When staff at Community Housing Management Network (CMHN) took over the property maintenance and management at Innisfree Housing Co-op in Scarborough, they knew the complex needed major repairs.
The roads through the 71-unit, affordable housing property had “miniature sinkholes everywhere,” said Don Jones, CHMN’s onsite property manager. Moreover, the doors and windows let gusts in from outside. And the toilets, faucets, and tubs often leaked because of the poor quality of previous patch repairs.
“The members had been without a decent home standard for years due to the difficulty of getting the right capital plan and funding in place,” said Jones. And the clock on completing these renovations was ticking. “If we were to leave these repairs any longer, the cost of replacement would have been astronomical,” he said.
Jones knew a major renovation was in order to bring the buildings up to CHMN’s “decent homes” standard. But there was just one problem: finding the money.
Accessing funds to offer a “decent home” standard to co-op members
Innisfree is a rental housing co-op. This means that every significant new change — like approving a new loan to complete major repairs — needs to go through the tenant members. At Innisfree, the majority of members are working-class families from Caribbean and east and west African diaspora communities. Many families have lived in their rental units since they were built in 1983.
To prepare for the member’s’ vote, Jones secured loan proposals from multiple different lenders — banks, credit unions, and a specialty housing co-op loan provider.
His preferred option was a $2.9 million non-revolving term loan offered by Vancity Community Investment Bank (VCIB).
“With VCIB, there was no comparison,” he said. “They had the best rate and the most flexibility… It was a slam dunk, so we recommended it to the board.”
To Jones’ delight, the board agreed and so did the co-op’s’ tenant members. With this decision made, the work could begin in earnest.
But what co-op members didn’t know at the time of their vote was the behind-the-scenes story — how VCIB could offer such a competitive rate and such a short turnaround time.
VCIB and CMHC partnering to offer affordable housing across the GTA
In late 2020, as housing prices kept rising, VCIB staff became increasingly aware of the challenge that many community members were facing in securing housing they could afford.
“We’re just at a point where the housing crisis is peaking,” said Eric Visser, senior manager of business development at VCIB.
To try and tackle the problem at scale, VCIB struck a groundbreaking partnership with Canada Mortgage and Housing Corporation (CMHC), the federal agency tasked with providing safe and affordable housing for all Canadians.
Through the partnership, VCIB committed to providing a minimum of $100 million to finance affordable housing initiatives in partnership with CMHC over the following year.
This meant that when Jones inquired about financing to support building upgrades at Innisfree, VCIB was ready. Their loan was approved quickly and repairs could get started in a hurry.
“Flabbergasting” tenants with dignified service
When fixing up the place, Jones first turned his attention to the roads, repairing the “sinkholes” and fixing sidewalks. With the first phase of this project well underway, he turned his attention to the units’ bathrooms, where old tiling was in need of replacement.
To begin, he asked tenants a simple question —their preferred tiling colour.
“They were actually flabbergasted,” he said. “Because for the first time, somebody’s actually asked them to get involved with things happening with their [rental] unit.”
This kind of service wouldn’t have been possible, he said, without the flexibility of the loan offered by VCIB. “We wouldn’t have been able to offer our decent home standard, if we had restrictions on how we used the loan. I can’t emphasize enough how important that is,” he said.
Unlike many competitors, VCIB allowed Jones and the team at Innisfree to allocate their funds where they deemed them to be most important. When COVID-19 hit and wood prices rose, for instance, Jones put off a planned fence upgrade and prioritized air conditioning installations instead.
This kind of service is good for members, but it’s also good for their property manager. “For me it’s great,” said Jones, with a laugh. “I get all of the kudos [from members].”
Surpassing planned commitment to affordable housing with $183 million investment
Over the course of the pandemic, it wasn’t only Innisfree that VCIB supported in this manner.
Since the initial partnership was struck with CMHC, VCIB provided $183 million in financing for over 1,100 affordable housing units — nearly doubling its planned $100 million commitment.
And there’s more support to come.
“COVID-19 exposed a lot of inequalities and shone a light on the need for more affordable, high-quality housing for populations who are marginalized,” said Visser.
In the coming months, VCIB and CMHC will continue to offer flexible support, offering people dignified and respectful service while enabling tenants to live in comfortable and safe homes.
Our real estate financing team has decades of experience supporting Canada’s affordable housing providers. If you require financing for your housing co-operative,