Rare century-old Mildura housing scheme directs lease revenue to local schools
Back when settlers were establishing new rural communities, they used college lease schemes to fund schools.
Mildura, a city in north-west Victoria, is the sole Australian town where a century-old college lease scheme continues to operate. This initiative involves leasing 184 blocks of land to generate funds for local schools. Some housing experts suggest that this model could be replicated in other regions to enhance housing affordability.
In Victoria's tropical north, properties leased under this scheme are selling for approximately half of their market value, a phenomenon that has left even experienced investors perplexed. The reason behind these inexplicably low prices lies in the 140-year-old legacy of two Canadian engineers who envisioned education as the beneficiary of their entrepreneurial efforts.
Distinct from typical housing transactions, the Mildura college lease scheme allows individuals and organizations to own only the improvements on the land, not the land itself. The Victorian education minister officially owns the land, with revenue from lease agreements directly allocated to schools within the Sunraysia region. This allocation supports the purchase of new classroom equipment and technology, which these schools would otherwise be unable to afford.
The scheme disburses approximately $1.95 million annually to 27 primary and secondary schools, benefiting over 9,000 students. Established in 1886 when the Victorian government signed a pact with Canadian engineers George and William Chaffey, the scheme initially earmarked one-fifteenth of the available land to fund an agricultural college, though this never came to fruition. Instead, a local high school became the first beneficiary of the lease funds.
Historian and former primary school principal Bob Walton explains that the Chaffey brothers, inspired by a similar scheme in California, set aside lands for educational purposes. Ray White Mildura managing director Damian Portaro notes that these properties are often listed at prices that appear unusually low at first glance. For instance, a home on Lemon Avenue recently sold for $300,000, while a similar freehold property on the adjacent road fetched nearly $550,000 just two months earlier.
Despite the appeal to first-time homebuyers, Portaro highlights the challenges potential buyers face due to the unique lease clause, which includes additional costs such as rates, insurance, and the college lease itself. MASP, a program that has utilized this scheme to construct social housing on five college-lease properties, advocates for broader adoption of this model to mitigate the housing crisis.
They argue that integrating social housing and affordable housing into existing college lease properties could significantly contribute to increasing the overall housing supply.
Written by urgent.news from ABC News AU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
