Real estate is the next sector being disrupted by the social enterprise model, with Melbourne-based Property Initiatives offering a full service real estate agency that promises market returns, fully vetted tenants and, according to agent in charge Kristie Looney, the same level of service or better than commercial agencies.
The only difference is that the agency isn’t in it to make investors rich. Instead, all profits are directed to not-for-profit Women’s Property Initiatives, which owns and runs close to 70 affordable housing properties for women and children that are homeless, marginalised and often escaping domestic violence, Ms Looney told The Fifth Estate.
The idea has piqued the interest of major developers. One early adopter is Grocon, who has partnered with Property Initiatives on its Bouverie Street apartment complex in Carlton, in inner Melbourne.
According to Grocon, the decision to give property management duties to Property Initiatives was a “no-brainer”.
Grocon project general manager Leon Hechtman told The Fifth Estate Property Initiatives were invited to submit an expression of interest to manage the Bouverie Street apartment complex, along with a number of commercial agencies.
“Their presentation and submission was first class,” Mr Hechtman said.
While the agency was competitive without the social benefit, the alignment with one of Grocon’s core values of providing community benefit made it hard to pass up.
“It wasn’t a difficult decision.”
The hope is that with the success of Property Initiatives, even more housing stock will be able to be built for women in need.
Property Initiatives follows in the footsteps of social enterprises that tie their product to their purpose, such as toilet paper company Who Gives a Crap?, half of whose profits go to sanitation projects in the developing world.
Ms Looney initially worked for Women’s Property Initiatives, with Property Initiatives the outcome of wanting to generate a solid revenue stream for the housing provider, in an environment where federal and state government funding for affordable housing is severely lacking and uncertain.
The company has been backed by Social Traders, a company that helps build the investment-readiness of social enterprises. It was launched at the end of March 2015, and currently has a rent roll of 60 properties, soon to be boosted to 130 by 1 July, Ms Looney says.
Ms Looney told The Fifth Estate the company would break even in two months from now and from there could start to put money into funding new homes. She is hoping that five homes can be built over the next five years.
“Once we are well established and the number of properties we manage grows, we hope to accelerate the number of homes we provide each year.”
An example of a WPI development underway is at Reynard Street in Coburg, where seven one-bedroom and two-bedroom double-storey townhouses will be built on land purchased from Moreland Council.
Property Initiatives is currently looking to add more properties to its rent roll within 10km of the Melbourne CBD.
See propertyinitiatives.com.au for more information.