Build to Rent

Kevin Cox
4 min readNov 15, 2022

On the 15th Nov 2022 the ACT Government issued a Request for Proposal for Build-to-Rent Affordable Rental.

The proposal says:

Affordable Rent means for each Affordable Rental Dwelling an amount that is less than 75 per cent of the Market Rent for the Dwelling.

The minimum Number of Affordable Rental Dwellings means the minimum number of Affordable Rental Dwellings that will be considered as part of this RFP. The minimum number is at least 10 Affordable Rental Dwellings and at least 15 per cent of Development Dwellings over a period of at least 15 years.

The following outlines the benefits to the Community of occupants and investors if the developer finances construction with Community Capital Markets.

A developer might choose to use Equity, Loan, or Community Capital. Say Equity finance wants a 10% return on investment in perpetuity, Loan finance 8% over ten years, and Community Capital a 10% inflation-adjusted annuity over twenty years.

  • Equity and Loan Capital will require the ACT government to subsidise the 15% of 75% affordable housing with tax concessions.
  • Community Capital will require no tax concessions and supply 100% dwellings as 50% ACT government-defined affordable housing.
  • The ACT government can participate if it wishes in the 10% inflation-adjusted annuity over twenty years by converting the land value as shares of Community Capital.
  • Suppose the development costs $100 Million to build. In that case, Community Capital will make more than $10 Million of Capital available each year for further investment to benefit the Community of occupiers and investors.

Where does the money come from?

The money comes from a better algorithm for moving Capital. Capital is a human invention with government rules within which it works and accounting rules (algorithms) for distributing and investing. The accounting rules change the costs and rate of investment but must fit within the government rules. The rules for Community Capital reduce the cost of investing to near zero and stops Capital from stagnating.

The change is to buy Capital from an investor each time a buyer purchases goods and services. Hence Community Capital moves from one party to another with each payment and has the following benefits.

  • It removes the need for a separate expensive real-estate market for the dwellings. The dwellings become part of a permanent market.
  • Moving Capital at the time of payment means the Capital value is accurate because the return on Capital is fixed.
  • Moving Capital quickly reduces the time invested and reduces the cost of investment.
  • Keeping Capital within a market saves transfer costs.

Reducing costs eliminates unnecessary work. The people doing the unnecessary work can potentially do other things, but all can benefit as everyone needs a home.

Does Community Capital work for Investors?

With Equity Capital, investors typically get an indexed 5% return on investment because they reinvest some of their return to cover depreciation and maintenance. With Community Capital, investors get 5% of their Capital and a 5% return on existing capital each year. They can reinvest their returned Capital immediately. The Capital released goes to the occupants who pay rent.

Can we Refinance Existing Dwellings with Community Capital?

The owners of any group of dwellings can come together and refinance their homes. The same benefits of community ownership with occupant custodianship apply if they do. The savings in financial charges from combining the asset value of the group and negotiating together are real and substantial.

Each individual household sells its property to a community entity that will accept them, and the community negotiates separately with mortgage holders and occupiers. In most cases, the existing lender will transfer the mortgage to the community and change the interest rate to the community rate. Within the community, the existing equity of the occupants is available for internal transfer at no cost to the community.

Benefits to Society

The unequal distribution of wealth (Capital) in society leads to a loss of Social Capital and trust. Community Capital transfers wealth to buyers each time they pay for products making all buyers Capitalists. More importantly, buyers get a voice in investment decisions and tend to look for investments that lower prices from productivity improvements.

Capital becomes locally democratised. Capital democracy leads to political democracy from the bottom up. With many buyer-owned shares, governing boards will experiment with sortition, compulsory voting, and multi-member electorates.

Prices will stabilise. If they increase due to increased demand or supply shortages, buyers will share the Capital increase. If prices drop due to over-supply or productivity improvements, buyers will keep prices the same and transfer Capital to other areas.

Governments at all levels can achieve these outcomes without regulation or compulsion as communities become wealthier with Community Capital.


Money and Capital are human inventions that allow us to share knowledge and resources to survive. Because they are inventions, we can agree to change the rules around their operations. Ownership Capital Markets is the traditional way to transfer Capital, but it is expensive and ties up Capital.

Community Capital Markets allow buyers to share the increase in Capital Value, reduce the cost of transferring Capital, and increase the rate at which Capital becomes available for reinvesting or spending. It makes existing Capital more productive and the money saved is shared between investors and buyers.



Kevin Cox

Kevin works on empowering individuals within local communities to rid the economy of unearned income.