(image via House With No Steps)
Shared home ownership schemes for people with disability involve risk as well as benefits, a new report has concluded.
In its latest report, the Australian Housing and Urban Research Institute concluded that shared home ownership models have the potential to deliver financial sustainable home ownership for people who have disabilities.
But it warns that such schemes may also expose those people to risks in a number of areas.
As well as becoming trapped with insufficient equity to move elsewhere (e.g. to follow employment and educational opportunities) if there are large changes in house prices, there are risks associated with contractual obligations to equity partners and/or lenders.
These include having to pay for repairs required by the equity partner or being restricted in their ability to rent the home out to others if necessary.
Also, some scheme require the householder to pay rent to the equity partner to cover the equity partner’s share of the property.
“Shared ownership can work very well for some people in some areas, but be ineffective for others who will continue to require other forms of housing assistance such as social housing,” Social Policy Research Centre and report co-author Karen Fischer said.
Flagged in recent discussions as a potential way in which to assist low income households to sustainable home ownership, shared home ownership schemes involve low income households becoming home owners through sharing ownership with an external equity investor – usually a state based agency or a non-government organisation.
Whilst such schemes can be applied to moderate or low income earners of all types, the report looked at a number of models which it said may be well suited to those with disabilities.
These include:
- Shared equity, where both the owner and the equity partner are registered on title as tenants in common.
- Community land trusts, which involve a not-for-profit organisation holding title to multiple parcels of land on which buildings are owned by individuals
- Shared equity loans, which are similar to shared equity except that equity is shared between the equity partner and the lender.
It is thought that opportunities to apply some of these models will increase for those with disabilities as part of the NDIS rollout.
Aside from those referred to above, Fischer said a further area of risk involved people with disability being encouraged or even pressured to invest significant family or personal assets in such schemes.
As a result, she said that importance of independent advocacy and financial planning for those involves along with their families cannot be underestimated.
