Rare century-old Mildura housing scheme directs lease revenue to local schools

In Victoria's tropical north, where the Murray River winds, a select group of houses are selling for half of what you'd expect.It's got nothing to do with changes in the housing market and can trip up even the most savvy investor.The unusual house prices are thanks to the 140-year-old legacy of two Canadian engineers who decided education should be the benefactor of their entrepreneurial endeavours.Mildura's founders set aside one-fifteenth of the town's available land to generate funds for education in the region. (ABC News: Sarah Buchecker)Mildura's college lease scheme is unique.No other Australian town has one.In the citrus capital, 184 lots are leased to individuals and organisations instead of being sold freehold.Basically, someone can own the improvements but not the land itself.Officially, the land is owned by the Victorian education minister.Revenue from the lease agreements goes directly to schools in Sunraysia, which use the funds to buy new classroom equipment and technology that they would otherwise go without.A Department of Education spokesperson said the Mildura Schools Land Trust disburses about $1.95 million annually to 27 primary and secondary schools, providing additional funding that benefits more than 9,000 students.Canadian engineers William B Chaffey and George Chaffey founded the township of Mildura. (Supplied: Chaffey Trail)A lofty dealIn 1886, the Victorian government signed a deal with Canadian engineers George and William Chaffey to build the Mildura irrigation settlement.Historian and former primary school principal Bob Walton said the Chaffey brothers set aside one-fifteenth of available land to generate funds for an agricultural college, although this was never built.Instead, a local high school became the first to benefit from the lease funds."They decided to set aside and not sell some of the allotments in the colony," he said."The Chaffeys were very interested in education."Mr Walton said the Chaffey brothers were inspired by a similar scheme in California, their base before coming to Australia.'Cheap' prices grab buyer attentionCollege lease properties often appear in real estate listings for what, at first glance, seem like a bargain price.One home recently sold for a reported $300,000 on Mildura's Lemon Avenue where, across the road, a similar freehold property fetched almost $550,000 two months earlier."Obviously, there's lease land for other things, but not like this. This is very unique," Ray White Mildura managing director Damian Portaro said."It's interesting having to explain to a buyer from Melbourne or Sydney exactly what this is."It's 100 years old now, this system. It was probably ahead of its time back then, but I haven't seen it or heard of it anywhere else."Agent Damian Portaro says investors are drawn to college lease homes. (Supplied: Ray White Real Estate)Mr Portaro said the property listings appealed to first home buyers, but they often ran into difficulty obtaining finance due to the unusual lease clause.He said most buyers of college lease land were investors rather than owner-occupiers."They might get in for half the price, for example, then they start factoring in 'there's rates, there's insurances, there's a college lease I have to pay.'"Unlocking housing supplyMallee Accommodation and Support Program (MASP) has utilised the scheme to build social housing on five college-lease properties with assistance from Homes Victoria.Charmaine Calis is the CEO of MASP, which has built social housing on five college lease properties. (Supplied: MASP)"We see it as a really good way to have two social goods out of the one block of land — both continuing to support local schools and also building social and affordable housing onto it," chief executive Charmaine Calis said.MASP told a parliamentary inquiry last year the Victorian government should look at more ways college leases could ease the housing crisis."We do need to increase the supply of housing available, and this is certainly one way we can look at doing that," Ms Calis said.