Government department Homes NSW is responsible for the construction, maintenance and repair of public housing across the state. In late 2024, they asked for feedback on their “Homes for NSW Strategy 2025-2035”. Sydney Cohousing submitted the following in response.

[UPDATE] February 2026: See the final plan from Homes NSW here: Homes for NSW Strategy 2025–2035

We urge Homes NSW to consider as part of their 10-year plan the value of limited equity housing co-operatives. This model is common around the world, but has yet to be introduced to Australia. Homes NSW identifies problems in the supply of affordable housing and tenant outcomes which could be addressed by encouraging the growth of limited-equity co-operatives.

Sydney Cohousing is a local community group wanting to help establish, and live in, more sustainable, affordable, and collaborative housing in inner urban Sydney. We are an incorporated association with members and supporters from diverse backgrounds. Some of us are on the waitlist for public/social housing. Some are on modest incomes. Some are women over the age of 50 vulnerable to becoming homeless. All of us are in rental stress.

We want to propose a housing solution which was not mentioned in the Homes NSW discussion paper.

Why we need alternatives

Our housing system is failing more than 1/3rd of Australians who cannot afford to own their own home. The private rental market, designed to make profits for investors, is insecure and unaffordable for the majority of renters. Long-held assumptions that most renters will eventually buy their own home, are no longer true. Millions now expect they will be renting for life, becoming more vulnerable to homelessness as they age.

Meantime, after decades of under-investment, there is not enough public or social housing to house even those deemed most in need. Homes NSW admits “The wait times for housing are increasing as the housing crisis deepens. The priority list has more than doubled in the last 7 years.”

It is clear we need some new approaches, and other options for ‘non-market’ housing, at scale. Homes NSW focuses on the ‘non-market’ housing sector, but small changes to the existing system are not enough. The non-market sector needs to expand to include not just those at near risk of homelessness or violence, but those who increasingly cannot afford to live in Australian cities.

At the same time, we have increasing levels of social isolation and loneliness, particularly in cities, with apartment blocks designed largely for profit-making, not community-building.

Key facts about limited-equity housing co-operatives

In limited-equity co-operatives, residents pay for some equity (or a share) in the co-op, in the range of $300 – $50,000. (For those who cannot afford this, there are usually concessions or loans available).
The co-operative collectively owns the building, although it may lease land.
Co-op members have a “right-to-reside” which means as long as they abide by the rules of the co-operative, and pay residency and maintenance charges, they can stay as long as they like. Residency charges (essentially rents) are set by the co-op members, usually based on unit size (per square metre), not income.
Residents can choose to move into larger or smaller dwellings within the same building, when available, if their circumstances change. If they leave the co-op they are refunded their initial share.
New South Wales currently has some housing co-operatives managed by Common Equity NSW. However, we propose a very different model. We argue that these existing CHP co-operatives do not go far enough to provide transformative change to the housing system. However, they do demonstrate some advantages of the co-operative model, as we discuss below.

Where do limited-equity co-operatives fit into the housing system?

Homes NSW describes the non-market housing system in the following categories. We think that a cooperative housing sector has something to offer each of these categories.

crisis accommodation (including refuges)
temporary accommodation (including motels)
informal housing (such as couch surfing)
transitional housing
medium-term housing
social housing
affordable housing
key worker housing
homelessness services
Aboriginal housing

Limited-equity rental co-operatives, following the European example, tend to be mixed-income, including those on very low incomes as well as on relatively high incomes. They are not mixed-tenure: all residents are subject to the same by-laws, and may securely inhabit their dwellings for as long as they need or choose. This promotes stability, community, and further benefits described in the next section.

The value of co-operative housing for residents

Research from Western Sydney University has demonstrated many benefits to residents from Australia’s existing CHP-run co-operatives. While we do not think this paradigm is adequate to address the challenges Homes NSW is facing, they do provide valuable lessons.

The Value of Housing Co-Operatives in Australia (2024)

This research shows the benefits that can come from co-operative participation of residents:

Across the four states in the project, we found that tenant-members gain benefits from living and participating in rental housing co-operatives. These benefits include:

skills development;

employment and educational outcomes, as a result of that skills development;

satisfaction with housing stability, quality, and security;

greater social capital;

sense of health and wellbeing, including that of children;

sense of agency, empowerment, and voice.

Aside from the sheer delivery of quantities of housing, Homes NSW asks how it can create “homes that people are proud to live in”. We believe, and this research illustrates, how this pride goes beyond the building itself: “The majority (86%) of tenant-members surveyed feel very much or somewhat at home in their co-operative. Tenure security, being able to make changes to their dwelling, sense of community, sense of support, having a say, and being able to age in place, are all part of what makes a co-operative feel like home.”

We are encouraged by these small-scale demonstrations of the value of co-operative housing to Australians. In Europe, larger-scale demonstrations are common. We are convinced that Australia can scale up these benefits. We emphasize again that co-operatives should be mixed-income, open to not only residents who need social or public housing, but that this sector represents non-market and non-investment housing which can remain affordable for decades to come.

Funding limited-equity co-operatives

In a recent study trip to Vienna, Zurich and Copenhagen, the Business Council of Co-operatives and Mutuals gleaned detailed information about how co-operative housing is funded. This research is available here:

Australia urged to look to Europe for solutions to housing crisis (2024)

[PDF] What Australia Can Learn From European Affordable Co-operative Rental Housing Models (2024)

Projects in those cities are financed via co-op fees and a mix of sources, which vary by country, but may include:

Commercial debt finance,
Ethical investment finance,
Revolving government funds,
Tenant equity and even crowdfunding

This funding is supported by further related measures:

Earmarking of land for affordable housing development,
Planning zoning support for affordable developments,
Tax breaks or targeted subsidies available to not-for-profit or limited-profit housing developers

We understand that many measures in these thriving co-operative cities are beyond the scope of what Homes NSW can achieve by itself. We emphasize that there is a whole ecosystem of measures that can make this sector sustainable, and work by Homes NSW will account for some, but not all, of it.

Over time, once construction costs, loans and building maintenance have been paid for, the co-operative starts to accumulate savings from the regular residency charges, and can invest in more housing. Thus the co-ops can become financially self-sustaining and grow. Co-ops can also choose to lease out some spaces eg. ground floor café or yoga centre, to raise revenue.

This is a very different model to the small number of social housing co-ops in NSW. Members of those co-ops do not own anything, even after 30 years of living in the same dwelling, and the co-ops depend on ongoing government subsidies.

It is also different to the “affordable housing” developments on offer in NSW. Whilst co-operatives may include a similar mix of income ranges amongst residents, it is the co-op members themselves who set the charges, and who have ownership of their buildings, not some distant entity. Co-op housing remains affordable long-term, unlike the “affordable” dwellings in many private developments, which can revert to market rates after 15 years.

Summary of key points

We need to address what is causing the housing crisis and increasing homelessness: skyrocketing rents. One way to do this is with more ‘non-market’ (or non-profit) homes putting downward pressure on local rents.

Since Homes NSW admits the government cannot afford to build enough public housing, and is only housing those on the priority list, we need more ‘non-market’ options. Limited-equity rental housing co-operatives are a much-needed missing piece to this puzzle, as they:

Are a proven model in much of Europe and parts of Canada, but are as-yet unavailable in NSW.
Provide rental housing “at cost” – a third way between the profit-driven private rental market and heavily-subsidised public / social housing
Are low-cost, or cost-neutral for the government, as over time they are self-sustaining
Become more affordable (relative to local markets) over time, allowing more low-income people to join, and putting downwards pressure on local rents
Give residents a stake in, and participation in decision making about their homes (collectively they are the homeowners)
Provide a stable, long-term home
Create more socially-sustainable communities, as they don’t segregate people based on income
Provide better outcomes for residents and more liveable cities as a whole

To this end, we urge Homes NSW to understand and begin to trial this model.

Recommendations for Homes NSW

Educate Homes NSW staff on limited equity co-ops, so that they understand the opportunities this model provides, and the key differences with existing social housing co-ops. This should include reading the BCCM report linked above, and viewing the video of the launch at the Australian Co-operative Housing Alliance summit (which was more in-depth than the presentation some Homes NSW staff attended).
Develop a plan for building a limited-equity housing co-ops sector. Homes NSW suggests in the discussion paper that “The rapid growth in affordable housing requires deep thought about its roles in the system and how to best achieve them”. We suggest that this deep thought should be put into how Homes NSW could support limited-equity co-ops, which meet, and go beyond, the goals of so-called “affordable” housing, in providing lasting affordability, and stronger communities.
Develop a financial model for how limited equity co-ops could be financed without large government subsidies, using specific case studies from overseas as examples. This may include collaboration with Community Housing Providers. Sydney Cohousing has been working with Common Equity NSW to ascertain if we can ensure at least 25% of our proposed co-op is available for people eligible for social housing (for example, Common Equity could own some shares in the co-op on behalf of those residents). However, we need expert financial and legal advice on this.
Identify land which could be leased long-term (50 – 75 years) by a limited-equity co-operative.
Establish a pilot project. We are a group of people, including some key workers and people eligible for social or affordable housing, who are keen to establish and develop a secure, long-term rental co-operative. We would like to work with Homes NSW on an initial project to prove the viability of this model and pave the way for such co-operatives to work at scale. The Housing Innovation Fund may provide an opportunity to give this model the start-up that it needs.

If you want to support our work advocating for more collaborative, sustainable and affordable housing solutions, get in touch!

Sydney Cohousing