Affordable housing providers across Canada set to raise over $110 million in community investments
12 Agosto 2024 - 11:52AM
A group of at least 11 charitable, nonprofit and cooperative
housing providers across the country are using a financing tool
called community bonds to raise a collective $110 million from
everyday Canadians in their communities, creating or preserving
more than 3,000 units of affordable housing altogether.
The 11 organizations are supported by Tapestry
Community Capital’s Investing in Housing initiative, which is
funded by the Canada Mortgage and Housing Corporation (CMHC)’s
Housing Supply Challenge. Tapestry is a national nonprofit
providing consulting and administrative services to community bond
issuers. Community bonds are an investment opportunity issued by
nonprofits and cooperatives and purchased by both everyday
Canadians and institutional investors.
Tapestry is currently working with four housing
providers raising capital with a combined total goal of $9 million
($8 million raised to date) in community bonds, from the Kensington
Market Community Land trust preserving affordable housing in a
rapidly-gentrifying neighbourhood of Toronto, Ont. to Propolis
Housing Cooperative building new net-zero, affordable homes in
Kamloops, B.C.. The additional $110 million target by 11 new
organizations (with more to be announced) represents an over 1,200
per cent scale-up for the community bonds model among housing
providers. These campaigns are set to launch on a rolling basis
until March 2025.
This comes as the systematic exclusion of low- and
middle-income Canadians from access to affordable housing
intensifies. According to CMHC’s Spring 2024 Housing Market
Outlook, “growing demand for rental homes will not be met because
the cost of homeownership will lead households to stay in rental
housing.” Meanwhile, CMHC reports, “unfavourable financing
conditions are expected to make more new rental projects unfeasible
in 2024.”
Ryan Collins-Swartz, Co-Executive Director at
Tapestry, says: “Canada’s housing system isn’t designed to ensure
that everyone has a safe, affordable place to live. But the good
news is that more and more Canadians are recognizing this injustice
and looking to contribute to change. Community bonds are helping
them invest directly in more affordable housing for their
neighbours and earn a fair return in doing so. These community
investors are also offering housing providers access to affordable,
predictable funding — a rarity in the sector.”
Organizations set to raise the collective $110
million include:
- Redwood Park Communities: a Barrie, Ont.-based nonprofit
raising $10 million to create up to 146 new units of affordable
housing across Simcoe County.
- The Inclusive Housing, a new nonprofit subsidiary of
Toronto-based Spotlight Development, which plans to raise between
$15 million and $20 million to build more than 1,000 new units of
affordable housing across Toronto and Kitchener.
- Indwell, an Ontario-based affordable and supportive housing
provider has already raised $5 million and plans to raise
significantly more through its next campaign. Indwell’s Finance
Manager Nick van der Velde says: "Our current raise with the Hope
and Homes Hamilton Community Bond is going well and we see an
opportunity to expand and finance additional supportive and deeply
affordable housing in South and Southwestern Ontario. The Community
Bond has allowed us to engage our support community well and we are
interested in growing that."
- Winnipeg-based Inuka Community Inc., which is set to launch
Manitoba’s first-ever community bond campaign, a $3 million
campaign to finance the construction of a 60-unit development.
- Two land trusts, a model growing in popularity where nonprofit
organizations buy land to keep it off the speculative market and in
community benefit: Muskoka Community Land Trust and Hogan’s Alley
Society, who will raise a cumulative $12 million.
- The Housing Trust of Nova Scotia will be Tapestry’s first
affordable housing client in Atlantic Canada, raising between $5
million and $10 million.
- Vancouver-based Hogan’s Alley Society will raise capital to
provide culturally-informed housing to Black communities, as will
the African Canadian Affordable Housing Village Coop in
Toronto.
- United Way Perth Huron’s subsidiary United Housing plans to
raise $750,000 for the construction of 10 new units of affordable
housing, with a longer-term goal to raise up to $24 million over
several years.
- Central Ontario Co-operative Housing Federation, which supports
41 housing cooperatives and will soon raise capital to finance
three affordable housing sites of their own, with an emphasis on
investment from cooperatives in their network. COCHF’s Executive
Director Elana Harte says: “Community bonds closely align with the
cooperative housing sector’s values. COCHF chose to work with
Tapestry because our project needs flexible, low-cost,
community-rooted funding. On the other side of the equation, we
plan to engage cooperatives as investors – offering them a low-risk
investment opportunity and fostering cooperation among cooperatives
themselves, all for more affordable housing.
- Habitat for Humanity Victoria, Tapestry’s first affordable home
ownership project (other issuers focus on rental housing) in
Victoria, B.C.. The organization will raise between $3 million and
$4 million toward a 14-unit stacked rowhouse development.
- More community bond issuers are to be announced.
With funding from the CMHC Housing Supply
Challenge, Tapestry has upped its capacity to support these
organizations with larger community bond raises, including by
redeveloping its digital platform for administering community
bonds.
Gracen Johnson, Senior Specialist, Innovation and
Research, Canada Mortgage and Housing Corporation, says: “Through
the Housing Supply Challenge, Tapestry was twice recognized by
industry peers for its potential to scale community bonds with real
impact. In Round 2, they expanded their capacity and infrastructure
to apply community bonds across a broad portfolio of housing
projects. As semi-finalists in Round 5, they’ve continued to build
momentum and raise community capital. We look forward to watching
them continue their innovative work.”
About community bonds
Community bonds are similar to a traditional bond,
but instead of being issued by governments or corporations, they’re
issued by nonprofits and cooperatives to fund socially- and
environmentally-conscious projects. They’re a flexible,
self-determined way for organizations to raise capital, since
issuers set the investment terms that work best for their project
rather than needing to accept commercial lenders’ terms. On the
other side of the equation, community bonds enable everyday
Canadians to support important projects in their communities while
earning a fair return.
For affordable housing
providers, community bonds can:
- Help fill financing gaps — for example, there are few other
funding paths to cover pre-development costs like buying land,
having architectural plans drafted, and legal fees.
- Build community support for more affordable housing —
affordable housing providers can grow their network of supporters
by offering their communities investment opportunities.
- Contribute to local economic development — by offering returns
to everyday community members rather than big banks, community
bonds build community wealth, indirectly helping to end the housing
crisis.
About Tapestry Community
Capital
Tapestry is a nonprofit organization that supports
community bond issuers across Canada. While Tapestry focuses on
affordable housing, it also supports nonprofits and cooperatives in
raising capital to purchase community arts venues, build
community-owned renewable energy infrastructure, and more. Launched
six years ago, to date Tapestry has helped issuers raise over $110
million from more than 4,000 community investors — this next
wave of community bond campaigns for affordable housing providers
will double Tapestry’s reach. Learn more at tapestrycapital.ca.
About the CMHC Housing Supply
Challenge
The Housing Supply Challenge is a $300-million
commitment over five years, which invites citizens, stakeholders
and housing experts to propose solutions to the barriers to new
housing supply. Most recently, CMHC announced Round 5 of the
Challenge, which aims to increase the adoption of transformative,
system-level solutions that enable the quicker delivery of both
community and market housing. Learn more on the CMHC website.
Media contact:Kylie Adair
Communications Lead, Tapestry Community Capital
kylie@tapestrycapital.ca 613-601-5636