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February 2023

Building affordable housing in the UK with Charity Bonds

By Affordable Housing, Learning from Abroad

Since 2010, housing prices in Canada have skyrocketed by 105% and incomes have not increased proportionately. A recent report by Canada Mortgage and Housing Corporation has stated that the scale of the housing challenge is so large that governments cannot solve the problem on their own. An estimated 3.5 million new housing units are needed to achieve affordability by 2030, and this will require innovative financing and collaboration among all types of housing providers – be they non-profit, for-profit, or co-operative. 

Many places in the UK are facing a similar challenge, where housing demand is outstripping supply. Recently, I had the opportunity to visit Hightown Housing, a charitable housing association in the United Kingdom that supports people who cannot afford to buy or rent a home at market price. I sat down with David Skinner, Director of Financial Services, and Neil Wray, Head of Treasury, to unpack the importance of Hightown’s work and learn how community investment has helped them to achieve greater impact. Our conversation follows below.

Q: How does Hightown develop affordable housing units? 

A: There are two main streams through which Hightown develops affordable housing units. The first is through a planning agreement called Section 106. Through this agreement, when a developer acquires land, they have to designate a portion of the properties for social housing. Then housing associations, like Hightown, bid to purchase those properties. This has accounted for two-thirds of all of Hightown’s developments in the last year.

In other cases, Hightown will buy land, design the property, and contract a builder to construct them. This method allows for more direct control. We also offer care and supportive housing units uniquely designed for vulnerable populations such as homeless people, young people, mothers and young children, and people with learning disabilities. 

Q: Hightown manages over 8,000 homes. How are these affordable homes financed? 

A: Hightown uses a mixture of financing. Most of it is debt financing – so things like bank loans and loans from the capital markets. We are increasingly acquiring capital from institutional investors such as insurance companies and pension funds. We also use grants from the government and we reinvest any surplus Hightown makes back into the organization. We have also issued two retail charity bonds

Q: How are charity bonds used to finance the affordable housing units? 

A: We’ve issued charity bonds twice now. Individuals wanted to invest in their local housing and we were looking for unsecured financing without having to rely on the bank. Charity bonds enabled us to finance the development of affordable housing units as they were being developed. We did not have to wait until the assets were completed to finance the build. Charity bonds also raised publicity for us and our work. 

In terms of the actual process, we established our financing need, worked with financial consultants, and engaged in lots of community consultations with potential investors. We then issued the bonds through the Retail Charity Bond plc. on the London Stock Exchange and our bond campaign was oversubscribed. Our first charity bond campaign in 2015 raised £27M within a few days. In 2017, we raised £31.5M in a similar time frame. Charity bonds were the perfect tool for us at that time.  

For those interested, here were the terms of each campaign:

2015  2017
  • £27M raise 
  • 4.4% APR, paid semi-annually 
  • Maturity in 10 years 
  • £31.5M raise 
  • 4% APR, paid semi-annually 
  • Maturity in 10 years 
  • Min investment = £500, invest in multiples of £100 after that 

Q: Are there any current developments that Hightown is working on?

A: Yes! Hightown is always working on new projects. We currently have over 40 active projects. One of our largest projects is on a site that used to be an industrial space with warehouses and car lots. We are spending £38M to develop 158 units. This is a combination of flats and houses that will be social housing, affordable rent housing, and shared ownership properties. 

Q: What is the difference between social housing, affordable rent housing, and shared ownership properties? 

A: Social housing is rented at around 60% of the market rent. Affordable rent housing is rented at 80% of the market rent. Shared ownership properties are intended to encourage individuals to climb the housing ladder. Individuals are able to own a portion of the house and rent the remainder. For example, someone may afford to own 60% of a house so they decide to put a down payment on that and get a mortgage. The remaining 40% of the house is still owned by Hightown, so individuals are responsible to pay rent to Hightown for that portion of the house. Ideally, individuals increase their percentage of ownership of the home until they own 100% of it and buy it out from Hightown. 

Q: What impact does Hightown have on its residents and the community? 

A: Hightown’s impact is difficult to quantify. But here are some key figures from our social impact report:

  • 40% of general needs properties were let to homeless households in 2020/21 
  • 80 people moved from temporary homelessness services to stable housing 
  • 776 service users were supported to live with independence 
  • 40 unaccompanied asylum seeking minors were given accommodation and support 
  • Properties improved their energy efficiency rating from C to A/B through retrofits
  • Households saved an average of £247 on fuel savings 
  • Only 1.75 tonnes of CO2 equivalent was emitted per home compared to the sector average of 2.53 tonnes 

Q: What advice do you have for other housing organizations looking to replicate your model? 

A: Go for it! We are all in this sector to solve the housing crisis so we need to develop strategies to do that. For Hightown, that means maximizing development opportunities and maintaining high quality accommodations. Different organizations face different challenges. It’s important not to be complacent and to continue overcoming challenges to achieve our shared bottom line – solving the housing crisis. 


About this Blog Series

Hi, my name is Jasleen Bahia, and I was once an Intern at Tapestry Community Capital. I am now completing my degree in business with a focus on social finance, and I’m currently doing a semester abroad in Europe. While here, I am Tapestry’s Ambassador to the UK. This blog series documents my adventure abroad learning about the social finance ecosystem in the UK and connecting it to our growing community investment marketplace in Canada. I am eager to find out what we can learn, replicate and share!

The Town of Bridgewater leads the way in tackling energy poverty

By Client Stories

In the Town of Bridgewater, 38% of families struggle to afford home energy bills. Seniors, equity-seeking groups, and single parent families are particularly at risk. In order to afford a basic necessity – such as heat – many forgo other essentials, including food, medication, and transportation.

The housing stock in Bridgewater is old and energy inefficient, meaning that many people pay much more than they should to keep their homes comfortable. But the impact extends beyond comfort – energy poverty affects all aspects of life, from education to mental wellbeing. The documentary below captures the very real experiences of Bridgewater residents that are struggling to afford their rising energy bills.

So what is the solution?

Upgrade homes to become more energy efficient, reduce energy bills, keep more money in the pockets of Bridgewater Residents, and create a positive environmental outcome in the process.

Recognizing the needs of their residents, the Town of Bridgewater launched Energize Bridgewater, an ambitious initiative designed to make energy more affordable, accessible, and sustainable. The program has set a target to reduce greenhouse gas emissions by 80% from 2011 levels by 2050 and lift as many as 350 local families out of energy poverty by 2026. 

In order to realize these targets, the Town and residents need access to low cost capital to upgrade homes and develop renewable energy projects. The Town has made enormous headway with the launch of their Clean Energy Financing program, which allows residents to access low interest capital of up to $40,000 to retrofit their homes. Upgrades can vary greatly depending on the needs of the home, from the installation of a heat pump, to adding more and better insulation, to installing new windows or solar panels. Under the Town’s expanding program, residents are now supported by a Navigator, who helps them assess their energy efficiency upgrade needs and access all provincial and federal energy efficiency grants to bundle with their financing. 

For the past several years, the municipality has also been exploring the potential for a solar or wind community energy project. The Energize Bridgewater team has investigated innovative models from across Canada and conducted a resource study to identify municipally owned or influenced parcels of land that could be feasible sites. Through this research, one element emerged as critical – community participation.

Bridgewater saw the opportunity to engage community members in the energy transition by allowing them to become investors in sustainable energy projects. This would not only unlock additional capital, but contribute to community economic development and community support for the projects. 

The Town brought on Tapestry to explore how this could be done, and to design an investment system that could unlock the capital required to meet their long term sustainable energy targets.

The design of the system was multipronged, involving engagement with a diverse array of stakeholders, system mapping, and financial modeling. Central to the investment system is an investment vehicle called a Community Economic Development Investment Fund (CEDIF), a model unique to Eastern Canada, which allows community members to invest in community-based initiatives, make a fair return on their investment, and get tax benefits. 

Tapestry also developed an excel-based tool to support the Town’s decision making process to move forward with the implementation of the investment system. This tool allows the user to test out the financial conditions of the three main components of the system – the community energy project, the community-wide home energy efficiency retrofits, and the CEDIF. The tool enables the user to test a wide array of variables, including the number of households to be retrofitted, the power production and export rate for a community energy project, and loan and return rates, among others. The tool then collects key outputs of the system into a consolidated results and analysis page, for an at-a-glance summary.

Below are some of the key takeaways from our work with the Town of Bridgewater:

There is immense potential for impact investment into energy efficiency and community energy projects. Investors are eager to make value aligned investments, but their decision to do so hinges on a sound business model.

Energy efficiency retrofits can offer attractive returns to investors but logistical challenges remain, such as portfolio assembly, repayment, and risk around timing and delivery of retrofits. This is why the majority of impact investment in energy efficiency has been directed to large scale commercial upgrades. Energize Bridgewater is in an advantageous position having already addressed many of these challenges for investors. 

The business model for small-scale solar PV and wind energy projects remains challenging in Nova Scotia, and Canada at large without government support in the form of grants and/or subsidies. The attractiveness of the investment opportunity may change drastically with changes in legislation. For example, the new Community Solar Program, expected to be launched by the Nova Scotia Department of Natural Resource and Renewable in Spring 2024, would likely make a small scale community solar project financially viable and attractive to investors.

CEDIFs are an incredible vehicle to mobilize community investment into meaningful community-based projects. Tax advantages to investors mean that lead times are short and capital can be accessed with relative ease. However, hurdles exist around what CEDIFs can and cannot invest in. For example, CEDIFs can only invest in for-profit entities, precluding non-profits (which may arguably create greater community impact) from accessing CEDIF financing. 

Municipalities have a key role to play in navigating the energy transition. Through their work to design and launch Energize Bridgewater, the Town of Bridgewater has gained a reputation as a progressive, forward-thinking, and environmentally conscious Town. Their model is replicable and they are now leading the way for other municipalities across Canada that are trying to tackle climate change and energy poverty. 


Photo credit: Town of Bridgewater

Let’s Own Our Venues

By Learning from Abroad

In the United Kingdom, Music Venue Trust has launched the ‘Own Our Venues’ campaign, giving music supporters across the country a new opportunity to invest in the spaces they love. The campaign, which has garnered support from figures like Ed Sheeran and Sony Music, offers a prime example of how community investment can serve to rescue and maintain vital community assets. 

To better understand Music Venue Trust and the ‘Own Our Venues’ campaign, I spoke with Matt Ottridge, the Music Venue Trust Ownership Coordinator. 

The challenge faced by grassroots music venues

Over the last twenty years, many independent music venues in the United Kingdom have shut down. Mark Davyd, Founder of Music Venue Trust, says the main reason for closure is that people who run the independent music venues do not own their premises, and the landlords who do own them don’t care about the impact the venue is delivering. Music venues are often at the mercy of commercial landlords and rising rents, and this issue of ownership is underscored by other challenges such as noise complaints and chronic underinvestment. 

According to Music Venue Trust, 93% of grassroots music venues are tenants with an average lease of 18 months. This prevents venues fully investing in their spaces because there is uncertainty about how long they will be able to stay put. 

The ‘Own Our Venues’ campaign 

Since 2014, Music Venue Trust has advocated for the protection, security, and improvement of UK grassroots music venues for the benefit of venues, communities, and artists. They provide free legal advice, a network for music venues to connect and collaborate, and a multitude of online resources to guide music venue operators. The ‘Own Our Venues’ campaign is one of the organization’s recent initiatives. 

The aim of the ‘Own Our Venues’ campaign is to change the ownership model of grassroots music venues. Instead of private landlords owning the spaces and leasing them to music venue operators, Music Venue Trust has set up a community benefit organization, Music Venue Properties, that will purchase the spaces and rent them back to current operators. The value to independent music venues? First and foremost, a landlord who understands their sector. Matt mentions that Music Venue Properties will work with operators, giving them greater assurance over the length of their lease, reduce rents, make contributions to insurance and repairs, help with accessing grants, and analyze their operational models. Music venue operators will develop the security and confidence they need to create and maintain incredible venues that are pillars of their communities.  

Individuals and organizations can purchase community shares issued by Music Venue Properties for as little as £200 and up to £100,000. This investment will fund the purchase of an initial nine music venue properties. In exchange, investors receive a 3% annual return on their investment, become a co-owner of the society and its assets, and play a critical role in saving the independent music venues they love! 

Community financing has saved local pubs, shops, and post offices, amongst other enterprises, and now it’s time for the model to be applied to music venues, too. For more information on the ‘Own Our Venues’ campaign, visit

About this Blog Series

Hi, my name is Jasleen Bahia, and I was once an Intern at Tapestry Community Capital. I am now completing my degree in business with a focus on social finance, and I’m currently doing a semester abroad in Europe. While here, I am Tapestry’s Ambassador to the UK. This blog series documents my adventure abroad learning about the social finance ecosystem in the UK and connecting it to our growing community investment marketplace in Canada. I am eager to find out what we can learn, replicate and share!