Boomer Bonds: How To Create Affordable Housing in Australia

(Yep, one of those.)

This post is a proposal, not a product. Boomer Bonds don't exist. The point is to start a conversation about a long-term way to create affordable housing in Australia that gets the generations working together instead of fighting over the same houses. Nothing here is financial advice.

I've previously criticised models like build-to-rent as short-sighted answers to a systemic problem. This is my attempt at a constructive alternative.

Our solution is different by design.

Leaving land development almost entirely to private companies hasn't delivered. Public land, owned by taxpayers, should be used for the collective good, and public-private partnerships with real accountability can do it. It isn't glamorous, but it harks back to the ambition of post-war social housing, much of which is better than today's project-builder offering. Tie that housing to local manufacturing and services and it can also help reverse decades of offshoring.

I'm not opposed to migration. I do think a temporary slowdown would give supply the breathing room it needs to catch up, which would make a real difference to affordability.

Why we need a new approach

Home ownership has drifted out of reach for a lot of younger Australians, and the gap between generations keeps widening. ABS figures for 2019 to 2020 put average weekly housing costs at $493 for owners with a mortgage, $54 for owners without one, and $379 for renters. Those who don't own are falling further behind.

People are also split on what they actually want. An Australia Institute poll in November 2024 found:

36% of Australians want property prices to fall.
33% want them to rise.
60% of renters want prices to fall.
59% of investment property owners want prices to rise.

That's the problem in a nutshell. Many Boomers rely on rising property values for their retirement. Many Millennials and Gen Z can't get in because prices have run away from incomes. Both positions make sense from where each group is standing, and they pull in opposite directions.

Boomer Bonds try to line those interests up:

Boomers get a secure return on their property equity.
Younger Australians get an affordable, sustainable path to owning a home.

What are Boomer Bonds?

A Boomer Bond would be an investment that funds affordable housing built on land held by a Community Land Trust (CLT). Investors, mostly Boomers drawing on the equity they've built, buy bonds secured against the CLT's land. The money builds modular homes and the infrastructure around them.

The bonds would be pooled and turned into Real Estate Backed Securities (REBS). An asset-backed security is one whose income and value come from a pool of underlying assets. Pooling lets assets that can't easily be sold one at a time be sold to investors as shares of the whole, a process called securitisation. It spreads the risk and lets investors trade their holding.

In this model:

Investors receive a fixed annual yield (6.5% in the example below) plus a small share of resale profits.
Home buyers pay only for the house, not the land, and pay it off over 20 to 25 years.
The state government contributes the land and provides a first-loss guarantee on 10% of the bond value to reduce investor risk.
The CLT owns the land permanently, keeps a share of resale profits and reinvests it in the community.

Moveable homes on leased land

The homes would be treated as moveable property (chattels) rather than real estate. The land stays with the CLT. Owners can sell or transfer their home, keeping 80% of the resale profit while 20% goes back to the CLT.

This isn't a free pass on quality. A modular home on a CLT still has to be designed and built properly, oriented for the climate and built to passive design principles, so it's cheap to run as well as cheap to buy.

How the Community Land Trust works

The CLT holds the land for the community instead of as a speculative asset. That gives you:

Permanent affordability. Separating the land cost from the house cost keeps homes affordable over the long term.
Shared equity. Owners keep 80% of resale profits. The CLT keeps 20% to fund community improvements and future housing.
Community-led development. Residents decide how the land is used and managed.
Better places to live. Parks, communal areas and community gardens, planned in from the start. Lots of around 800 m² per home, not the lunchbox-sized lots the latest small lot codes allow.

Shared services

A CLT could run its own infrastructure, which keeps the cost of living down and keeps the money local:

Energy: community solar, batteries and microgrids.
Water: rainwater harvesting and onsite treatment.
Waste: composting and recycling handled onsite.
Jobs: residents employed or contracted to run these services.

The aim is to reduce reliance on outside providers and avoid the hefty management fees that come with corporate-run models like build-to-rent.

Self-governance

Each CLT would act as something like its own local council:

Residents vote on key decisions at regular meetings. One person, one vote, simple majority. No board with weighted votes.
Each CLT sets its own values and rules, whether that's sustainability, inclusivity or simply how neighbours treat each other.
Prospective residents accept those rules before they move in. If you don't agree, don't move in.

Communities would naturally differ from one another, and that's a strength. People can choose the one that suits them.

How the numbers could work

Here's a worked example for one 200-home community. The figures are illustrative assumptions, not a costed project.

Project costs

Land: 16 hectares valued at $20,000,000 (about 800 m² per home). Contributed by the state and held by the CLT.
Site infrastructure: $13,000,000 for roads, utilities and drainage. Funded by the state, as it would be for any new community.
Homes: 200 modular homes at $350,000 each, $70,000,000. Funded by Boomer Bonds.

So the bond fund needs to be $70,000,000, for example 280 investors putting in $250,000 each. That works out to about $350,000 of bonds per home.

What the investor gets

A $250,000 investment at 6.5% pays $16,250 a year.
Across the fund, that's $4,550,000 a year in interest.
Bondholders also get 10% of resale profits. If 100 homes are resold within 10 years at an average profit of $150,000, that's $1,500,000 over 10 years, or about $150,000 a year spread across all investors. That lifts the overall return to roughly 6.7% a year on these assumptions.

What the home buyer pays

The buyer is paying off a $350,000 house, not a house and land package. Repaying $350,000 at 6.5% over:

20 years is about $2,610 a month.
25 years is about $2,360 a month.

Add a modest ground lease to the CLT for land and shared services. That's in the same range as rent in many areas, except that at the end the buyer owns the house outright, and keeps 80% of any resale profit along the way. Compare that with build-to-rent, where every payment buys you nothing but the right to stay.

Those repayments are what fund the bondholders' interest and gradually return their capital. The land stays with the CLT, so the next buyer also only pays for a house.

What the CLT and the state get

The CLT keeps 20% of resale profits. Using the example above, that's $3,000,000 from 100 resales over 10 years, reinvested in the community.
The state gets permanently affordable housing on its land, local jobs, and a community that runs much of its own infrastructure. Its risk is capped at the 10% first-loss guarantee, $7,000,000 on a $70,000,000 fund.

The role of government

State governments would make or break this model:

Land: allocate public land to CLTs at concessional rates, and hold it in trust so it can't be land-banked by large developers.
Risk: provide the 10% first-loss guarantee that makes the bonds attractive to cautious investors.
Legislation: create the legal framework for chattel homes on CLT land, lease-to-own arrangements, and proper protections and disclosure for both investors and buyers.
Infrastructure: fund roads, transport and trunk services, as they do for any growth area.

Governments could go further and set up publicly owned utilities and insurers to serve CLTs: solar power, water, internet, maintenance and insurance for community assets. The profits stay in the public sector instead of going to private companies that charge more and answer to no one.

Queensland already has a model for this kind of thinking in QIC, the Queensland Investment Corporation.

Why aren't we setting up state-based development corporations with the same mandate?

Building local industry through housing

Housing is a market with endless demand. If we tie it to locally made materials, Australian service providers and state-run utilities, the benefits stay here: jobs, skills and a manufacturing base we've let drift offshore.

For that to work, private partners in these projects should have to keep their profits in Australia. No routing through foreign funds, trusts or low-tax jurisdictions. Pay their fair share of tax, reinvest in housing and manufacturing, and employ Australians.

Benefits for each group

For Boomers

A secured, government-supported investment with a fixed yield.
The ability to sell their holding on a secondary market.
A share in resale profits as the community matures.
No attack on negative gearing or super. This model rewards the equity Boomers have built instead of taking from one group to give to another. I don't mean blind, head-in-the-sand positivity either. Just a practical way forward instead of more doom and gloom.

For first-home buyers

No land cost up front.
Payments that buy a home, not just a roof for now.
80% of resale profits when they sell.

For communities

Green space, well-designed energy-efficient homes, and lower running costs.
Local control and local jobs.
Revenue that keeps funding the next stage.

For governments

More affordable housing and higher home ownership.
Construction and manufacturing jobs.
Limited, defined financial risk.

Addressing the obvious criticisms

Is it safe for investors? Boomer Bonds don't exist yet. In this model, risk would be reduced by security over the land and a government first-loss guarantee. Any real scheme would need proper regulation, audits and disclosure, and investors would need independent advice.

Won't developers fight it? Probably. Legislation that protects CLTs from anti-competitive behaviour, and a clear public-interest case, would help.

Is a moveable home legally workable? It would need clear definitions in law so lenders, councils and buyers all know where they stand. That's a legislative job, not a reason to give up on the idea.

Will buyers accept not owning the land? Some won't. For others, a much lower entry cost and a path to owning their house outright will be worth it. That's a choice they can make.

Do the revenue streams stack up? That depends on construction costs, interest rates and resale values. The numbers above are a starting point. Regular audits and transparent reporting would be essential.

What do you think?

Would you or your kids want to live in a community like this? Would you prefer government involvement or private corporate management? Do you see holes in it?

From conversations I've had, there are investors ready to back modular manufacturing and housing like this. What holds them back is confirmed sales. Investors want assurance that their money is secure and will deliver a reasonable return. This isn't about crypto-and-Lambo returns. It's about a measured, reliable return over time.

The easiest solution is usually chosen because it gets quick results. It's rarely the best one. Long-term problems need long-term thinking.

Boomer Bonds: A New Path to Affordable Housing and Community Growth in Australia

Why we need a new approach