. In order to meet the needs of the communities in which it operates, the not-for-profit has just opened new offices in Western Australia, Victoria, and Tasmania, bringing CHL’s total number of offices to 26 worldwide. The organisation is also in the process of finalising a new housing development project in East Timor that will involve the construction of 150 homes. “We expect that to start within weeks,” Mr Bevington reports. In Chile, the team has just completed an impressive project involving a 23 unit apartment building overlooking a harbour. Additional projects in Chile and Papua New Guinea are also in the pipeline. Once complete, these developments will deliver thousands of houses. The team is also planning a move into Peru, developing affordable housing in the Amazon basin.

In Australia, CHL has just leased nearly 1,200 public housing units in Tasmania which the team is currently managing and plans to renovate. The organisation will also build an additional 150 houses there – and that is only the beginning. “There are a huge number of projects operating across different states,” shares Mr Bevington. In fact, in the near future, the team is rolling out at least 400 affordable houses to New South Wales, South Australia, Western Australia, and Tasmania.

Throughout Australia – and around the world – there is an ongoing need for affordable housing solutions. Meeting that need will always be fraught with challenges – but CHL is committed to overcoming them. The organisation has already blazed a new trail in the affordable housing industry, redefining what is possible both at home and abroad. And with a full roster of projects already lined up for the next several years, the team will continue to make a difference.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

October 21, 2018, 11:46 AM AEDT