As housing prices in Australia continue to rise exponentially, shutting many out of the market and forcing others to commute long distances to work, for essential workers – teachers, nurses, police officers, firefighters – this problem is compounded.
While they are needed in every suburb and every town, essential workers' wages often don't meet the housing costs near to where they work.
This systemic issue was here well before COVID-19, but the pandemic's unprecedented nature has forced an often public conversation about which workers are 'essential', and how well they are supported in our community, and by our government.
Addressing the affordable housing challenge
The team behind start-up social enterprise HOPE Housing has been working for three years on addressing these challenges for essential workers.
Having engaged the Centre for Social Impact to support the project with research and evaluation, HOPE is almost ready to launch their affordable housing initiative - the final pieces of the puzzle are in securing sufficient investment and selecting the beneficiaries of their work.
Founder and Director of HOPE Housing, Tim Sims' early inspiration for the project came when he married a nurse in London, though it would be decades before he translated the experience into this new social enterprise.
Living on a low income, the young couple found it hard to secure affordable accommodation near their work and transport was unreliable, causing stress for his wife, who needed to get to her patients' homes in order to administer timely medications.
"That made a deep impression on me," Sims recalls, "that there were people who were serving the community selflessly, where lives mattered, service levels mattered, and yet their personal life circumstances made that not straightforward."
"Obviously in more recent times in Australia, we've seen the incredible service of various frontline workers. They're not the highest paid professions," he adds, "but they are absolutely critical to the functioning of our community."
Fast forward a few years and Sims was approaching Tim Buskens – now the CEO of HOPE Housing – with a proposal to address this housing challenge for our essential workers.
The pair had worked together 15 years prior and remained in contact. Sims, now the Founder and Managing Director of Pacific Equity Partners, and Buskens with an extensive background in financial services.
When Sims got in touch, Buskens was taking a career break to spend time with his three kids, while he reevaluated his career.
"After a series of successful career roles I wanted to use some of that experience to give back to the community to do something quite impactful and meaningful," he explains.
After some initial discussions and research, Buskens was enthusiastically on board with Sims' plan: "We shook hands and I've been working with him on it ever since."
"From the private equity side, I could bring financial technologies and understanding in terms of how to raise and structure funds, how to structure innovative business models to solve problems," explains Sims.
"And Tim [Buskens] could bring the clear-thinking regulation, control, business-building, hands-on management pieces that we needed to fill out that equation. Subsequently, we've added other elements to the management team under his direction, along with utilising Deloitte who supported the financial model, and BIS Oxford Economics who provided property market analysis."
The model they've settled on with HOPE Housing is a simple idea deployed in other parts of the world, says Buskens, but it's a new model of housing investment here in Australia.
HOPE will co-invest as a passive shared equity partner, buying 50% of a home, with a frontline worker purchasing the other 50% through a mortgage from HOPE Housing partner, Police Bank.
The frontline worker will be under no obligation to buy out HOPE, but should they sell the property the fund receives a proportional share of the proceeds.
"The principles behind HOPE are that the problem should be solved in a very simple, transparent and robust way," explains Sims.
"It has to make sense to all different constituencies, investors, distributors, managers and customers. And it should be solved in a way that doesn't ask, if possible, for soft capital or free handouts or special privileges."
"Using the hard rules of commerce, can we come up with an equation which solves this problem for all parties involved? And what's thrilling, is that I think we have been able to do that."
Evaluating HOPE's impact
It was Tim Buskens who reached out to the Centre for Social Impact UNSW, with a view to ensuring their work was not only innovative but also subject to rigorous evaluation on its social impact.
"There are a lot of consulting firms out there that do this work, but I really wanted a blend between business and academia," Buskens explains. "I felt that it'd be more aligned to our values and what we're trying to do."
HOPE Housing offered the CSI team an engaging new challenge due to the shared equity component of the project, an approach which has been used in the UK but isn't common in Australia.
Dr Ioana Ramia - who is leading the evaluation project with HOPE Housing - has worked at the Centre for Social Impact for 6 years, specialising in evaluation theory and practice. She's worked on a range of projects, from housing to homelessness to education, and has spent some years in the private sector working for an evaluation consultancy.
"HOPE Housing initially wanted an evaluation framework," she explains, "a plan to understand what outcomes they should be measuring and how, before they start rolling out the program."
"We really wanted to understand the social benefits of being able to afford housing closer to where you work," adds Buskens.
"And if we enabled people to afford housing close to where they work, what's the value that we are going to give to the wider community?"
At the end of 2020 CSI's UNSW team first completed a forecast analysis mapping all the outcomes that the program is likely to achieve, and having found this initial research so beneficial HOPE Housing then sought further support from CSI – to both set up a system to monitor and collect data as their clients start coming in, and to complete a two-year evaluation of the program.
"Using surveys and interview questionnaires, we will collect information from HOPE Housing's clients about their current housing arrangements and how these change, along with their wellbeing at home and work, as they are joining the program. This will provide evidence about the changes experienced by these essential workers," Ramia explains.
"It's great that they came to us before implementing the program," she adds.
"You don't want to be invited to do an evaluation one or two years after the program's been rolled out, because you really don't have the baseline data. You don't know where the people came from, and it's very hard to assess any change. Being here from the beginning, you have a chance to set up the measurement, ask all the questions and collect all the data, maximising your chances of having a good evaluation."
Buskens agrees on the importance of setting up their evaluation practices right from the start:
"In addition to a strong commercial return, targeted at 10 per cent, CSI's work helps us better understand our social impact estimated around 30 cents for every dollar invested.
"CSI have also helped in our product design, ensuring the product is suitable and that it will actually help our essential workers."
Things are moving quickly, with HOPE liaising with investors and potential clients for the first roll out of the affordable housing project.
"I want to see our essential service workers put the Christmas tree up and be in our shared equity home to celebrate Christmas Day," says Sims.
"That's the goal that we've set, and we're running really hard to make that happen."
