“It’s brutal,” says Mike Bulthuis, of the housing market in Ottawa, Ontario.
And Mike sees every day just how brutal it is. He’s the executive director the Ottawa Community Land Trust (OCLT), an organization that acquires existing rental housing to convert it to non-profit and secures vacant land for affordable housing developments.
“During COVID, homelessness has become a much more visible phenomenon,” Mike says. “But I think that the affordability crisis is reaching a much wider swath of the population as well.”
Mike also hopes to use the community bond raise to draw government attention to the issue of renovictions. He says there are very few government funding programs for organizations who save existing affordable housing (versus those who build new), hence the need for community investment. He hopes that by growing a community of people willing to invest in this solution, “governments will follow the lead of communities and other investors.”
And there’s good reason to support preserving existing affordable units: “It’s cost effective, it’s immediate, and I think there is a strong environmental argument to be made for recycling, alongside energy retrofits, as opposed to always building new,” Mike says.
It also helps combat NIMBYism, people who say ‘not in my backyard’ to new housing developments, Mike says. “In a sense, it’s the opposite, because what we’re trying to do is actually purchase properties to allow folks to stay within neighbourhoods.”
Step 2: Prepare
After learning about the benefits and efforts involved in a community bond raise, organizations then start planning their campaign. Tapestry helps organizations create a business plan detailing how they’ll earn revenue to pay bond investors back. This is the phase OCLT is in right now.
While the “revolving fund” plan was right for OCLT, it does pose a particular challenge, Mike says. When raising for “one initiative, one project,” Mike says, “it’s probably a bit easier to scope out your finances and predict your cash flow and what you need for the next 10 years. The notion of building out this fund brings in some complexity.”
During this preparation phase, organizations also take time to consult potential investors. They propose bond terms — length of terms, minimum investment, interest rates — to investors and get their feedback. OCLT has three bonds mapped out, but wants to make sure they match what prospective investors in Ottawa are willing to contribute. The organization has so far consulted more than 75 people and found overwhelming support, with many indicating they’d participate.
And as a new organization, Mike says, “this is also a really exciting opportunity for us to kind of introduce ourselves and our vision.”
OCLT’s bond raise will begin late fall 2023. Stay tuned for more updates!