A trial housing project in North Melbourne is serving as an effective model to help social housing tenants become homeowners, thereby freeing up public housing waitlists.
The result of a working partnership between the University of Melbourne, Melbourne City Mission, Resilient Melbourne and the City of Melbourne, the trial housing development on a 34-unit apartment block has helped long-term social housing tenants, who have been priced out of the property market, fulfil their dream of homeownership.
The final report on the Barnett Model (formerly Melbourne Apartments Project or MAP) demonstrates the model’s effectiveness as a scalable solution to provide secure homeownership options to social housing tenants in an affordable way.
The Barnett Model responds to two key barriers to homeownership: high deposit requirements and capacity to qualify for and make repayments to service a large mortgage.
The model addresses these barriers through a deferred second mortgage that allows homeowners to pay approximately 63 percent of the apartment’s market value upfront. The remaining value is covered by a no-interest, no-fee loan (or ‘Barnett Advance’) that reduces over time and isn’t payable until the homeowner sells their apartment.
Faculty of Architecture, Building and Planning researcher, and lead author of the report, Dr Katrina Raynor says, “Our research shows that most of the residents who bought into the Melbourne Apartment Project had been long-term social housing tenants. They had been dreaming of homeownership for a long time but had never had the capacity to buy a home until now.”
Raynor added that the developments are scalable and will provide a proactive solution for more people in need of an attainable homeownership option.
One of the beneficiaries, Sorayia, 28, said, “For the first time we feel safe and happy knowing this is our own space.
We’ve lived in public housing for 21 years and know now that this is our forever home. I hope more people get the same opportunity. We feel very lucky.”
Melbourne City Mission CEO Vicki Sutton says, “The report demonstrates this innovative and realistic initiative can provide a successful pathway into homeownership for social housing residents. This opportunity also frees up social housing for many people languishing on social housing waitlists.”
Chair of the City of Melbourne’s People City portfolio, Beverley Pinder says that, “This is a great example of what non-traditional partnerships can achieve, when a number of organisations come together to deliver much needed accessible housing stock.”
Future plans include creating crisis accommodation in Frankston and another Barnett Model development in Brunswick to extend the shared equity homeownership model developed as part of the original Melbourne Apartments Project.