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Affordable Housing

Nov 25

Tapestry Community Capital to receive $3M as a CMHC Housing Supply Challenge finalist

By Affordable Housing, News

The Canada Mortgage and Housing Corporation (CMHC) Housing Supply Challenge has named Tapestry Community Capital a finalist, awarding the organization a $3 million prize to scale up Canada’s community finance market for affordable housing. 

Tapestry works with charities, nonprofits and cooperatives, including 19 affordable housing providers, to support them in raising capital using a tool called community bonds. Housing organizations issue community bonds — which can be purchased by anyone in and beyond their communities — to finance any part of the development process. Community bonds allow these providers to take control of their financing, since they can set their bond terms to align with their project timelines, rather than relying on grant cycles or accepting terms offered by commercial lenders. 

The investment vehicle also allows organizations to engage everyday Canadians in solving the housing crisis via their investments — and to offer returns directly to their communities, making community bonds a local economic development tool, too. 

Ryan Collins-Swartz, Tapestry’s Co-Executive Director, says: “Canadians witness the effects of our broken housing system daily, but feel powerless to make a difference. It doesn’t have to be this way. By investing in community bonds, people across the country are directly funding affordable housing for their neighbours. Tapestry is working to make community bonds mainstream, empowering thousands of Canadians to help solve the housing crisis. We’re grateful to the CMHC Housing Supply Challenge for its support, which will accelerate this work.” 

A group photo of 13 members of the Tapestry Community Capital team.

The Tapestry Community Capital team.

With the Housing Supply Challenge prize, Tapestry will continue its work on three key initiatives: 

  • A new pooled community bond fund: In 2025, Tapestry will launch a $30 million investment fund, which will pool capital to invest across community bonds across the country, helping them reach targets faster and more reliably. This will be especially important for rural and remote communities which may not have the population density or the local wealth to support an entire community bond raise. The fund will also allow institutional investors to participate in the community bond market by making the large investments needed to justify their due diligence processes without crowding out everyday community investors in individual campaigns. 
  • An improved back-end experience for issuers and investors: Tapestry is building a new version of its investment management system, with features that will significantly streamline the process of preparing to sell community bonds. In the future, Tapestry plans to convert this technology into a public-facing marketplace, where investors can browse and easily purchase community bonds from across the country on one central platform. 
  • Building cross-sector support for community investing: Tapestry is inviting representatives from across financial institutions, governments, academia, the nonprofit sector, and more to join and shape a coalition committed to moving the community bond sector forward. This means bringing awareness of the model to their respective communities and strategizing ways to remove barriers to community bond issuers and investors.

About Tapestry Community Capital 

Tapestry is a nonprofit organization supporting community bond issuers across Canada. While Tapestry focuses on affordable housing, it also supports nonprofits and cooperatives in raising capital to purchase community arts venues, build community-owned renewable energy infrastructure, and more. Launched six years ago, to date Tapestry has helped issuers raise over $110 million from more than 4,000 community investors, and is set to double that raised amount in the next two years via affordable housing community bonds. Learn more at tapestrycapital.ca. 

About the CMHC Housing Supply Challenge 

The Housing Supply Challenge is a $300-million commitment over five years, which invites citizens, stakeholders and housing experts to propose solutions to the barriers to new housing supply. Round 5 of the Challenge aims to increase the adoption of transformative, system-level solutions that enable the quicker delivery of both community and market housing. Learn about the other Round 5 finalists on the CMHC Housing Supply Challenge website. 

Media contact:

Kylie Adair
Communications Lead, Tapestry Community Capital
kylie@tapestrycapital.ca
613-601-5636 

Nov 14

Do you need a big audience to successfully raise community bonds?

By Affordable Housing, Education

This is a feature from Tapestry’s newsletter, The Thread. To receive bi-weekly deep dives into non-profit and co-op financing, subscribe at tapestrycapital.ca/newsletter.

Lindsay Harris wants Propolis Housing Cooperative, the nonprofit she co-founded in 2020 to build affordable homes in Kamloops, to end the housing crisis in one of Canada’s most expensive provinces. “We really see our vision as an organization for the long term,” she tells us. “In the future, we want to be owning and operating a network of multifamily buildings in the community.”

Of course, building a six-storey co-op building on Kamloops’ north shore, with 50 units ranging from bachelor to three-bedroom, plus commercial space on the ground floor, isn’t cheap. Propolis had a hard time qualifying for bank loans, as well as the funding programs offered through the Canadian Mortgage and Housing Corporations. It didn’t yet have a community of supporters, so to speak.

So how did Propolis, in the span of just four years, go from incorporating as a brand-new organization to clearing 90% of a $1.1 million community bond campaign, and eventually buying the land for that co-op?

They talked to everybody

In the early stages of their campaign, Propolis did some planning with Tapestry Community Capital to understand who their organization was connected to, and whether they might invest in — or spread the word about — their bonds. For instance, together we identified a network in local food security, an issue that unfortunately dovetails with the housing crisis. They’re also connected local businesses around the building site, with an interest economic development. And much more.

But it’s also meant having a lot of conversations across the table at a farmer’s market, at big community events, and in one-on-one conversations. Everyone on the team has to be able to explain both the project and the concept of community bonds in a deep and thoughtful way. “We didn’t have an existing mailing list of supporters when we started the campaign,” Lindsay says. “We were introducing ourselves to them, as a new organization, at the same time.”

They kept their campaign open-ended

Propolis held their first investor consultations in early 2023, and launched the campaign in early June of that year. Lindsay says if she could go back, she would start the community engagement process years earlier. Trying to explain who Propolis is and the bond campaign at once isn’t something she’d do again.

But by keeping their campaign open for over a year, Propolis has been able to continue selling bonds and using them to repay two short-term loans they needed to purchase the property back in March 2024. While this approach doesn’t work for every organization — it can be better to give supporters a deadline, to convey urgency — it’s worked well for Propolis to build relationships over time.

Propolis is close to 90% of its target raise, but Lindsay and the rest of the team aren’t slacking off. “Just yesterday, I went and did a big long presentation to the Kamloops Adult Learner society about the housing crisis, talking about the solutions that Propolis is doing,” Lindsay says. “It’s not actually a process that stops.”

Aug 12

Tapestry is working with 11 housing providers to raise $110 million in community bonds

By Affordable Housing, News

A group of at least 11 charitable, nonprofit and cooperative housing providers across the country are using a financing tool called community bonds to raise a collective $110 million from everyday Canadians in their communities, creating or preserving more than 3,000 units of affordable housing altogether. 

The 11 organizations are supported by Tapestry Community Capital’s Investing in Housing initiative, which is funded by the Canada Mortgage and Housing Corporation (CMHC)’s Housing Supply Challenge. Tapestry is a national nonprofit providing consulting and administrative services to community bond issuers. Community bonds are an investment opportunity issued by nonprofits and cooperatives and purchased by both everyday Canadians and institutional investors. 

Tapestry is currently working with four housing providers raising capital with a combined total goal of $9 million ($8 million raised to date) in community bonds, from the Kensington Market Community Land trust preserving affordable housing in a rapidly-gentrifying neighbourhood of Toronto, Ont. to Propolis Housing Cooperative building new net-zero, affordable homes in Kamloops, B.C.. The additional $110 million target by 11 new organizations (with more to be announced) represents an over 1,200 per cent scale-up for the community bonds model among housing providers. These campaigns are set to launch on a rolling basis until March 2025. 

This comes as the systematic exclusion of low- and middle-income Canadians from access to affordable housing intensifies. According to CMHC’s Spring 2024 Housing Market Outlook, “growing demand for rental homes will not be met because the cost of homeownership will lead households to stay in rental housing.” Meanwhile, CMHC reports, “unfavourable financing conditions are expected to make more new rental projects unfeasible in 2024.”

Ryan Collins-Swartz, Co-Executive Director at Tapestry, says: “Canada’s housing system isn’t designed to ensure that everyone has a safe, affordable place to live. But the good news is that more and more Canadians are recognizing this injustice and looking to contribute to change. Community bonds are helping them invest directly in more affordable housing for their neighbours and earn a fair return in doing so. These community investors are also offering housing providers access to affordable, predictable funding — a rarity in the sector.” 

Redwood Park Communities runs a YIMBY — ‘Yes, in my backyard!’ — campaign to encourage support for affordable housing development in Simcoe County, Ontario.

Organizations set to raise the collective $110 million include: 

  • Redwood Park Communities: a Barrie, Ont.-based nonprofit raising $10 million to create up to 146 new units of affordable housing across Simcoe County.
  • The Inclusive Housing, a new nonprofit subsidiary of Toronto-based Spotlight Development, which plans to raise between $15 million and $20 million to build more than 1,000 new units of affordable housing across Toronto and Kitchener. 
  • Indwell, an Ontario-based affordable and supportive housing provider has already raised $5 million and plans to raise significantly more through its next campaign. Indwell’s Finance Manager Nick van der Velde says: “Our current raise with the Hope and Homes Hamilton Community Bond is going well and we see an opportunity to expand and finance additional supportive and deeply affordable housing in South and Southwestern Ontario. The Community Bond has allowed us to engage our support community well and we are interested in growing that.” 
  • Winnipeg-based Inuka Community Inc., which is set to launch Manitoba’s first-ever community bond campaign, a $3 million campaign to finance the construction of a 60-unit development.  
  • Two land trusts, a model growing in popularity where nonprofit organizations buy land to keep it off the speculative market and in community benefit: Muskoka Community Land Trust and Hogan’s Alley Society, who will raise a cumulative $12 million.
  • The Housing Trust of Nova Scotia will be Tapestry’s first affordable housing client in Atlantic Canada, raising between $5 million and $10 million. 
  • Vancouver-based Hogan’s Alley Society will raise capital to provide culturally-informed housing to Black communities, as will the African Canadian Affordable Housing Village Coop in Toronto. 
  • United Way Perth Huron’s subsidiary United Housing plans to raise $750,000 for the construction of 10 new units of affordable housing, with a longer-term goal to raise up to $24 million over several years. 
  • Central Ontario Co-operative Housing Federation, which supports 41 housing cooperatives and will soon raise capital to finance three affordable housing sites of their own, with an emphasis on investment from cooperatives in their network. COCHF’s Executive Director Elana Harte says: “Community bonds closely align with the cooperative housing sector’s values. COCHF chose to work with Tapestry because our project needs flexible, low-cost, community-rooted funding. On the other side of the equation, we plan to engage cooperatives as investors – offering them a low-risk investment opportunity and fostering cooperation among cooperatives themselves, all for more affordable housing.
  • Habitat for Humanity Victoria, Tapestry’s first affordable home ownership project (other issuers focus on rental housing) in Victoria, B.C.. The organization will raise between $3 million and $4 million toward a 14-unit stacked rowhouse development. 
  • More community bond issuers are to be announced. 

 

With funding from the CMHC Housing Supply Challenge, Tapestry has upped its capacity to support these organizations with larger community bond raises, including by redeveloping its digital platform for administering community bonds. 

Gracen Johnson, Senior Specialist, Innovation and Research, Canada Mortgage and Housing Corporation, says: “Through the Housing Supply Challenge, Tapestry was twice recognized by industry peers for its potential to scale community bonds with real impact. In Round 2, they expanded their capacity and infrastructure to apply community bonds across a broad portfolio of housing projects. As semi-finalists in Round 5, they’ve continued to build momentum and raise community capital. We look forward to watching them continue their innovative work.”

About community bonds

Community bonds are similar to a traditional bond, but instead of being issued by governments or corporations, they’re issued by nonprofits and cooperatives to fund socially- and environmentally-conscious projects. They’re a flexible, self-determined way for organizations to raise capital, since issuers set the investment terms that work best for their project rather than needing to accept commercial lenders’ terms. On the other side of the equation, community bonds enable everyday Canadians to support important projects in their communities while earning a fair return.

For affordable housing providers, community bonds can:

  • Help fill financing gaps — for example, there are few other funding paths to cover pre-development costs like buying land, having architectural plans drafted, and legal fees.
  • Build community support for more affordable housing — affordable housing providers can grow their network of supporters by offering their communities investment opportunities.
  • Contribute to local economic development — by offering returns to everyday community members rather than big banks, community bonds build community wealth, indirectly helping to end the housing crisis.

About Tapestry Community Capital 

Tapestry is a nonprofit organization that supports community bond issuers across Canada. While Tapestry focuses on affordable housing, it also supports nonprofits and cooperatives in raising capital to purchase community arts venues, build community-owned renewable energy infrastructure, and more. Launched six years ago, to date Tapestry has helped issuers raise over $110 million from more than 4,000 community investors — this next wave of community bond campaigns for affordable housing providers will double Tapestry’s reach. Learn more at tapestrycapital.ca. 

About the CMHC Housing Supply Challenge 

The Housing Supply Challenge is a $300-million commitment over five years, which invites citizens, stakeholders and housing experts to propose solutions to the barriers to new housing supply. Most recently, CMHC announced Round 5 of the Challenge, which aims to increase the adoption of transformative, system-level solutions that enable the quicker delivery of both community and market housing. Learn more on the CMHC website.

May 09

Tapestry Community Capital chosen as a CMHC Level-Up semi-finalist

By Affordable Housing, News

Tapestry Community Capital is proud to share that we’ve been selected as a semi-finalist in the CMHC’s Housing Supply Challenge!

What does it mean? We’ve received funding to continue our work supporting affordable housing providers across the country in raising community capital. From building new affordable, net-zero housing in Kamloops, B.C. to preserving affordable units for residents of Toronto’s quickly-gentrifying Kensington Market, the work affordable housing providers do is essential and they need better financing options.

 

What is the Housing Supply Challenge?

From the CMHC website: 

The Housing Supply Challenge invites citizens, stakeholders, and experts to propose solutions to the barriers to new housing supply. The challenge will distribute $300 million in funding over 5 years.

Successful submissions that address barriers to supply will receive funding to prototype or incubate their proposal. Following the prototype stage, a number of selected finalists will share a pool of additional funding to implement their proposed solutions.

Each round awards proposals that address housing supply barriers such as building timelines, construction productivity, and improving data on land availability.

How do community bonds support affordable housing?

Community bonds are a social finance tool that can be used by charities, non-profits and co-operatives to finance socially and environmentally impactful projects. Similar in many ways to a traditional bond, they are an interest bearing loan from an investor, which has a set rate of return and a fixed term.

For affordable housing providers, community bonds can:

  • Help fill financing gaps — for example, there aren’t many other financing paths to cover pre-development costs like buying land, having architectural plans drafted, and legal and consulting fees.
  • Build community support for more affordable housing — affordable housing providers can grow their network of supporters by offering their communities investment opportunities.
  • Contribute to local economic development — by offering returns to everyday community members rather than big banks, community bonds build community wealth, indirectly helping to end the housing crisis.

Learn more about Tapestry’s Investing in Housing program here, and about the CMHC’s Housing Supply Challenge here.

For media inquiries, contact Kylie Adair, Communications Lead at kylie@tapestrycapital.ca. For general inquiries, get in touch with our team at info@tapestrycapital.ca.

Oct 25

What is a community land trust? Learn about the movement preserving affordable housing and community spaces

By Affordable Housing, Education

Canada’s housing crisis is reaching a boiling point. We hear about the causes all the time: gentrification, renovictions, real estate bubbles, and more. 

But what about the solutions? One solution with a long history in North America is gaining steam — community land trusts. There are now more than 40 of them across Canada working to keep neighbourhoods diverse, affordable, and vibrant. 

Ready to learn more about this growing movement? Here’s a primer. 

First things first: what is a community land trust? 

In the broadest sense, community land trusts are non-profit organizations that own land and make decisions for what happens on that land at the direction of their members, typically residents of the area. Together, members decide what their community needs and use the land they own to address those needs. 

For example, if the neighbourhood needs more affordable housing, they could lease some of their land to a co-op or non-profit housing provider. If they’d like to encourage arts and culture, they could develop studio spaces or performing venues. And much more! 

How do members make decisions?

Community land trusts run like democracies. Members of a land trust elect a board who makes the decisions. A common governance structure is the tripartite model, where one third of the board needs to be made up of residents inside the land trust’s properties, a third made up of members from the surrounding community, and a third made up of government officials, housing experts and other stakeholders.

Getting this balance of power right is key, because it ensures the community land trust doesn’t only act in the interests of any one stakeholder group. This isn’t a glorified NIMBY group, in other words.

Is there a community land trust near me?

There just might be! There are more than 40 community land trusts across Canada. Find a directory here.

Check out this video for the story of the Kensington Market Community Land Trust, the group working to preserve affordability in one of Toronto’s rapidly gentrifying neighbourhoods. Plus, more on the community land trust movement across North America. 

How do community land trusts get the money to buy land?

Community land trusts don’t always start with a lot of money, but they do have lots of community support — and that’s why many of these groups choose to raise capital by mobilizing their communities. To do this, many issue community bonds, a type of investment opportunity that allows residents and supporters to invest directly in a community land trust’s projects.

Back up, what are community bonds? 

We’re so glad you asked! Community bonds are a social finance tool that can be used by charities, non-profits and co-operatives to finance socially and environmentally impactful projects. Similar in many ways to a traditional bond, they are an interest-bearing loan from an investor, which has a set rate of return and a fixed term. In other words, they function like an I.O.U: community land trusts, in this case, ‘sell’ a bond to an investor, then pay that money back after an agreed-upon amount of time (usually a few years) and with predetermined interest. 

Why community bonds over other financing options for community land trusts?

Community land trusts benefit from a diversity of financing options, but many are exploring community bonds because with this model, they can get the financing they need on their own terms. They don’t have to wait for a government grant or the bank’s approval for a loan — they can launch a community bond campaign when they want to, how they want to. This offers flexibility, which is especially important to land trusts since they often have to spring into action when a piece of property is for sale. Some community land trusts choose to run community bond campaigns to buy specific properties, while others like the Ottawa Community Land Trust are choosing to raise money for a fund they can pull from when properties come onto the market.

Another big reason? Community bonds align with these groups’ ethos of true community economic development (not gentrification). Returns don’t go to big banks or major investors; they go to everyday people living in the neighbourhood, frequenting public spaces, and supporting local businesses. In this way, community land trusts are able to funnel money back into their local economies, fuelling thriving communities from every angle. Learn about all the benefits of community bonds here.

Are you running a community land trust (or thinking of starting one up) and looking for financing? Get in touch with our team — we’d love hear about your project and explore whether community bonds are a good fit. 

Oct 19

Iffy about investing your foundation’s assets in REITs during a housing crisis? Switch to community bonds

By Affordable Housing, Education

A recent report by SHARE, a non-profit shareholder advocacy organization, revealed some unsettling information about residential real estate investment trusts, known as REITs. 

These trusts, which own and often operate profit-driven residential real estate (i.e. apartment buildings), could be contributing to the country’s housing crisis. But investors don’t have enough information to know one way or another, the report found.

The data they were able to gather from Canada’s six largest REITs, though, suggests these trusts’ investment strategies could be pricing people out of housing. New tenants in turned over units paid an average of 13 per cent higher rent in properties managed by the four REITs that provided this data. Tenants moving into newly renovated units paid a whopping 29 per cent more on average than previous tenants (in properties managed by two REITs who shared this data). 

The report also found investors are getting little to no information from REITs about eviction rates, property maintenance, and other factors around securing people’s human right to decent housing.

Are foundations and REITs values-aligned?

In a recent Future of Good story, Gabe Oatley reported that while “Canadian foundations and charities aren’t required to disclose their investments…interviews with experts suggest residential REIT holdings are common.”

Meanwhile, Canada’s philanthropic foundations are under increasing scrutiny to ensure their investments align with their missions and beliefs. The troubling practices revealed by the SHARE report have sparked debates over the role of REITs in exacerbating housing affordability challenges and contributing to the erosion of tenants’ rights — and therefore, foundations’ complicity.

All of this raises a fundamental question: If foundations divest from REITs, where should they channel their investments?

Community bond campaigns: a community-led, ethical way to invest in housing

Community bond campaigns present a compelling solution for foundations seeking ethical and impactful investment options. (New to the world of community bonds? Learn about the model here.) 

By creating a dedicated portfolio for community investment through community bonds, foundations could actively address affordable housing challenges while fostering community development at the same time. Community bonds are issued by affordable housing providers (you can read about six of them operating across the country here), bought by retail or institutional investors, and repaid with interest rates and timelines set by issuers. This gives community groups who want to address the housing crisis a flexible way to raise the capital they need, while offering returns directly to their community members. And at Tapestry, we work with these groups to make sure there’s a solid plan to generate revenue and repay investors before launching.

Here are four big reasons they’re a values-aligned investment for foundations: 

Community bonds are transparent 

Community bond issuers consistently report on progress to investors throughout their projects, allowing investors to clearly see where their money is going, and make sure they’re invested in truly ethical, affordable housing. This transparency fosters trust between foundations, issuers, and communities, ensuring that funds are making a dent in the housing crisis.

They’re direct 

Investing in community bonds directly supports community-driven and community-focused initiatives that prioritize long-term and sustainable affordability in communities. Through community bonds, foundations can invest directly in grassroots groups with firsthand knowledge of their communities’ housing struggles and effective solutions. 

They facilitate community engagement 

One of the biggest advantages of community bonds is the opportunity for foundations to engage directly with communities at the forefront of the housing crisis. This engagement isn’t just financial — it’s about creating connections, understanding needs, and fostering genuine impact. Foundations can play a pivotal role not only as investors but as catalysts for positive change within communities.

You can help catalyze a community investment movement

At Tapestry, we envision a future where retail investors can put their money into bettering their communities, and the returns from those investments then contribute to the community’s overall economic development. If you believe in this future, too, an investment from your foundation could help build excitement and confidence in community bonds. It’s an invaluable contribution to the individual community bond campaign you invest in, and to the movement toward ethical investment in Canada.

In a landscape where foundations are increasingly called on to uphold ethical responsibilities, the choice of investment vehicles carries immense weight. Transitioning from REITs to community bond investments offers foundations an opportunity to stand as beacons of truly ethical investment — and make a real impact on the housing crisis affecting the daily lives of so many across Canada.

Sep 01

Meet three community bond buyers — here’s why they invested

By Affordable Housing, Education

Investors are an essential piece of the community bond puzzle. But who are they? What’s important to them? What do they value? What do they need to know about you and your project to make the decision to invest?

The answers to these questions are unique to each organisation and project — and Tapestry clients find those answers through stage two of our process working together — but to give you a glimpse into the minds and motivations of community bond supporters, we sat down with three different investors and asked an important question: Why did you buy? 

Here’s what they told us. 

The community development organisation looking to publicly support affordable housing

When Haliburton County, Ont.-based affordable housing provider Places for People launched a community bond raise earlier this summer, one of the very first investors snapped up $50,000 worth of bonds — a pretty significant chunk of the $850,000 goal. That investor was the Haliburton County Development Corporation (HCDC), and executive director Patti Tallman says it was HCDC’s longtime faith in Places for People’s work that made investing a no-brainer. “Knowing the affiliation with Tapestry…we felt very comfortable in that investment,” Patti adds. 

After working with Places for People for many years — HCDC has loaned the organization money in the past for its affordable housing work — Patti says the community bond campaign was a welcome opportunity to publicly support Places for People’s work. “We wanted to be able to show that HCDC is a huge supporter of the concept of what Places for People is and what they do,” says Patti. “To be able to help launch the program right from the get go, it’s maybe going to [encourage] more people to think, Yeah, I can make an investment here.”

HCDC typically invests in businesses in Haliburton, so an investment in a non-profit is “unique and different” from their other work, Patti says. It was a new concept for others, too: Patti says in some of the local media coverage, reporters called the investment a donation, which is not the case. All community bond investors receive their principal investment back, with interest.

The interest HCDC earns from their investment will go back into its programs supporting economic development in the county, like its Local Initiatives Program — the only program of its kind hosted by a community development corporation — which provides non-repayable grants to nonprofits contributing to Haliburton County’s resiliency and vibrancy. Community bonds are meant to build community wealth, and HCDC’s relationship with Places for People is a great example. 

The individual investor who believes in helping her neighbours out

After Deb Alore retired from her job in public health, she began to get more involved in community advocacy in Kamloops, B.C., which she’s called home since 1987. When she started going to general meetings and potlucks hosted by the Kamloops Food Policy Council, she met Lindsay Harris, the council’s food policy implementation lead. She’d also heard of Myles Pruden’s work in the community on net-zero, affordable housing construction.

So when Lindsay and Myles came together to start another organisation, Propolis Housing Cooperative, to build new affordable housing in the community, Deb took note. And when Propolis launched a community bond raise, she was in. “I respect them very much. I think those folks have done great things with other projects,” Deb says. “I just wanted to be a part of something positive and solution-based. And given that I felt the people involved were really reputable, I just thought, I can’t not support this. I need to do this.”

As a longtime Kamloops resident, Deb can see firsthand how challenging the housing market is. “We’ve had our share of financial challenges too, but I’ve never felt like I was in danger of losing my shelter because of the cost,” she says. As someone with the means to help her Kamloops neighbours, Deb feels a responsibility to do so. 

Deb invested in the Worker Bee bond, a minimum $1,000 bond with 2.5 per cent interest paid at the end of a three-year term. This is the first community bond Deb has invested in, but she doesn’t think it will be the last. One factor that limited the size of her investment this time around, though, was that it couldn’t be held in an RRSP (some community bonds can be held in RRSPs and TFSAs, but for Propolis’s first raise, their bonds are not eligible). “I’m retired and a lot of my savings are in RRSPs,” she says. “I had to [use] non registered money that I didn’t need for other things.” 

But Deb says she’s not overly concerned with the returns. “For me,” she says, “the investment piece of it was just sort of incidental. It was all about being a part of something positive, a positive change. The fact that I may earn a little bit of interest by loaning the Propolis group a bit of money over the next three years, that’s a bonus. But that is certainly not what drove me to be involved.”

The foundation with a national scope and a commitment to impact investment

Toronto-based Inspirit Foundation has invested in a number of community bond campaigns, among them SolarShare, a cooperative that owns 52 commercial-scale solar power projects across Ontario.

Jory says Inspirit is attracted to the “clean and simple” nature of community bonds: investors buy a bond, and their principal investment is repaid with interest after a predetermined term, usually a few years. “Comparing that to private equity deals, comparing that to social impact bonds, it’s just simpler. I think that’s certainly an advantage of it,” Jory says. 

Inspirit isn’t necessarily deterred by more complicated investments — Jory looks for good investments in solid ideas and projects, and focuses less on the format, he says. But Inspirit does tend to invest in projects and organisations with measurable or tangible outcomes. “Most of the stuff that we look at is pretty concrete, and we were able to see or even interact with end users,” he says.

Part of why Jory is a connoisseur of impact investment formats is Inspirit’s commitment to a 100 per cent impact investment portfolio — whereas some foundations make more traditional investments without ESG considerations in order to earn returns for their granting programs. “Since Inspirit exists to create a more inclusive and pluralist society, our investments need to generate returns that transcend financial outcomes for our foundation and maximize stakeholder value,” reads Inspirit’s investment policy statement.

Jory predicts Inspirit will continue to invest in community bonds, and that he’ll have more and more to choose from. “I get the sense that more and more nonprofits are looking at the model and wondering if it’s workable [for them].”

Feb 26

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!

Dec 08

Financing Affordable Housing: Ottawa Community Land Trust

By Affordable Housing

“I often have people come up to us and say, I love what you’re doing, can I give you a few thousand out of my RRSPs to invest,” says Ray Sullivan, Executive Director of the Ottawa Community Land Trust (OCLT). The problem for most non-profit affordable housing organizations, he says, is that they don’t currently have a pathway to allow their supporters to do this. We sat down with Ray, and Ottawa Community Land Trust Board Members, Lisa Ker and Glenn Grignonn to explore how Community Bonds might create a new avenue to engage their community while also unlocking much needed capital.

The Ottawa Community Land Trust was established in 2021 with the mission to preserve, maintain and support the creation of diverse and affordable housing in the Ottawa region. Their business model is straightforward – acquire properties that have existing affordable market rents, remove them from the private market, protect existing tenants, and then lease the properties out to local non-profits and co-operatives to manage.

ACORN Canada’s report on the housing crisis in Ottawa is dire. Market rents rose by 26% between 2005 and 2015, while median income only increased by 4%, and supply is not nearly high enough to meet demand. To add to the difficulties, the vast majority of affordable housing providers in Ottawa, and Ontario at large are small housing providers, operating less than a hundred units, meaning it is very difficult for them to achieve economies of scale and compete with the private market. “Of the roughly 750 members of the Ontario Non-profit Housing Association, 700 of them operate less than 100 units of housing,” shares Glenn. 

OCLT is particularly interested in acquiring small to mid-sized apartment buildings. “If they were bought by a commercial investment group, they would solely be interested in their return on investment and aggressively try to turn those units over and raise rents to increase the cash flow from the property,” says Ray. 

Most of the properties they are looking at will be eligible for traditional debt financing for 60% to 70% of the total property value, and OCLT is currently collaborating with the Ottawa Community Foundation to develop impact investment tools to cover the remaining gap. “If we were to rely on government sources, it would take over a year to secure the funds, and we would lose the properties,” says Ray, “we need to be able to mobilize quickly.” 

Ray, Lisa and Glenn all share the opinion that these are not “fundraisable” projects. “People who want to make significant contributions and gifts to organizations and causes get excited about being part of a construction project where you can generate a lot of buzz,” says Lisa, speaking from years of experience leading fundraising initiatives. “It seems that acquisition of existing affordable housing doesn’t have quite the same appeal. This is a big problem because every year, Canada is losing 64,000 units of affordable housing – and 20,000 are in Ontario alone. That means for every one unit built, four are lost. 

Ray shares that he would like to see the impact investment capital developed with the Ottawa Community Foundation become a revolving fund to help them acquire multiple buildings and protect as many units as possible. After acquiring the building, OCLT would repay the initial impact investors with funds raised by issuing Community Bonds. The idea is beneficial in a number of ways, first being that the initial capital would then be available for future acquisitions, and second, it would reduce the risk to community investors because the acquisition would already be complete. “These buildings are already rented out and have a consistent revenue stream, so we feel confident,” says Ray. 

The team also sees the potential to use community bond funds for renovations on the buildings. “There is boundless potential for improvements in energy efficiency in affordable housing,” says Lisa. The team agrees this is an area that really needs more attention, but expertise is scarce. “I think there’s a lack of capacity in the sector,” says Glenn, referring to both energy efficiency retrofits and Community Bonds, “and when people don’t understand it, they don’t want to do it.”

Lisa Ker was formerly the Executive Director of Ottawa Salus, a supportive housing provider. “We never sufficiently ventured into the world of social finance,” she shares, “we didn’t have the tools, resources and education to understand how to mobilize that type of capital.” 

“Like many things in the sector, once you get the momentum going, then people want to get on board,” says Glenn. The team seems excited to plough the way in terms of Community Investment. 

We wrap up the session with everyone being excited about the potential of Community Bonds. “The way you have brought this down to the community level and made it accessible to smaller and medium-sized housing providers – well- that’s just pretty cool,” says Ray. 

About this Blog Series

In October 2021, Tapestry was selected to take part in a Canadian Mortgage and Housing Corporation (CMHC) program called the Housing Supply Challenge. This innovative competition encourages residents, interested parties, and experts from across the country to propose creative solutions to housing. The goal: to help meet Canada’s pressing need for safe and affordable homes by breaking down barriers to the creation of new supply.

Tapestry participated in Round 2 of the program, Getting Started, which seeks to find solutions to pre-development challenges, such as community resistance and obtaining financing. The program granted incubation funding to the 29 organizations selected to allow them to further develop and test their solution proposals.

Through six months of research and consultation, we had the opportunity to speak with over 40 interested parties in the affordable housing sector, from housing providers, to development consultants, to funders and lenders. Each and every individual and organization consulted helped to co-design our solution proposal.

The “Financing Affordable Housing with the Power of Community” blog series shares the lessons learnt and stories heard from some of the amazing organizations that we have partnered with.

Nov 18

Financing Affordable Housing: Propolis Cooperative Housing Society

By Affordable Housing

Propolis is a non-profit co-operative based in Kamloops, B.C. that is creating a community of environmentally conscious individuals, brought together by a shared vision of affordable and sustainable housing.

We had the pleasure of meeting Lindsay Harris, the co-founder and president of the Propolis Cooperative Housing Society, and learning more about their ambitions for the co-ops’ first project. Lindsay, who works with Kamloops Food Policy Council, has long had a focus on community economic development. “I have always taken a systems approach to food insecurity, and for me, that also encompasses housing,” she shares. 

Propolis has partnered with local Kamloops resident, Miles Pruden, who owns a sustainable real estate development company, to bring the project to life. Miles’ company, Nexbuild Construction, built what has been dubbed as Kamloops’ most sustainable multi-family home (which can be viewed below). With Miles’ expertise, the co-op hopes to construct housing that is not only better for the environment but also reduces ongoing energy and maintenance expenses for tenants. 

Lindsay got in touch with Tapestry Community Capital because she sees Community Bonds as a flexible tool that could work in tandem with financing that they are hoping to secure from the Canadian Housing and Mortgage Corporation (CMHC). Over the last year, Lindsay has conducted her own research on the community financing landscape in British Columbia, making use of a BC-based toolkit for starting a community investment cooperative. “I wear a lot of hats and have many projects on the go, and I decided I ultimately didn’t have the capacity to also start up a community investment co-operative, and that’s why I was so excited to learn that Tapestry already has the needed infrastructure in place to raise community investment.”

“One of the things that has become very evident from our conversations with our network and with the community is that there are a number of people that are very interested in substantively supporting this work but we need a platform for them to be able to invest,” Lindsay shares. Lindsay came prepared with a list of questions about Community Bonds, all of which are very familiar to the Tapestry Team. 

 

Are we better to have a smaller group of high-net-worth investors, or a wider group of community members contributing smaller investments?

This is a common question, and the simple answer is – it depends. Community bonds offer an incredible pathway to engage your community and create lasting relationships. On the flip side, we understand that organizations need capital to bring their projects to life. “We think there can be a happy medium and that’s why we often design a Community Bond campaign with multiple investment options,” shares Ryan Collins-Swartz, Tapestry’s Co-Executive Director.  “For example, there may be one bond that offers a lower entry point and perhaps a shorter duration, and this would allow for more widespread engagement, and then another that might have a higher entry point, longer duration and slightly higher interest rate that is better suited to higher net worth individuals.”

 

Is it possible for institutions to invest in Community Bonds, such as foundations?

“Definitely!” shares Ryan. “We see huge interest from foundations because many have earmarked specific funds for impact investment, and they are always on the lookout for investable projects with social and environmental impact. We have also seen companies, both big and small, being very interested in investing.”

 

How are interest rates set?

This is a key step in the Tapestry process. We want to make sure that Community Bond issuers are going to the market with an investment opportunity that fits their financial needs, but also an offering that is exciting and attractive to their community. “It’s a multi-step process, but financial modelling of an organization’s financial capacity and projects, along with community consultations, is really key,” shares Ryan. 

 

Can community bonds offer patient capital?

“The beautiful thing about Community Bonds is that they put the control in the hands of the issuer. If you wanted to issue a bond with a 15-year term, we could certainly explore your community’s appetite to make a longer-term investment,” says Ryan. 

 

Lindsay shared that prior to meeting Tapestry they had a perception that raising community investment was a complex process, and they had felt fearful to take it on alone. “Kamloops is an incredibly community-minded place, and I have no doubt that there would be widespread support and involvement in a campaign like this.”

The Co-op is currently looking at properties for their first project and are advocating to the City of Kamloops to sell a piece of city-owned property. Lindsay shares that this has been a slow process, but that moving on private properties comes with its own set of challenges. “We are definitely facing hurdles in terms of being able to move quickly on a property – we are hoping Community Bonds can be part of the solution.”

Take the next step and bring your project to life

If you are interested in using Community Bonds to finance your next project, our Tapestry team can help you. We have the expertise, staff and technology to make your bond campaign a success.

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