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15 years of community housing

March 6, 2024
December 15, 2021

We were one of the first banks in Australia to start lending to community housing. That was 15 years ago – here’s a look back at the journey.

Community housing providers build and operate homes for people who find it hard to access affordable or appropriate housing in the private rental market. Overall, they manage over 100,000 homes around Australia.

Back in 2006, we did our very first loan to the sector. Here’s why.

Access to housing

The initial seed for Rowan Dowland, Bank Australia’s former Chief Development Officer, was about the social impact of housing. “Our interest was around issues to do with housing affordability, and what the impacts of providing people with safe, secure and affordable housing were,” Rowan says.

Bank Australia* commissioned research into opportunities for supporting housing affordability, which gave us a picture of the emerging community housing sector. This led the bank to start forming relationships in the sector, including with its first borrower, Melbourne Affordable Housing.

Jan Berriman was the CEO of Melbourne Affordable Housing in 2006. Its mission was to increase social and affordable housing for low-income Victorians, particularly in the City of Melbourne. It had 300 properties at the time, and it was looking for ways to increase the portfolio to serve more households in need. “We needed growth to meet demand, and we were keen to find a financing solution to make that happen.”

Where we started

“Back then, we weren’t really familiar with the community housing sector, but we started to get our heads around the properties they owned and how we could lend to them,” says Jacob Edwards, who used to work with us and established our community housing expertise. “We started to engage with the Community Housing Federation of Victoria, and we realised it could be a bigger market, which could provide more housing if they were able to take on debt.”

Jan says Bank Australia was one of the “first and bravest” to enter the market. “That was the encouragement we needed. Most financial institutions struggled to understand what we did and how we did it,” says Jan. With the loan of over $1m from Bank Australia, Melbourne Affordable Housing funded a program to purchase 26 homes around Melbourne.

For Rowan, it made good sense that we worked together as a force for good. “That’s the opportunity a mutual business has – to find ways to collaborate to make a positive impact on peoples’ lives,” says Rowan.

After we began to work more with the sector, we decided to support the development of the first impact study into the community housing sector, identifying positive economic, educational, health and community inclusion benefits for tenants.

Where we are now

Since 2006, we’ve lent over $400m to the community housing sector. Rowan explains this early venture into community housing laid the foundation for our clean money proposition. “Community housing was an incredibly tangible way of being able to demonstrate the power of money,” Rowan says.

The community housing sector has grown substantially over the past 15 years and as it has matured, it has led the development of solutions to Australia’s growing housing affordability problem.

Emma Spano, a senior manager in our impact finance team, spent four years working in the community housing sector before joining the bank. “The sector is working hard to develop innovative and scalable solutions that provide a continuous supply of affordable housing right across the housing spectrum,” says Emma. “It does this by working with partners who are responsive to new ideas and approaches and committed to contributing the time and resources to shape what that looks like.”

Jan says there’s still more to do; “With the growing need in our communities we need more social and affordable homes – post-COVID it seems like a never ending problem.”

Financial institutions can keep supporting the sector by continuing to build their own understanding of community housing and the positive impacts. “I would encourage Bank Australia to play a bigger role within the financing of the sector and identify the key impact opportunities coming through,” says Jan. “Bank Australia has the runs on the board and they should continue to be innovative in this space.”

*In 2006, Bank Australia’s name was MECU.

Melbourne Affordable Housing merged into Housing Choices, which is one of the major community housing providers in Australia.

Bank Australia’s Impact Finance business which exists to grow the bank’s lending with a positive impact for people and the planet

Learn more about our community housing and specialist disability accommodation lending program.

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