Rent Model Review

Dear Co-ops

The CEHL Board have approved a new Rent Model based upon recommendations received from the Rent Model Advisory Group (RMAG).

Thank you to our Rent Model Advisory Group (RMAG) and the hundreds of contributions from co-ops, and your members, that have created the new Rent Model. Your wisdom and insight are the cornerstone of our co-op housing program. This has been a very intensive and complex process, led by co-op members, and the results are a testament to the commitment of our membership to our program and our communities.

There are important changes to how ‘maximum rent’ will be calculated and other key changes to our Rent Model that your members need to be made aware of. Changes will start to take place from July 2019.

The new rent model will . . .

  • Align with the Program Principles of affordability and sustainability
  • Align with social housing rent setting, and apply an income-based affordability benchmark
  • Provide more income for the Program, both to co-ops and to CEHL
  • Protect the Program’s charitable status

Attached here are fact sheets explaining the new Rent Model, and the plan for implementation.

You will find an archive of all RMAG documents in the document archive to the right of this page.

The CEHL Board are aware that members may be concerned about the impact of rent changes, particularly for lower-income households, we’d like to emphasise that:

  • No household will be charged more than 25% of their main household income
  • There will be no change to how minimum rents are currently calculated. Minimum rent is based on 25% of the Centrelink income the household is eligible for.
  • Maximum rent will be a ‘market rent’ for that property, as established by an independent valuation
  • No changes to rent before 1 July 2019
  • Before the end of 2018, every household will be provided with an estimate of their rent under the new model, based on current income and market rent information
  • Rent increases from the new rent model will be capped at $50pw for the first financial year, with the balance of any increase applied from July 2020
  • Financial counselling and hardship provisions will be available
  • A dedicated ‘Rent Hotline’ to answer questions

CEHL Rent Model aligns with social housing sector benchmarks

The new rent model will use the Victorian social housing sector benchmarks for income assessment and setting minimum and maximum rents. The board have approved an affordability benchmark of 25% of main household income, until the review of program costs and the Company Rent Model and affordability benchmark is completed.

Maximum rent calculation change

As per the RMAG recommendation, ‘maximum rent’ will be calculated on a market rental value of an individual property, previously maximum rent was set by a very broad region.

Rent reductions for co-op labour to be shared

Rent reductions to individual households in recognition of co-op labour will no longer be paid. This is because the reduction was not equitably realised across all co-op members. Instead, co-ops will retain 45% of the value of the increased rental revenue and 55% will be applied by CEHL to the Third Schedule budget across the Program. This will be an interim arrangement until the review of program costs and the Company Rent Model is completed.

Further work to be undertaken

RMAG also recommended that CEHL undertake a detailed review of program costs and establish a new Advisory Group to review the program costs and inform a Company Rent Model and confirm that the affordability benchmark is appropriate. The new Advisory Group will engage with Program members to review of program costs and revenue in order to recommend a Company Rent Model and affordability benchmark going forward. We look forward to ongoing co-op engagement in shaping these important decisions impacting our future.

Rent Hotline

The Rent Hotline has been established to provide co-ops with further information about the rent model review or the new rent model. Please encourage all members to call the Rent Hotline with any concerns about rent changes.

Rent Hotline 9208 0806 10am and 3 pm Monday to Thursday

More information

Information about the new rent model, implementation, phasing and the RMAG process is available on the Rent Review page on Have your say on the CEHL website, information includes:

· A Rent Model fact sheet

· A Rent Change Implementation timeline

· The full RMAG report including responses to co-op feedback and the final recommendations

Yours in co-operation

Karren Walker

CEHL Board Chair


Dear Co-ops

The CEHL Board have approved a new Rent Model based upon recommendations received from the Rent Model Advisory Group (RMAG).

Thank you to our Rent Model Advisory Group (RMAG) and the hundreds of contributions from co-ops, and your members, that have created the new Rent Model. Your wisdom and insight are the cornerstone of our co-op housing program. This has been a very intensive and complex process, led by co-op members, and the results are a testament to the commitment of our membership to our program and our communities.

There are important changes to how ‘maximum rent’ will be calculated and other key changes to our Rent Model that your members need to be made aware of. Changes will start to take place from July 2019.

The new rent model will . . .

  • Align with the Program Principles of affordability and sustainability
  • Align with social housing rent setting, and apply an income-based affordability benchmark
  • Provide more income for the Program, both to co-ops and to CEHL
  • Protect the Program’s charitable status

Attached here are fact sheets explaining the new Rent Model, and the plan for implementation.

You will find an archive of all RMAG documents in the document archive to the right of this page.

The CEHL Board are aware that members may be concerned about the impact of rent changes, particularly for lower-income households, we’d like to emphasise that:

  • No household will be charged more than 25% of their main household income
  • There will be no change to how minimum rents are currently calculated. Minimum rent is based on 25% of the Centrelink income the household is eligible for.
  • Maximum rent will be a ‘market rent’ for that property, as established by an independent valuation
  • No changes to rent before 1 July 2019
  • Before the end of 2018, every household will be provided with an estimate of their rent under the new model, based on current income and market rent information
  • Rent increases from the new rent model will be capped at $50pw for the first financial year, with the balance of any increase applied from July 2020
  • Financial counselling and hardship provisions will be available
  • A dedicated ‘Rent Hotline’ to answer questions

CEHL Rent Model aligns with social housing sector benchmarks

The new rent model will use the Victorian social housing sector benchmarks for income assessment and setting minimum and maximum rents. The board have approved an affordability benchmark of 25% of main household income, until the review of program costs and the Company Rent Model and affordability benchmark is completed.

Maximum rent calculation change

As per the RMAG recommendation, ‘maximum rent’ will be calculated on a market rental value of an individual property, previously maximum rent was set by a very broad region.

Rent reductions for co-op labour to be shared

Rent reductions to individual households in recognition of co-op labour will no longer be paid. This is because the reduction was not equitably realised across all co-op members. Instead, co-ops will retain 45% of the value of the increased rental revenue and 55% will be applied by CEHL to the Third Schedule budget across the Program. This will be an interim arrangement until the review of program costs and the Company Rent Model is completed.

Further work to be undertaken

RMAG also recommended that CEHL undertake a detailed review of program costs and establish a new Advisory Group to review the program costs and inform a Company Rent Model and confirm that the affordability benchmark is appropriate. The new Advisory Group will engage with Program members to review of program costs and revenue in order to recommend a Company Rent Model and affordability benchmark going forward. We look forward to ongoing co-op engagement in shaping these important decisions impacting our future.

Rent Hotline

The Rent Hotline has been established to provide co-ops with further information about the rent model review or the new rent model. Please encourage all members to call the Rent Hotline with any concerns about rent changes.

Rent Hotline 9208 0806 10am and 3 pm Monday to Thursday

More information

Information about the new rent model, implementation, phasing and the RMAG process is available on the Rent Review page on Have your say on the CEHL website, information includes:

· A Rent Model fact sheet

· A Rent Change Implementation timeline

· The full RMAG report including responses to co-op feedback and the final recommendations

Yours in co-operation

Karren Walker

CEHL Board Chair


  • UPDATE 11 September 2018

    about 2 months ago

    UPDATE 11 September 2018

    Dear Co-ops

    The RMAG Recommendation Survey has now closed. Thank you for taking the time to consider the recommendations contained in this report. Your feedback will be considered and reflected to the CEHL board to help to ensure that the program remains financially sustainable and continues to provide stable accommodation to its members.

    Please keep your eye on this page for further information.


    UPDATE 11 September 2018

    Dear Co-ops

    The RMAG Recommendation Survey has now closed. Thank you for taking the time to consider the recommendations contained in this report. Your feedback will be considered and reflected to the CEHL board to help to ensure that the program remains financially sustainable and continues to provide stable accommodation to its members.

    Please keep your eye on this page for further information.


  • UPDATE 17 July 2018:

    4 months ago

    UPDATE 17 July 2018:

    Dear Co-ops

    Please find the final Draft Rent Model Advisory Group Recommendations for Co-op Feedback and a range of supporting documents in the document library to the right. RMAG have been working on these recommendations since November of 2017. Their views have been formed through extensive consultation with members and respond to the task that they have been set by the Board of Common Equity Housing Limited.

    The documents include:

    UPDATE 17 July 2018:

    Dear Co-ops

    Please find the final Draft Rent Model Advisory Group Recommendations for Co-op Feedback and a range of supporting documents in the document library to the right. RMAG have been working on these recommendations since November of 2017. Their views have been formed through extensive consultation with members and respond to the task that they have been set by the Board of Common Equity Housing Limited.

    The documents include:

    Create your own user feedback survey

    RMAG is seeking a collective response from each Co-op. To ensure that the feedback received is from the Co-op as a whole we are requesting that you record how the response has been developed. If you require support in this process please contact your Co-Op Development Coordinator for advice or assistance.

    To provide feedback to RMAG please input your co-op’s feedback through the online survey below by the 10th of September 2018. If your co-op wishes to provide your feedback in hardcopy please ensure that your feedback is returned to the CEHL offices at Level 1, 112 Balmain Street Richmond Vic 3121, by the 3rd of September 2018.

    Thank you for taking the time to consider the recommendations contained in this report. Your feedback will be considered and reflected to the CEHL board to help to ensure that the program remains financially sustainable and continues to provide stable accommodation to its members.


  • UPDATE 29 June 2018:

    6 months ago

    UPDATE 29 June 2018:

    The Board of Common Equity Housing Ltd. (CEHL) have established the Rent Model Advisory Group RMAG to develop recommendations on a new rent model that reflects the Program Principles and addresses feedback from member Co-ops. RMAG is made up of six co-op members and is supported by an independent Chair and staff from CEHL.

    The Program Principles require CEHL to offer clear benchmarks of affordability and our registration as a Housing Association requires the Program to have rent models that are suitable for low income households. The Board will not approve a rent model that does...

    UPDATE 29 June 2018:

    The Board of Common Equity Housing Ltd. (CEHL) have established the Rent Model Advisory Group RMAG to develop recommendations on a new rent model that reflects the Program Principles and addresses feedback from member Co-ops. RMAG is made up of six co-op members and is supported by an independent Chair and staff from CEHL.

    The Program Principles require CEHL to offer clear benchmarks of affordability and our registration as a Housing Association requires the Program to have rent models that are suitable for low income households. The Board will not approve a rent model that does not reflect an assessed rent based on household income.

    Earlier this year, RMAG conducted nine workshops across the State, seeking feedback on five aspects of the current rent model. RMAG have considered the feedback received from those initial workshops, including modelling the impact of some of the potential responses on households.

    This has led to RMAG reaching broad agreement on 4 potential approaches to test with co-op members. Input from members about these 4 approaches will be used to develop a draft recommendation to the Board. This draft will be provided to co-ops for feedback before being finalised and presented to the Board. Please see the documents libarary on the right for further information on the potential approaches.

    The survey on the 4 approaches is now closed. This information will now go to RMAG for consideration.

    Please keep an eye on this page for more information.

    Survey closes 29/06/2018.


  • UPDATE 5 June 2018:

    7 months ago

    UPDATE 5 June 2018:

    Thank you all for your attendance at the Rent Model Review Regional Workshops.

    Please see the final report on the workshops in the documents section of this page and discuss their contents with your co-op.

    The next opportunity for you to have your say on the Rent Model Review will be at the CEHL conference on the 15th of June as well as the accompanying survey.


    UPDATE 5 June 2018:

    Thank you all for your attendance at the Rent Model Review Regional Workshops.

    Please see the final report on the workshops in the documents section of this page and discuss their contents with your co-op.

    The next opportunity for you to have your say on the Rent Model Review will be at the CEHL conference on the 15th of June as well as the accompanying survey.


  • UPDATE 14 May 2018:

    8 months ago

    UPDATE 14 May 2018:

    Thank you all for your attendance at the Rent Model Review Regional Workshops.

    Please see the reports on each of the workshops in the documents section of this page and discuss their contents with your co-op.

    The next opportunity for you to have your say on the Rent Model Review will be at the CEHL conference on the 15th of June as well as the accompanying survey.


    UPDATE 14 May 2018:

    Thank you all for your attendance at the Rent Model Review Regional Workshops.

    Please see the reports on each of the workshops in the documents section of this page and discuss their contents with your co-op.

    The next opportunity for you to have your say on the Rent Model Review will be at the CEHL conference on the 15th of June as well as the accompanying survey.


  • UPDATE 5 May 2018:

    8 months ago

    UPDATE 5 May 2018:

    Thank you for your contributions to both the online survey and discussion forum during the first phase of Program consultation as part of the rent model review.

    The survey and forum are now closed. The feedback from both will be provided to the Rent Model Advisory Group (RMAG) for its consideration.

    The next opportunity you will have to consider and provide feedback on RMAG’s work will be at the CEHL Conference on Friday, 15 June. Over this time, there will also be an online survey and discussion forum for those not able to attend the conference...

    UPDATE 5 May 2018:

    Thank you for your contributions to both the online survey and discussion forum during the first phase of Program consultation as part of the rent model review.

    The survey and forum are now closed. The feedback from both will be provided to the Rent Model Advisory Group (RMAG) for its consideration.

    The next opportunity you will have to consider and provide feedback on RMAG’s work will be at the CEHL Conference on Friday, 15 June. Over this time, there will also be an online survey and discussion forum for those not able to attend the conference or who want to continue the conversation.

    A copy of the discussion forum thread is available in the document library on the right-hand-side of the page. In the coming weeks, summaries of the regional workshops will also be added to the library.

    Please continue to check in on this page for further updates.


  • UPDATE 18 April 2018

    8 months ago

    UPDATE 18 April 2018:

    The Rent Model Review Workshops have now begun and we are looking forward to collecting your feedback on the process.

    We have also developed a survey to capture the feedback of anyone who is unable to attend the workshops. The survey will be open from the 18 - 29 April.

    Create your own user feedback survey

    UPDATE 13 March 2018:

    Have your say on the Rent Model Review

    The Rent Model Advisory Group (RMAG) has been established to make recommendations to the CEHL Board on a revised rent model. Any recommendations made by RMAG need to...

    UPDATE 18 April 2018:

    The Rent Model Review Workshops have now begun and we are looking forward to collecting your feedback on the process.

    We have also developed a survey to capture the feedback of anyone who is unable to attend the workshops. The survey will be open from the 18 - 29 April.

    Create your own user feedback survey

    UPDATE 13 March 2018:

    Have your say on the Rent Model Review

    The Rent Model Advisory Group (RMAG) has been established to make recommendations to the CEHL Board on a revised rent model. Any recommendations made by RMAG need to maintain CEHL’s registration as a Housing Association, which comes with clear expectations regarding providing affordable rents for eligible households.

    For RMAG to make recommendations that reflect the views of the Program, it needs to hear from you. To do this, a series of regional workshops and an online survey are planned:

    1. WORKSHOPS: Attend a workshop in your region scheduled between 18 – 24 April.
    2. ONLINE SURVEY: Complete a survey online between 16 – 29 April.

    TO RSVP FOR A WORKSHOP PLEASE CLICK ON YOUR RESPECTIVE REGION TO THE RIGHT. The workshops and survey represent the first of a number of opportunities that Program participants will have to input into the rent model review. The information will be used by RMAG in its future development work, which will then form the basis of further consultation with co-ops and members.

    The process will culminate in co-ops being asked to consider RMAG’s draft recommendations and provide co-op endorsed feedback on them.

    Workshop discussion topics

    Through its work to date, RMAG has identified a series of key topics that it believes are important to consider in the rent model review. The April workshops will be focused on generating discussion and obtaining your views on these topics:

    • Setting maximum rent – rental zones compared with a market rent approach
    • Income assessment – how income is assessed in the calculation of individual household rent
    • Property amenity – relationship between property features and individual household rent
    • Discount for labour – relationship between labour undertaken and individual household rent
    • Property utilisation – relationship between property utilisation and individual household rent.

    For any questions you may have please call Peter Sleeman on (03) 9208 0859


  • UPDATE 23 November 2017:

    11 months ago

    UPDATE 23 November 2017:

    Following a highly competitive selection process, we are delighted to introduce the members of RMAG:

    • Bruce Fraser, Rainbow 8 CERC
    • Julie Gilchrist, Solar City CERC
    • T. Raveendiran (Ravi), Tamil CERC
    • Alice Rink, Castle CERC
    • Lila Talarico, Diamond Valley CMC
    • Matthew Walker, Earth CERC.

    Each member demonstrated relevant skills and experience and, collectively, represent a good cross-section of the Program. RMAG will be led by an independent chair, Ben Neill, and supported by an independent technical expert who RMAG members will have a role in the selection of.

    To ensure that member co-ops are able to contribute...

    UPDATE 23 November 2017:

    Following a highly competitive selection process, we are delighted to introduce the members of RMAG:

    • Bruce Fraser, Rainbow 8 CERC
    • Julie Gilchrist, Solar City CERC
    • T. Raveendiran (Ravi), Tamil CERC
    • Alice Rink, Castle CERC
    • Lila Talarico, Diamond Valley CMC
    • Matthew Walker, Earth CERC.

    Each member demonstrated relevant skills and experience and, collectively, represent a good cross-section of the Program. RMAG will be led by an independent chair, Ben Neill, and supported by an independent technical expert who RMAG members will have a role in the selection of.

    To ensure that member co-ops are able to contribute to the rent model review, a series of engagement activities are planned for 2018. The high-level dates for these are set out in the 2018 Engagement Calendar, with further detail to be provided in the new year.

    In the meantime, if you haven’t already done so, you are encouraged to read the two background papers on Program costs and revenue that are available via this pa


  • Overview of the Rent Model Review Project

    about 1 year ago

    Overview

    To help facilitate a Program discussion on the adequacy and equity of our rent model, an advisory group made up of co-op members is being established.

    The objectives of the Rent Model Advisory Group (RMAG) are to:

    • ensure that the review of CEHL’s rent model includes appropriate, accessible and timely opportunities for Program participants to input and provide feedback into the review process

    • make a recommendation of a revised rent model to the CEHL Board that reflects feedback from Program participants and aligns with the Program Principles and Board non-negotiables.

    We strongly encourage co-op members to apply for RMAG....

    Overview

    To help facilitate a Program discussion on the adequacy and equity of our rent model, an advisory group made up of co-op members is being established.

    The objectives of the Rent Model Advisory Group (RMAG) are to:

    • ensure that the review of CEHL’s rent model includes appropriate, accessible and timely opportunities for Program participants to input and provide feedback into the review process

    • make a recommendation of a revised rent model to the CEHL Board that reflects feedback from Program participants and aligns with the Program Principles and Board non-negotiables.

    We strongly encourage co-op members to apply for RMAG. You don't need any specific financial knowledge or expertise, just a willingness to work collaboratively on the development of a revised rent model.

    Information on how to apply is available here and application forms are available here.

    Applications close on 29 September 2017

    For any assistance with applying, please contact Peter Sleeman on (03) 9208 0800.

    Background

    Funding arrangements for social housing providers have changed significantly since the establishment of the original CERC Housing Program. In particular, changes to the amount and frequency of capital grants from government and the change from rent rebates to a rent model that incorporated Commonwealth Rent Assistance (CRA) mean that Housing Associations like CEHL no longer receive any operational subsidies from government. The value of the capital investments by government over time means that CEHL does have an ongoing obligation to maximise affordable housing outcomes to eligible households. While CEHL will always seek to access subsidies that become available from time to time, it is important that the CEHL Co-op Housing Program can meet its affordable housing obligations and is viable without external subsidies.

    In response to this, the CEHL Board has requested that CEHL undertake a Rent Model Review. This review will examine the current and possible alternative rent models and result in the recommendation of a rent model that best balances and reflects the Program Principles.


  • Program revenue and costs background information

    about 1 year ago

    The first of two papers on Program revenue and costs are now available on this page.

    The first paper provides clarity about current Program revenue, compares this against relevant sector and market benchmarks and considers the likely implications for the Program of changes to specific revenue measures.

    The second paper provides clarity on Program costs and, similarly, considers these against relevant benchmarks and model the impact of changes to the cost structure on Program viability.

    Together, the two papers aim to provide co-ops within formation about Program revenue and costs necessary for them to participate in important discussions about Program...

    The first of two papers on Program revenue and costs are now available on this page.

    The first paper provides clarity about current Program revenue, compares this against relevant sector and market benchmarks and considers the likely implications for the Program of changes to specific revenue measures.

    The second paper provides clarity on Program costs and, similarly, considers these against relevant benchmarks and model the impact of changes to the cost structure on Program viability.

    Together, the two papers aim to provide co-ops within formation about Program revenue and costs necessary for them to participate in important discussions about Program viability into the future.

    The papers will provide important background information for co-ops in advance of the Program Costs and Revenue Presentation and Q&A at the 2017 CEHL Conference on Friday, 18 August 2017.