Improving Housing ROI’s – Federal Budget Submission

We write to you as advocates for a fairer housing market. Australian land prices have increased by $2.7 trillion in just the last two years.

Since the 1999 halving of the Capital Gains Tax, land values have increased by 7.3 times.

The budget cannot afford this to continue with rental markets collapsing, single mums sleeping in cars and retirees finding refuge in caravan parks. The costs of a continued housing market failure continue to mount. 

The typical housing development model appears unable to deliver a product that meets the needs of the bottom two quintiles of Australian society. Land prices over the pandemic era increased without pressure from immigration, reflecting how land prices always take the gains from income support and interest rate cuts. 

With societal pressures building upon a demographic cliff, taxpayers need to ensure they are investing in the best value for money programs.

A better way is possible. 


Grounded is a new NGO established to advocate, incubate and accelerate the development of Community Land Trusts (CLTs) in Australia. This housing model recognises that rising land values occur as the community develops.

In order to maximise the public interest, a closed loop should be encouraged between community development and house (read: land) price inflation – where politically possible. With the significant influence of property interests at all three tiers of government, a micro loop can be closed within a Community Land Trust. 

The CLT acts as a custodian of the land, ensuring that it remains perpetually affordable. In its purest form, the CLT model gives residents an advantage in that they only have to borrow for the housing component. Our preferred CLT model sees a modest yearly land rent paid to the Trust as recompense for land access. This saves the resident thousands in interest on the land component. Importantly it can also reduce the deposit barrier by some 50 – 70%. This is exactly what younger generations require.

Upon sale of the home, a share of the capital gains is paid to the Trust (known as a resale formula), ensuring that short term profit making is deterred. A covenant is then placed on the land and home to ensure the price remains at say 70% of the median market price. 

When including income distribution, health and wellbeing outcomes, the return on investment (ROI) for UK CLTs has been found at 3.1:1 over 30 years. These are significant returns that the Australian community deserves, reducing budgetary pressures. 

US CLT’s have proven themselves as stable housing providers. After 50 years of operation, CLTs now pay little to no Loan Mortgage Insurance as the lease to valuation rate is often lower than 80%. Additional factors contributing to Fannie Mae’s support of CLTs include the lower foreclosure risk, coming in at 90% lower than the wider market. 

We are calling on the Federal government to seed the capability of CLT’s throughout the many institutions of government. 

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