More than 40 affordable housing stakeholders gathered at the Workers Arts & Heritage Centre in Hamilton today to explore new and innovative financing models for affordable housing. The key message from the panelists was a firm belief that that community investment has a central role to play in creating more affordable housing. Lack of funding is a long-standing problem that has escalated to become a front-page item in every community and an issue which will clearly require a collaborative solution. As with many mid-sized cities across Ontario, lack of affordable housing is a critical area of concern in Hamilton., who hosted the event.
The event attracted a diverse cross-section of stakeholders including non-profit and co-operative housing providers, poverty and housing activists, churches, affordable housing consultants, city councillors, city planners, architects and developers. The panelists, including Tapestry Community Capital, New Market Funds, Tim Welch Consulting, the Mount Community Centre and Options for Homes, presented a range of alternatives to traditional bank financing, which at times can be challenging for non-profit groups and low-income households to secure.
Tapestry believes that a social finance tool called a community bond could play an integral role in mobilizing private capital for affordable housing. “The signal is strong and clear that Canadians want to invest locally and with purpose”, says Tapestry’s Executive Director, David Cork, “what is needed are more investable projects”.
Non-profit and co-operative organizations are unique in that they can take advantage of exemptions of the Ontario Securities Commission that allow them to issue securities to their community of supporters. “Quite simply, a community bond is a loan from a community member. How it differs from a traditional bond is that it always encompasses a social or environmental return in additional to a financial return” says Cork.
One of the panelists who shared a real-life success story was Andi van Koeverden, the Director of The Mount Community Centre in Peterborough. In 2011, a small group of dedicated citizens that were part of the Peterborough Poverty Reduction Action Network embarked on momentous task of transforming a historic 132,000 sq ft building in the heart of Peterborough to respond to growing needs for affordable housing in the area.
With no upfront capital to close on the purchase of the building, the group turned to their community for private capital. Their ask was simple – “just imagine”. The response was overwhelming, with 60 community members stepping in to collectively invest $2 million to bring the project to life. This community financing was complimented with a $1 million contribution from the City of Peterborough and a low interest $1.7 million loan from the County of Peterborough. To date, 43 affordable rental units have been completed, with another 38 under construction.
The Mount Community Centre is a story of determination, courage and commitment, and demonstrates the power of community finance. Tapestry hopes more groups will lead the way, creating opportunities for supporters to invest in projects that will directly benefit their communities.
“There are many sectors in which community bonds can be applied”, says Cork, “but the case for affordable housing is particularly strong. Lack of funding is a long-standing problem that has escalated to become a front-page item in every community and an issue which will clearly require a collaborative solution.”