Risks and benefits of shared ownership 'Shared ownership' is used in this report as an umbrella term for a range of housing models where ownership of a dwelling is divided between a person who lives in the house and a 'non-person' equity partner. Shared ownership models enable consumers to access and sustain home ownership, even though they have lower income and savings than those that are typically required to afford a loan deposit and repayments. Shared ownership - including shared equity and mixed equity models - is considered to be one of several housing policy options that can help address unmet need in affordable housing and barriers in entry to home ownership for people with disability. The report considers the potential for expansion of shared ownership in Australia, and the particular models that would be most appropriate and beneficial for people with disability. It draws on a review of existing grey and scholarly literature, as well as interviews with housing providers and disability advocacy groups, most selected across five case studies of shared ownership programs in Australia. Shared ownership has several potential benefits. It can enhance housing choice, security of tenure and sense of ownership. In addition, capital investment by people with disability and their families into shared ownership is expected to reduce the overall cost of housing assistance required by government to overcome the supply gap. At the same time, some models of shared ownership can expose people to the risks of debt in a volatile housing market, and could potentially add to inflationary pressures in an already heated housing market in some Australian cities. Shared ownership models are still considered complex products not well understood by consumers, lenders and policy-makers. Shared ownership by people with disability Existing literature on shared ownership in Australia and elsewhere offers little information about the benefits and risks of such models for people with disability. Many people with disability experience circumstances that could affect their capacity to enter, sustain and benefit from shared ownership, including: •low income and other barriers to finance home purchase (e.g. legal capacity for people with cognitive disability) •willingness and capacity of families of some people with disability to assist with the capital investment necessary to enter shared ownership •requirements for accessible housing design •availability, or lack thereof, of disability support services •restricted access to National Disability Insurance Scheme (NDIS) funding for Specialist Disability Accommodation (SDA) or home modifications in mainstream housing. Shared ownership models for people with disability Recent house price growth - especially in Sydney and Melbourne - has seen home ownership slipping even further away from reach for low- and moderate-income households, including people with disability. This highlights the urgent need for new forms of housing assistance. At the same time, current market conditions potentially undermine the viability of shared ownership in many parts of the eastern states, unless the increased property price is fully absorbed by government or equity partners rather than shared owners. Nevertheless, within appropriate policy settings, a number of specific cohorts of people with disability could still potentially benefit from shared ownership. The report highlights four generalised shared ownership models that could potentially be scaled-up to address distinctive policy objectives and target groups. •A shared equity model targeting people with disability with moderate household incomes, who can afford the combined ongoing costs of mortgage repayments and property ownership outgoings. Such schemes could be appropriate for people with disability with secure moderate incomes currently residing in the private and social rental sectors. The aim of such schemes would be to assist transition from insecure private rental to full or part home ownership and to vacate social housing tenancies for higher need applicants. Compared to other shared ownership models, shared equity exposes shared owners to higher levels of risk, and therefore requires careful targeting and risk mitigation strategies. •A restricted-resale shared equity model, similar to the one described above, but with restrictions on the price and conditions of resale to ensure retention of affordability for future generations of shared owners, as well as social inclusion outcomes for people with disability where such models also involve community development objectives (at the expense of more limited prospects of staircasing1 into full ownership). •An individual mixed equity model, where shared owners make a capital contribution for the purchase of a property, but are not named on title and reside in the dwellings under lease conditions that resemble those in social housing. Such a model would target people with disability with low income but moderate assets, including their own savings and funds gifted by family members. The individual mixed equity model combines the advantages of social housing with those of home ownership: affordability, choice, security of tenure and sense of ownership. •A group mixed equity model, where relatively small equity contributions from several co-residents are combined with public funding. Group housing models can be problematic for people with disability, regardless of equity mixing or sharing, and new group mixed equity models would require innovations to ensure choice and control for shared owners (e.g. choosing their co-residents; control over their privacy and space; clear rules and pathways for shared owners leaving or joining). All four models could potentially be applied to SDA funded in part by the NDIS. However, SDA funds would need to be structured accordingly, either as direct payments to shared owners in shared equity models (to enable borrowing for their share), or as payments to equity partners for mixed equity models, where co-owners are not expected to carry any debt. Ways forward Prospective shared owners are often not eligible for other forms of housing assistance. This means that shared ownership programs increase the pool of recipients of housing assistance, thus potentially increasing its cost or reducing its effectiveness. To justify public investment in shared ownership models, government and the not-for-profit sector would need a more comprehensive housing policy framework that specifies the discrete role of different housing assistance products within the so-called 'housing continuum'. In addition to substantial public funding to be invested in shared ownership schemes, a range of other policy interventions would be needed if shared ownership by people with disability were to be scaled up in Australia. •Establish government-backed agencies, similar to Keystart (Western Australia) and HomeStart (South Australia), in other states and territories (particularly Victoria and New South Wales), to offer affordable and inclusive finance. Review and clarify shared owners' eligibility for Commonwealth Rent Assistance (CRA), the First Home Owner Grant and NDIS SDA funds to ensure consistency and predictability. •Review stamp duty, Special Disability Trust and pension eligibility rules to identify and remove potential barriers to unlocking housing wealth and gifting of funds by families of people with disability. •Fund independent advocacy and asset/financial planning for people with disability and their families.