In November 2020, Vancity Community Investment Bank (VCIB) and Canada Mortgage and Housing Corporation (CMHC) announced a first-of-its-kind agreement to accelerate the delivery of affordable housing across Canada and would see VCIB commit up to $100 million to finance affordable housing initiatives by September 2021.
The agreement represents VCIB’s most ambitious target for affordability financing to-date, and supports CMHC’s goal that by 2030, everyone in Canada has a home that they can afford and that meets their needs.
A full year has passed since the ground-breaking arrangement, during which VCIB and CMHC have worked together to advance this important objective. We’re proud to say that not only have we hit our target, we’ve soared past it, providing $183 million in financing for 1,100+ units of affordable homes over the past year.
“Nothing is more important than a home. This collaboration between VCIB and CMHC demonstrates our government’s commitment to the creation of a whole new generation of affordable housing for Canadian families.” – The Honourable Ahmed Hussen, Minister of Families, Children and Social Development and Minister responsible for Canada Mortgage and Housing Corporation (CMHC)
This partnership is a testament to what can be achieved when the public and private sectors join forces to provide solutions to Canada’s affordable housing shortage.
“Tailored financing is essential to tackle the affordability crisis,” said Trish Nixon, Managing Director of Commercial Impact Banking at VCIB. “As a purpose-driven lender, VCIB is committed to partnering with sector players to find the right solutions to move the needle forward.”
VCIB and CMHC’s joint initiative addressed a financial gap in the housing market by supporting innovative organizations that are making homeownership more affordable for Canadians.
One of these organizations is Trillium Housing, a nonprofit social enterprise that invests in the development of entry level housing. VCIB’s funding supported the development of Trillium Housing’s Maxx Urban Towns in Pickering, Ontario.
With this financing, Trillium will offer its unique shared appreciation second mortgage, known as the Trillium Mortgage, to make 41 of the townhouse units affordable for modest-income families. To assist new homeowners, the Trillium Mortgage helps buyers with down payments, reduces leverage and carrying costs, and doesn’t require monthly payments while the home is owner-occupied.
Another organization that benefited from VCIB and CMHC’s partnership is Jasper Place Wellness Centre, a nonprofit organization that focuses on building strong communities by addressing social and health-based inequities facing low-income and/or vulnerable neighborhoods.
VCIB provided a loan to refinance Jasper Place’s office building in Edmonton, Alberta, to provide equity for another transaction: The purchase of a market rent apartment building located at 11212 – 85th Street NW Edmonton, AB. This purchase will ensure that 30 units are permanently preserved as affordable-rent apartments over the next fifteen years.
Similarly, VCIB launched the Preserve and Protect Guarantee Program last year to fill a gap in existing funding for the preservation of Parkdale’s affordable housing. This program was created to support the Parkdale Neighbourhood Land Trust (PNLT) to rapidly acquire at-risk affordable rental buildings as they are put up for sale.
“While all levels of government have mandates to tackle the affordable housing crisis, currently there are no municipal, provincial or federal programs that specifically support the acquisition and conversion of existing rental housing into permanently affordable housing,” said Joshua Barndt, Executive Director of the Parkdale Neighbourhood Land Trust.
The first loan was made out of the program in April 2021, with the successful acquisition of a 36-unit low rent, at-risk apartment building located on Maynard Avenue.
Another organization that VCIB and CMHC are proud to champion is Habitat for Humanity Canada. To support Habitat’s innovative home ownership model, VCIB delivered a $30 million credit facility to finance the construction of up to 414 units of affordable housing over the next three years.
Habitat Canada will extend loans from the credit facility to local Habitat organizations across the country, streamlining and expediting their access to capital, and allowing the organization to aggressively scale its delivery of affordable housing across Canada. Habitat Peterborough & Kawartha Region is now using the credit facility to push forward the development of 41 new and affordable homes at its Leahy’s Lane condo build.
VCIB and CMHC’s financing also provided support for housing co-operatives that keep housing costs low while providing a safe place for their members. For Innisfree Housing Co-op, VCIB provided a term loan to finance much needed repairs for the organization’s 70-unit housing complex.
Looking towards the future
Even though this partnership has made a significant investment towards increasing Canada’s affordable housing stock, solving the affordability crisis will require more partnerships from public and private institutions, ones that continue to support all types of affordable housing initiatives.
“Every Canadian deserves a safe and affordable place to call home,” said Randeep Sarai, Member of Parliament for Surrey Centre. “In that spirit, our government is taking action to increase the supply of rental housing through partnerships such as this. New affordable rental housing will provide families with better access to jobs, services and the amenities they need. Working together to meet our housing needs is a sure pathway to success.”
Marci Ien, Member of Parliament for Toronto Centre, continued; “Our Government is taking steps, right now, to ensure that every Canadian has a safe and affordable place to call home. Investments in partnerships such as this go a long way to support the creation of more affordable housing and improve the lives of Canadians. It’s through collaboration that we all win.”
Going forward, VCIB will keep addressing Canada’s affordability crisis by offering innovative financial solutions that cover a wide range of affordable housing projects.
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