How do we address the affordable housing crisis? There are lessons to be learned from all over the world.
Kris Daff, in Melbourne, Australia, is developing an important solution. Australia’s housing market is very expensive and lack of tenure in the rental market results in significant levels of housing anxiety. At the same time, Kris, a real estate developer, was disenfranchised with the for-sale housing market in Australia. Usually there are display models and a sales suite, a real estate agent is appointed, and there’s a lot of expensive marketing deployed. The goal is to have investors or residents pay ten percent up front for the right to buy an apartment when a building is finished. Kris finds this to be an impersonal relationship between developer and homeowner, especially as more often than not investors are buying units with managing agents acting on their behalf. At the same time a superannuation investment industry which is the fourth largest pension fund in the world has emerged in Australia, and institutionally owned housing is likely to be on the rise threatening home ownership for those who really need it even further.
Kris wanted to find a way to get affordable homes into the hands of people who need them the most. To that end he embarked on his own international research project on how housing is delivered in other countries, large-scale housing owned by one entity and offered for long term secure rental for residents for whom ownership may be difficult. He took what he learned from US commercial housing models and Europe’s approach to the development of long-term rental housing and melded the two into a unique housing model.
His company, Assemble Communities, builds uniquely affordable housing products that offer a stable, permanent housing solution for low to moderate income earners. They provide tenants with a five-year lease and an option to purchase their property at the end of that lease. They’re not obliged to buy but Assemble provides a program of financial coaching and cost-of-living savings initiatives to help them get there. To date, over 10,000 people have registered their interest with Assemble.
There are no pools or saunas here but Assemble has created an important solution to an enormous problem.
Listen to my interview with Kris Daff.
Image courtesy of Assemble Communities