Developer’s ‘deferred second mortgage’ model getting people out of public housing

There are 82,000 names on Victoria’s public housing waiting list and it’s growing by 500 names a month.

There’s simply not enough public housing stock to meet the demand, but there’s also not enough opportunities for people to leave public housing.

And if people aren’t leaving, there’s nowhere for new tenants to move in.

It’s that quandary that got one Melbourne-based property developer thinking about how he could help.

He came up with a plan that Melbourne University post-doctoral research fellow Dr Kate Raynor has dubbed the “deferred second mortgage”.

In this model a developer builds an apartment block and splits the cost of each apartment into two parts.

About 63 per cent of the sale price will cover the developer’s costs — which includes land, construction and financing — and this is the mortgage that former public housing tenants take on through a normal lender.

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