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Mark Fowler, Partner e. mfowler@prolegis.au w. prolegis.au

So Much Housing Innovation: What’s Charitable and What’s Not?. CLAANZ Conference 2018, Melbourne 2 August 2018. Mark Fowler, Partner e. mfowler@prolegis.com.au w. www.prolegis.com.au. Charities Act 2013. CIS says: The purpose of advancing health (s.12(1)(a))

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Mark Fowler, Partner e. mfowler@prolegis.au w. prolegis.au

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  1. So Much Housing Innovation: What’s Charitable and What’s Not? CLAANZ Conference 2018, Melbourne 2 August 2018 • Mark Fowler, Partner • e. mfowler@prolegis.com.au • w. www.prolegis.com.au

  2. Charities Act 2013 CIS says: The purpose of advancing health (s.12(1)(a)) The purpose of advancing social or public welfare (s.12(1)(c)), and Any other purpose beneficial to the general public that may reasonably be regarded as analogous to, or within the spirit of, any of the purposes mentioned in paragraphs (a) to (j) (s.12(1)(k)). The CIS is subject to the law and changes in the law. Are there any other relevant charitable purposes for housing providers?

  3. Advancing social or public welfare (s.12(1)(c)) • Relieving the poverty, distress or disadvantage of individuals or families (s.15(1)); • Caring for and supporting the aged or individuals with disabilities (s.15(2)); and • Caring for, supporting and protecting children and young individuals (s.15(3)). • CIS: ‘Poverty does not mean destitution, but an inability to provide, from within one’s own resources, a modest standard of living in the Australian community. In the context of housing, relieving poverty therefore is the provision of housing assistance to those who cannot afford, from their own resources, such accommodation as would give them a modest standard of living in the Australian community.’ (Ballarat Trustee Executors and Agency Co v Federal Commission of Taxation (1950) 80 CLR 350, 385.

  4. Affordable Housing? • Definitionalissues • Ontario standard: the lowest 40% on income paying 30% +on accommodation • 35%+ of income standard • Guinness Trust (London Fund) Founded 1890, Registered 1902 v Green [1955] 1 WLR 872, 875 (DenningLJ): • ‘working classes’ = ‘lower incomegroup’ • ‘The people in the buildings provided by the trust include dockers from Bermondsey, railway workers at Vauxhall, office cleaners and dustmen in Chelsea, and furniture hands inShoreditch’

  5. Affordable Housing? • 2008 Senate InquiryReport • Extension of Charitable Purposes Act andNRAS • Wayne Swan’s letter to CHFA 14 January2010 • N&T Submissions to 2015 Senate Inquiry Report • Queenstown Lakes Community HousingTrust • Nationalmedian • Localfactors

  6. CIS: Relieving poverty relevant factors • Income and assets • Any specific disadvantage or distress suffered (for example, a person escaping domestic violence needing refuge or crisis accommodation) • Eligibility for government assistance relevant to the relief of poverty or disadvantage (for example, social security payments, rent assistance, or access to public housing) • The number of dependants and the needs of those dependants • The cost of providing the other necessities of life

  7. CIS: Relieving poverty relevant factors • Geographical location, and their need to obtain accommodation in that location. ‘the local or regionalcontext, rather than a national average relating to income, cost of housing and housing availability, may be taken intoaccount’cfQueenstown Lakes • Cost of accommodation in thatarea • Availability of accommodation in that area,and • The income required to acquire and maintain accommodation in thatarea.

  8. Other Heads and Analogous Purposes Beneficial to the General Public (s12(1)(k))? • CIS example: ‘accommodation offered to ex-offenders or ex-prisoners, including prisoner half way houses.’ • Health (s12(1)(a)) • Education (s12(1)(b)) • Stable, mixed income communities (s 12(1)(f))) • Human rights (s12(1)(g)) • Advancing the natural environment (s12(1)(j)) • Key workers & ‘the purpose of advancing the security or safety of Australia or the Australian public’ (s12(1)(h))?

  9. Promoting reconciliation, mutual respect and tolerance between groups of individuals that are in Australia section 12(1)(f) • UK Joint Guidance: ‘some LCHO [low cost home ownership] schemes may promote mixed development as a more effective way of relieving poverty or need, for example by preventing a high concentration of very poor families in one place’ • 2008 Senate Inquiry: • ‘Affordable housing is commonly viewed as essential to the maintenance of a cohesive and just society.’ • Common Equity Housing Ltd v Commissioner of State Revenue (1996) 33 ATR 77: • ‘The plaintiff emphasises that it is necessary to achieve "cohesive co-operatives with a reasonable mix of skills and social backgrounds''.’ • Queenstown Lakes (MacKenzie J): • ‘Purposes which are directed to the composition and social cohesion of a particular community are capable of falling within the fourth head, by analogy with gifts for the benefit of a locality, and with the promotion of urban and rural regeneration.’

  10. Human Rights (s12(1)(g)) • UNDHR Article 25: • Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. • International Covenant on Economic, Social and Cultural Rights Article 11 • The States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions.  • 2008 Senate Inquiry: • ‘Access to appropriate, affordable, housing is a fundamental human right, which “is essential for individual, family and community wellbeing”.’ • Helena Partnerships

  11. Human Rights (s12(1)(g)) • Burgess & Anor v Director of Housing & Anor [2014] VSC 648, 17 December 2014 (Macaulay J) • Rights under Charter of Human Rights and Responsibilities 2006 (Vic). • Imposed on public authorities • Director failed to give proper consideration of human rights • Protection of the family group (found) • Protection of best interests of the child (found) • Right not to have family or home ‘unlawfully or arbitrarily interfered with’ (unnecessary to decide) • The decision to seek the issue of a warrant was unlawful.

  12. Human Rights (s12(1)(g)) • Goode v Common Equity Housing Limited (Human Rights) [2016] VCAT 93 21 January 2016 (Nihill DP) • Under the Charter ‘public authority’ includes: “An entity whose functions are or include functions of a public nature, when it is exercising those functions on behalf of the state or a public authority (whether under contract or otherwise)” • CEHL exercised functions of a public nature, due to: • the receipt of capital grants, • the government obligation to provide social housing and • CEHL being subject to a detailed regulatory regime under the Housing Act 1983 (Vic). • CEHL was exercising functions on behalf of the State due to: • alignment of policy objectives of Housing Act and CEHL’s purposes. • whether an agency relationship at law or whether an actual agreement was in place was irrelevant.

  13. Analogous Head? (s 12(1)(h)) Key Workers • Health, education, and ‘the purpose of advancing the security or safety of Australia or the Australian public’ (s12(1)(h))? • Joint Guidance: ‘it can be charitable to provide housing for key workers, for example, teachers or health workers, where there is a need for the charitable service that the key worker will provide, which have been created by shortages of such workers due to the difficulty of affording accommodation in the area’

  14. Analogous Head? (s 12(1)(h)) Key Workers • UK Joint Guidance examples of public or voluntary sectorsthat: • advanceeducation, • relievesickness, • promote public health, • relieve charitable need, • protect human life andproperty, • promote the sound administration of the law,or • advance other charitable purposes for the general benefit of the community, including: • the maintenance for the benefit of the community of its infrastructure, including supplies of gas, water, electricity and food, of transport and other means of communication, • of telecommunication information and information technologyservices, • and of emergency services.

  15. Commercial Activities – Other Examples Commissioner's Interpretation Statement: Conducting Property and Tenancy ManagementServices Constructing new housing with an intention to sell a proportion of it to fund the acquisition of housing which is then made available to those in need of charitablehousing Entering fee-for-service arrangements in the area of propertymodifications Entering into partnerships or joint ventures with private companies, such as credit unions or property developers, to acquire or develop affordable housingstock. Activities separate from the provision ofhousing

  16. Post 2014 Activities Shared equity: • CIS: It is possible that a charity could operate rent-to-buy or shared equity housing purchase schemes. However, such housing schemes would be assessed on a case-by-case basis to ensure that the solely charitable purpose of the charity remains. • UK: HMRC & Charity Commissioner’s Joint Guidance 2009 identifies a spectrum between ‘those who are too poor to cope with home ownership and those whose income is too high to qualify for assistance … between these extremes are those proper beneficiaries whose needs may be best met through the offer of a home forsale’ Managed Investment Trusts investment in affordable housing National Housing Finance and Investment Corporation Superannuation fund investment, eg HESTA and Horizon Housing Ltd Social Impact Bonds Public private partnerships Special purpose vehicles Public housing stock transfers

  17. Relationships with Government • Re returning assets to State or TerritoryGovernments • CIS: ‘In the event of such a requirement, the Commissioner will treat the charitable housing provider as charitable on condition that the winding up clause in the governing documents makes explicitthat: • assets required to be returned to the government on winding up by State or Territory law or contract, will be returned; • other remaining assets will be distributed to a charity with similar charitablepurposes.’

  18. Mark Fowler, Position Prolegis Lawyers Level 6, 75 Miller Street, North Sydney NSW 2060 t. (02) 9466 5222 e. mfowler@prolegis.com.auw. www.prolegis.com.au

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