How our solution helps to end poverty and homelessness
1. Reducing homelessness by increasing the availability of social housing
Our primary goal is to reduce poverty and homelessness in Australia by increasing the availability of social and affordable housing and reducing housing wait-lists(1). Our Head Start Guarantee always helps the following two households at the same time:
The community housing tenant who needs to overcome structural disadvantage to purchase a home;
The family or individual who is at-risk of or presently experiencing homelessness, who becomes able to move into a newly vacated community housing home.
Freeing up more community housing homes means that Community Housing Providers can better achieve their charitable mission to support more low-income households in need of secure housing. Living in a stable and secure home provides a foundation to progress other areas of life, ultimately empowering households to dramatically improve their circumstances and open doors to brighter futures.
2. Equalising access to home ownership
Home ownership is one of the best ways to end inter-generational poverty(2). This is because home ownership provides a secure asset to rely on in retirement, as well as an inheritance to pass on. Today the majority of first home buyers rely on the ‘bank of mum and dad’ to achieve their home ownership dreams. This means that for the first time in modern history parental wealth is more important than individual endeavours when trying to buy a home.Head Start Homes recognises that an overwhelming proportion of community housing tenants can’t rely on their parent’s wealth and thus are locked out from achieving their home ownership dreams for life.
By removing the need for a deposit and mortgage the Head Start Guarantee provides community housing tenants with a similar pathway to home ownership which is currently only offered to wealthier Australians.
3. Amplifying equality through fairer finance
Community housing tenants who are accepted for a Head Start Guarantee will be provided with similar access, service and pricing for their home loan which is usually reserved for high net worth customers. Thus, working with our banking partners we are shifting the status quo whereby access to finance is expensive for the poor and cheap for the rich.
We are therefore helping to create a finance system whereby social return (and not only profits) is a key motivator for the availability of finance.
4. Delivering a multiplier effect for ending poverty
Head Start Homes is a social enterprise with a financially sustainable model. Investing in our work delivers a high social and economic return.Over time, the capital required to assist a single household will ultimately be re-used to benefit many more to take the same journey to home ownership. As the new home starter pays down their mortgage, the Head Start Guarantee progressively becomes available for another community housing tenant. This model continually increases social return over time.
Current modelling suggests that an investment in Head Start Homes of $72,000 (average cost of one home ownership journey) will result in individual and community benefits worth $83,628 in the first year alone. After ten years this single investment is projected to deliver over $1 million worth of individual and community benefits while providing homes for 4 households (approx. 12 individuals).
5. A cost-effective way to increase the availability of social housing
Empowering community housing tenants to voluntarily vacate their home is more cost effective than building more stock. For instance, we estimate that one contribution of $72,000 could make an additional 6 community housing homes available over 30 years. This is in comparison to building 6 new homes which would cost approximately $2,160,000.