In 1982, the Winkleigh Housing Co-operative was founded by a group of neighbours in Hamilton, Ontario. Their goal was to create affordable housing while building a community where members share common values and work to support one another.
They weren’t alone in their vision. Between 1973 and 1991, thousands of housing co-ops were set up across Canada with the help of federal funding programs. In exchange for mortgage financing, subsidies and grants, newly created co-ops entered long-term operating agreements with the Canadian Mortgage and Housing Corporation (CMHC), lasting from 30-50 years.
Guided by co-operative principles like inclusivity and co-operation, Winkleigh Co-op has since developed into a thriving community with 77-units of at-cost housing, managed democratically by its member-residents.
“Having a safe, affordable community is something everyone should have a right to,” said Kelly Jackson, the property manager for Winkleigh. “Members at Winkleigh co-op are proud of their homes and want to ensure that our units are still here for future members.”
Values-aligned financing to maintain and scale co-ops
Today, the co-operative housing movement is entering a new phase, as those original CMHC mortgages mature and operating agreements expire. For many co-ops, the transition to self-sufficiency has been a challenge, one made easier by a supportive financial partner.
With their own mortgage coming to maturity March 2020, Winkleigh Co-op turned to Vancity Community Investment Bank (VCIB) for support.
VCIB was able to provide Winkleigh with mortgage refinancing that met the community’s needs. As part of the financing, VCIB also helped the co-op leverage some of its equity to finance repairs and upgrades allowing it both maintain its building stock and affordability for member-residents.
“Securing a new loan with VCIB has enabled us to lower our mortgage payments and carry out improvements and upgrades that our members appreciate,” said Jackson.
As Director of Lending Caroline Rauhala explains, the motivation to support co-ops comes in part from the fact that VCIB is owned by one of Canada’s largest financial co-operatives, Vancity Credit Union.
“Vancity is a long-time supporter of the co-op movement in British Columbia,” said Rauhala. “While VCIB itself is not structured as a co-op, we’re a wholly-owned subsidiary of the credit union with a mandate to bring values-based banking to the rest of Canada. Partnering with co-ops like Winkleigh is one way we’re delivering on that mandate.”
Housing co-ops as a model for an equitable recovery
While the co-operative housing movement adjusts to change, its grounding in the principles of inclusivity, democracy and concern for community, are leading some to view co-ops as a model for the post-pandemic economic recovery.
“Co-ops have a lot to contribute to conversations about ‘building back better’ and how the recovery could address long-standing challenges like economic inequality,” said Rauhala, who oversees a commercial real estate lending team that focuses exclusively on affordable housing, green buildings and social purpose real estate.
Because co‑ops charge their members only enough to cover costs, repairs, and reserves, they can offer housing that is much more affordable than an average private sector rental. A unit at Winkleigh is available at approximately 67% of market rent for a comparable unit in the area. In addition, some members pay reduced monthly rent based on income.
Today, with so many people out of work, the need for affordable housing is even greater than ever. Finding ways to use the tools of finance to maintain and scale-up co-operative housing is a challenge Rauhala’s team is excited about.
“The time is right for a rebirth of the co-operative movement, and we want to be there to support that.”
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