(Title): National Housing Strategy and the Rapid Housing Initiative.
(Image of a very colorful housing project made with containers modules, the Canada logo, and the CMHC logo)
(Voice of Laura Pile)
“Welcome to our session. And thank you for taking the time to join us today. My name is Laura Pile and I will be facilitating today's session. Before we begin, I'd like to go over a few items with you. This session will be an overview of the recently announced Rapid Housing Initiative. This is a one-hour session consisting of a 30-minute presentation and a 30-minute question-and-answer period. During the presentation period, participants are encouraged to write their questions in the Q and A box. Once the presentation is over, we'll be answering questions from the audience. As this is a Skype broadcast, questions are posted for the audience to view as they are answered. We anticipate we will receive many questions during our session. We will try our best to get to as many as possible during the Q and A period. Please note, the questions about the program parameters, that'll be applicable for a broader audience will be our focus here today. If your question is more program-specific in nature, please reach out to your CMHC client Solution Specialist. I would now like to introduce our presenter, Lance Arnold. Lance is a senior specialist from the Rapid Housing team. Over to you Lance.”
(New PowerPoint slide with text only, filled with purple color)
(Text on screen: Session Objective)
(Voice of Lance Arnold)
“Great, thanks Laura. And thanks very much everybody for joining today, really appreciate you taking the time to come in and listen to our presentation and learn a little bit more about the Rapid Housing Initiative. The objective of today's session is to really give everybody who's listening in, an opportunity to gain some base level knowledge about the Rapid Housing Initiative, what the parameters are for applying to the program, the process looks like for applying, and as Laura mentioned, we'll try and answer some questions at the end of the session as well”.
(New PowerPoint slide with text inside purple shapes and yellow shapes)
(Text on screen: Rapid Housing Initiative RHI. 1 billion dollars)
“So, you may have heard through the recent announcement, the program, it's a one-billion-dollar program. The eligible use of funds under this program are really broken into three types of projects.
The first one being the acquisition of land and the construction of affordable multi-residential modular housing units. This is the only type of new construction, which is eligible under this program, I'll speak to that in a little bit more detail in a couple of slides. The acquisition of land and buildings for the purpose of conversion of non-residential properties or non-residential buildings, I should say, to affordable multi-residential housing units and buildings. Eligible projects under this examples of that could include the acquisition of hotels or motels for conversion to permanent multi-unit affordable housing projects, also other non-residential properties, warehouses and such, could be used to convert to multi-unit affordable housing projects.
And finally, the acquisition of buildings that are currently in a significant state of disrepair or abandoned for the purpose of rehabilitating them. The intent here is that if units are already lost to the housing stock, they're no longer habitable, they're no longer functional, but there's an opportunity to rehabilitate them and bring them back to the stock, then those would be eligible for acquisition. It's not the intent here that existing housing units that are currently habitable and usable would be able to be purchased and renovated simply to upgrade their physical condition. The purpose of the program here is really to create new housing units. And so, the scope of projects that are available under this stream would be fairly limited”.
(New PowerPoint slide with image of a truck carrying construction materials in front of a series of a housing modules structure)
(Text on screen: Program objective three-thousands)
“I mentioned the intent here is to create new housing units, the goal of the program is to provide capital contributions to facilitate the creation of 3000 new permanent, affordable, supportive or transitional housing units. The intent is to create these units as rapidly as possible as the name of the program suggests and to create units within 12 months of the approval of an investment plan under the Major Cities stream or within 12 months of an executed contribution agreement under the Project stream. And we'll get into that detail in a little bit as well”.
(New PowerPoint slide with icons of bricks, tools, puzzle pieces and a delivery truck)
(Text on screen: What is Modular Housing?)
“So, I mentioned modular housing a couple of minutes ago, and we created a definition for modular housing that is fairly broad. We understand that there are different perceptions of what modular housing is across the country, different names are sometimes used for similar types of housing, and so I wanted to give a little bit of clarity here. So modular housing for this program is considered to be housing that is pre-fabricated, constructed in sections or modules, constructed away from the project site in a facility or factory type setting, and then is delivered to the project site upon completion set on a foundation”.
(New PowerPoint slide with images of a modern rental construction, a crane, and the exterior envelope of a building in construction)
(Text on screen: Multi-Unit Modular. Examples of Rental construction financing initiative RCFI in Port-Hope BC)
“This here is a photo of a project that was supported through CMHC's rental construction financing initiative in Hope, British Columbia, and it just gives you a sense of what a multi-unit modular housing project could look like”.
(New PowerPoint slide)
(Text on screen: Funding. CMHC will provide up to 100% funding to cost in capital contributions)
“Now, the funding, I mentioned it's a billion dollars, it's broken up into two streams of funding of 500 million dollars in each, the first one being the Major Cities stream, the second one being the Project stream. It's important to note that RHI funding is intended just for capital contributions or capital cost, it's not intended to fund operational expenses or ongoing maintenance expenses. Those are costs which will be the responsibility of the recipient of funding, whether through their own resources or through confirmed sources of operational funding from other levels of government. Rapid Housing will not fund cost related to non-residential space. A little bit of clarification on that. So non-residential space is defined in this as space which is not being used to directly provide supports or services to tenants in the property. Non-residential space, which is used for the specific purpose of providing supports or program services to tenants may be eligible for funding under the program” .
(New PowerPoint slide with text only)
(Text on screen: Funding. Major Cities Stream)
“I'll turn over the presentation to my colleague, Janet Neves, who will speak a little bit about the Major Cities stream”.
(Voice of Janet Neves)
Thank you, Lance. Hi everyone, this is Janet Neves, Senior Manager of Government Relations at CMHC. And so for the major cities stream, which is half of the allocation under the Rapid Housing Initiative, so 500 million has been allocated to 15 municipalities, so what you would have seen from the recent announcement, and it's also listed on the slide. And these municipalities were selected based on having the highest number of renters in severe housing need and people experiencing homelessness. And so, the funding to the 15 municipalities.
The municipalities can choose to use an intermediary either for some of the projects or for all of the projects that they're planning to use... To deliver with use of their allocation. And for the intermediaries, they can be chosen to construct, operate and/or own the units, but ultimately, the municipality will be responsible for ensuring that the units are created and that they're ensuring ongoing affordability of the units that are created over 20 or more years. And so, municipalities, we're currently working with these 15 municipalities to finalize funding the agreement, as well as municipalities need to submit an investment plan by November 27th. So, this is at the end of this month. And this is where they're outlining how they plan to use their allocation. They can also include additional projects over and above their allocation amount if they'd like to be considered for additional funding under the project stream.
And so, if... For those... For non-profit providers, provincial territorial governments, indigenous organizations that are interested in looking at developing a proposal under the project stream, one of the things you may want to consider is approaching municipality under... Either under the major city stream or within the project stream to explore opportunities for potential partnership, and whether or not there's an interest in having you act as an intermediary. And so for the municipalities under the stream, they're encouraged to take a community benefits approach where they would be relying on local labor in the development or creation of the units, and they're also encouraged to develop projects that target women, as well as urban indigenous populations. And so, with that, I'll turn it back to you, Lance”.
(New PowerPoint slide with text only)
(Text on screen: Funding. Projects Stream)
(Voice of Lance)
“Thanks, Jan. So, under the project stream I mentioned, it's a $500 million budget. It's available through an application-based process, where eligible applicants include municipal governments, provincial territorial governments, indigenous governing bodies and organizations, as well as not-for-profits. I'll mention that the application window, it opened on October 27th and will remain open until December 31st. Once the application window closes, CMHC will review all applications by January 31st of 2021, and selected proponents will be contacted in early February. In some cases, where very, very strong applications are received, CMHC reserves the right to approve some applications prior to the close of the window, however, the bulk of the budget will remain available for prioritized projects to be selected in January, and proponents to be contacted in February.
Those who are selected for funding will sign a contribution agreement with CMHC, and typically, funding will flow immediately thereafter. In some cases, CMHC may choose alternative funding schedules at its discretion, depending on the characteristics of the particular project being approved, and the intent is to fund... Pardon me, to commit all funds, so the full billion dollars, by March 31st of 2021. And just a note that, in terms of indigenous governing bodies, what we're speaking to here are any entities who are First Nation elected bodies, Inuit governments, Métis governments. Indigenous organizations are organizations which are indigenous-owned or operated but are not linked directly to the governing nation”.
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(Text on screen: A number of dates)
“Some key dates. I spoke about a few of these, but I just want to go over them again for you. So, the program did launch on October 27th of 2020, the application window opened at that time, and we are receiving applications as we speak. November 27th, Janet mentioned, that's when the investment plans from the major cities identified under the major city stream are required to be received. December 31st is when the application window will close, and so we encourage everybody to be... Who's interested in applying to this program, to start working on their applications as soon as possible, and submit them in advance of December 31st, if possible, but no later than December 31st. January 31st is when we will have assessed every application that has been received. And March 31st will be the date by which we commit the full billion dollars, and March 31st of 2022 is the sunset date of the initiative. So that's the date that the initiative will close, and at that point, most projects, because units are required to be completed within 12 months of an executed contribution agreement, by that point, most of the units are expected to have been completed by March 31st of 2022”.
(New PowerPoint slide with text only)
(Text on screen: Projects Stream. Prioritization. All eligible housing providers)
“So, prioritization, as I mentioned that a minute ago. So, there are certain criteria that we assess when an application comes in under the project stream to determine which ones will be selected for funding. On the screen here is a list of the criteria that we assess. So, the need for the project, we assess need based on statistics available to us from the census, through Statistics Canada, to determine the number of renter households who are in severe housing need in a particular community. We assess the duration of confirmed operating subsidies so projects... By offering the level of affordability that's required under this program, which I'll speak to in a moment, will, in many cases, require a source of operating subsidy in order to be able to remain viable over the term of the agreement, and so we will prioritize projects that have confirmed sources of operating subsidy, particularly those who have longer confirmed confirmations of subsidy. Cost sharing, so if there are projects that come in who don't need CMHC to fund the full 100% cost of their project, they will receive priority.
I should mention here that the intent here is to prioritize projects that are coming forward with confirmed sources of cash equity contributions, land equity. If projects are coming forward with the intent to seek construction financing from a lender, that would not be recognized here for prioritization, simply because the amount of time it takes to move through that process with a lender, to submit the application, go through the underwriting process, negotiate agreements and register security, typically that would preclude proponents from completing projects within 12 months.
The expediency of the project. So, we assess two things here, the first being how quickly can a project achieve occupancy, and secondly, how quickly can a project be completed in terms of the physical work required. In some cases, occupancy could be achieved earlier than the completion of the work, the physical work itself, and so we want to recognize that, particularly in light of COVID, and the targeted populations we're trying to serve through this program, that it may be beneficial, especially with winter coming on, and the second wave hitting a number of parts of the country, that it may be beneficial to get people off the streets, out of tent cities right now, even before the work is complete. The land status, so if you own land and you're bringing that forward, you'll certainly receive priority there. If you have an agreement of purchase and sale signed where the closing date would be early enough that it would allow you to develop that land within a 12-month period, you'll receive priority there as well. Duration of affordability. So, our minimum criteria under this program is, affordability must be maintained for 20 years. Any projects that come forward with longer terms than 20 years will receive priority as well.
People or populations who are being served, people or populations who are vulnerable, I should say, who are being served, we will give additional priority to projects who are coming forward that are serving specifically indigenous populations, women and children, and Black Canadians. And for those projects who are seeking to develop new modular housing units, if they exceed the local standards for energy efficiency and/or accessibility, they will receive a priority as well”.
(New PowerPoint slide with two images. One with a mom and daughter lying together on a couch in front of a bright window, the other with two people of color sitting on a couch and reading a tablet. A middle-aged woman sitting close to a young man wearing prosthetics and both his legs amputated at the knee)
(Text on screen: Target Population. Households in severe housing need. People and populations who are vulnerable and targeted under the NHS)
“So, I mentioned target populations. While we do give additional priority to projects who serve Black Canadians, women and children and indigenous populations, it's important to note that every unit funded under the RHI must serve at least one of these populations shown on the list here. So those who are homeless, who are at risk of homelessness, women, women and children, women fleeing family violence, seniors, Indigenous peoples, veterans, those with physical and developmental disabilities, those dealing with mental health and addiction issues, Black Canadians, young adults, newcomers, including refugees, LGBTQ2+ and/or racialized groups”.
(New PowerPoint slide with text only)
(Text on screen: Eligibility: Affordability)
“So, from eligibility perspective, this is the definition that we are requiring proponents to meet from an affordability perspective, and really want is break this down into essentially two concepts. The first one being that the rent charge for a unit must not exceed 30% of the gross income that the household is earning, so that is the rent level that needs to be charged for the unit itself to be considered affordable. And secondly, the target population that is being served by that unit must currently be paying... Must currently be considered to be in severe housing need, be homeless or be at risk of becoming homeless. And the definition for being in severe housing need is that that household is paying 50% or more for their current dwelling. So that's... It's important to note those two... Those two items, and then, as well, as I mentioned earlier, the affordability needs to be maintained for a minimum of 20 years”.
(New PowerPoint slide with text only)
(Text on screen: Eligibility: Accessibility and energy efficiency)
“So, I mentioned a minimum criteria [sic] for energy efficiency and accessibility on the major city stream... Actually, Janet, maybe I'll turn it over to you, you'll probably be able to explain this a little bit better than I could”.
(Voice of Janet)
“Thanks, Lance. So for the major city stream where there's new construction, so these are modular construction projects, they all need to meet, so municipalities will need to meet a minimum energy efficiency of 5% or more above the energy efficiency standards under the National Energy Code for Buildings, or meet the local regional standard, whichever of the two is higher. And projects will also need to exceed the accessibility requirements of their jurisdiction by providing an additional 5% of accessible units above the local requirements. So, these are the requirements for modular housing under the major city stream. For units created under the major city stream, involving either through conversion or rehabilitation, those units would not be required to meet the minimum requirement noted above just on the energy efficiency standards or accessibility. And I'll turn it back to you, Lance”.
(Voice of Lance)
“Thanks, Janet. So, under the accessibility to energy efficiency criteria for the project stream, it's slightly different. So again, it applies only to new modular construction, but in this stream, there is no minimum requirement to exceed local standards. Rather, the minimum requirement is that local standards are met. But priority will be given for projects who exceed the energy efficiency standards according to the 2015 National Energy Building Code, or the local standard, whichever is higher. And on the accessibility side, those who exceed the minimum local standards for accessibility will also be given priority. And similarly, for, as with the major city stream, those projects that are seeking to complete a conversion or a rehabilitation will not be given priority if they are exceeding those, and the reason for that is we recognize that, when completing conversions or rehabilitations, particularly when required to deliver units within 12 months, it would be very difficult to exceed local standards and meet that timeline, and so we exempted them from that requirement in both streams” .
(New PowerPoint slide with text only)
(Text on screen: Eligibility: Property Types)
“So, the eligibility from a property type perspective is standard rentals, mixed use. It's eligible, however, as I mentioned earlier, CMHC will not fund non-residential cost, which, particularly where those spaces are not being used to provide direct services to tenants, traditional housing provided the tenancy is at least three months, permanent supportive housing, single room occupancy, and seniors housing that requires light to no care, such as independent seniors living”.
(New PowerPoint slide with text only)
(Text on screen: Eligibility: Exceptions)
“There are some flexibilities for some of our criteria, and particularly around the 12-month timeline for delivery projects, particularly those located on reserve in the north or in remote areas or where seasonality is a factor for construction might be given some flexibility on the 12-month construction time line, where the application, the proponent is able to demonstrate that meeting that timeline would be impossible or would be too challenging. Similarly, and in terms of minimum units, we do have a five-unit or bed minimum under the program in terms of being eligible, however, again, for projects located in the north, unreserved or remote areas where we recognize that the need in those communities while important, may not require five units for that particular community, we are willing to consider some flexibility on that minimum”.
(New PowerPoint slide with text only)
(Text on screen: Program Delivery. Major Cities Stream. 12 months of an approved investment plan)
“So maybe I'll just ask Janet to speak to the program delivery for major cities”.
(Voice of Janet)
“Thank you, Lance. And so as mentioned for the 15 municipalities under the major city stream discussions are currently underway to finalize the funding agreement, so as soon as the funding agreements are signed, the funding will flow, all of the funding in terms of the allocation, will flow to the municipalities. And then as mentioned, they need to provide an investment plan on how they plan to use the funds, and the investments plans are due by November 27th at the end of this month. And once the investment plan is approved, then the municipality has 12 months, up to 12 months to complete the creation of the units. And the units will be considered complete when the project receives occupancy permit or an equivalent. And so, the municipality is under the stream also just need to ensure that steps are being taken to ensure appropriate zoning for the projects, and also ensure that the land meets the applicable environmental laws. Back to you, Lance”.
(New PowerPoint slide with text only)
(Text on screen: Program delivery. Projects Stream. 12 months of the execution of agreement)
(Voice of Lance)
“Thank you. So similarly, under the project stream, so proponents must deliver the units within 12 months of the execution of the agreement. So, a slight difference there is that it's within 12 months of the execution of the contribution agreement rather than approval of an investment plan. But same as under the major city stream, delivery is considered complete when the proponent does receive their occupancy permit or the equivalent in that jurisdiction, and zoning must be adequate for the proposed project and the land must meet all applicable environmental laws prior to the utilization of funds”.
(New PowerPoint slide with text and purple boxes)
(Text on screen: Applying for funding projects stream. Funding. Intake window to submit application closes on December 31st, 2020)
“So, a little bit of detail around how to apply for the project stream funding. So the requirement is that proponents work with CMHC's client solutions team when developing their applications, so we encourage anybody who's interested in applying for funding under the RHI to reach out to client solutions in their regions and discuss the details of the application to see if your project is a good fit for the RHI.
And you deliver units within 12 months. Are you serving one of the targeted populations? Are you ready to deliver from a zoning perspective, environmental perspective? Do you have land? Those are the kind of questions that you'll go over to see if you're in a position to be able to meet those requirements. Are you able to deliver at the level of affordability, which is required? Do you have sufficient experience to deliver units within 12 months from a construction perspective? And then to manage that project for 20 years or longer, particularly when dealing with the tenancy or the population that you've identified. If you are meeting all those requirements and you're a good fit, you'll work with client solutions to develop your application, and which will be submitted through the client relationship management online portal that we have developed, which is, as I mentioned earlier here, is open now to receive applications.
The applications, once they're received, will be assessed by CMHC. I'll speak to that in a moment, a little bit more detail. But in the event that... Through the discussions with client solutions or after the submission of the application, the application's deemed either not to be suitable or is not prioritized for funding, due to the competitive nature of this program and the interest we expect to receive. It doesn't mean that your project has nowhere to go at that point, we would encourage you again to speak with client solutions to see if maybe there's another opportunity for funding under one of the other national housing strategy programs that CMHC administers”.
(New PowerPoint slide with text and boxes)
(Text on screen: Program process flow. Projects stream)
“A little bit of detail around how a file moves through the process once it comes into CMHC. So, I just describe the application intake process”.
Once it does arrive, we will assess the file using the information that you've submitted as part of your application to determine your meeting our mandatory minimum criteria, making sure that the score that's been submitted through the system is accurate by validating that with the information that's submitted both in the portal itself, as well as with the supporting documentation that you'll provide. We'll then prioritize the applications which have been received to see which projects are going to deliver the greatest impact, which projects are going to be delivered within 12 months, serve the targeted populations, and have the greatest chance of maintaining that affordability over that 12-year period. So those will be prioritized and then we'll move through to the approval process. As I mentioned, this is all going to happen in January after the window is closed, we'll assess all applications by January 31st. In early February, will reach out to those who have been successful, as well as those who've been unsuccessful, to let them know what the results are of the application. There will be... The execution of the contribution agreement, funds will then be advanced and then a step which is not on the window here, but obviously, we'll then... The project development happens. So, the construction or conversion of the project happens and an ongoing monitoring for the full 20-year period”.
(New PowerPoint slide with text only)
(Text on screen: Key documentation required)
“So, I'm sure many of you are wondering about the documentation requirements. More detail on this is available on our website for you to download, but just a quick summary. So, there is a different list of supporting documentation required depending on whether the applicant is a government entity or non-government entity. Government entities are required to submit two documents as supporting documents with their application. The first is an application worksheet, which gives details around cost of the project, timelines for completion, vulnerable populations being served, as well as a development and construction project management schedule, which shows all the activities that need to be completed for the project to be delivered within 12 months. The milestones that need to be achieved along that timeline, and we'll use that to assess whether that timeline is reasonable, whether those milestones can be achieved within the time frame that is being suggested by the proponent.
Non-government entities who are submitting applications will need to submit those two documents as well as additional documents. So, confirmation that they have the appropriate experience, both from a construction and property management perspective. If you don't have that experience in-house, you are permitted to acquire that experience by hiring out, whether it's a general contractor, whether it's a property management firm. Company ownership documents, the project management schedule, which I spoke to just a moment ago, the identification and confirmation of both operational and capital funding. So we use this to assess in the prioritization of the file, making sure that you have operational funding, so that viability will be maintained for 20 years, and you'll be able to continue to serve tenants at that level of affordability. If you've committed to providing any cash equity or sources of contribution, we'd like to see documentation confirming that those sources of funding are in place.
Excuse me, identification of any program supports or any other supports you'll be providing to tenants. Confirmation that the land is secured, zoned and has the appropriate municipal approvals and cost estimates for construction, and then finally the environmental site assessment, if you have one on file. And a copy of any registered encumbrances or agreements that are on title”.
(New PowerPoint slide with text only)
(Text on screen: Terms and Conditions)
“The contribution agreement we'll sign with each proponent is a fairly simple agreement but does have certain terms and conditions that need to be adhered to for the full 20 years. At a high level, we need to ensure that you're going to continue to serve people in populations who are vulnerable as you identified in your application, that you continue to meet the affordability requirement for those tenants and that units are constructed, particularly on the new construction stream, that they're constructed to the accessibility of energy efficiency criteria that you identified, especially if you are being prioritized under a commitment to exceed the minimum standards in those local jurisdictions”.
(New PowerPoint slide with text only)
(Text on screen: Monitoring and Reporting and Compliance)
“I mentioned monitoring and reporting will be ongoing for the full term of the agreement. If it's a 20-year agreement, it'll be for 20 years, if you commit to exceed the 20-year minimum, and it's a 30-year or a 40-year agreement and the monitoring and reporting will be for 30 or 40 years, depending on the term of the agreement. During the construction period, particularly for government entities where funding will flow immediately on execution and other non-government entities where they have higher capacity and are wholly owned subsidiaries of governments, the monitoring will be on a quarterly basis for the term of the construction period. For the annual recording requirements, within two months of the end of each proponent's fiscal year end, they'll be required to submit an annual attestation confirming that they continue to honor the terms of the agreement that I just outlaid. The maintaining affordability, serving vulnerable populations in particular”.
(New PowerPoint slide with text only)
(Text on screen: Available Resources. CMHC website. www.cmhc-schl.gc.ca/nhs/rapid-housing-initiative Contact your CMHC specialist)
“If you're looking for additional information about the program, as I mentioned, please contact your client Solutions Specialist. CMHC's website here, the Rapid Housing Initiative website on CMHC's website, I should say. Here's the link to that, and you'll be able to find additional information that you can use as reference materials on the website. And with that, I think we'll open it up to some questions”.
(New PowerPoint slide with three images. One with a mom and daughter lying on a couch together. Another with a truck carrying housing modules to a construction site. The third with a young man and woman looking at construction plans, and wearing glasses and hearing-protection)
(Text on screen: Questions?)
(Voice of Laura Pile)
Yes, thank you for the presentation, Lance and Janet. We'll now begin our Q and A period with some questions we received from the audience. This portion of our sessions, our colleagues will be joining us to answer your questions. On the line, we have Yannick Monaghan, who is the Senior Manager of the Rapid Housing team. We have Kelly Kutro, who is an advisor of the Rapid Housing team and Philippe Cloutier, who is a Senior Specialist with the Rapid Housing team. Okay, so we'll start with the first question, what type of documentation is required to support the application? Specifically, how does an application demonstrate the affordability will be maintained for a minimum of 20 years.
(Voice of Kelly Kutro)
Hi everyone, this is Kelly Kutro. So, at application intake, there are differences in how proponents are asked to confirm that they have the ability to maintain affordability. If we're working with another level of government be it provincial, territorial, municipal or indigenous, they do not need to supply documentation to confirm affordability. We're relying on their ability to secure that funding for that period of time. If it is a non-government entity, they'll need to provide a confirmation of funding and will be prioritized based on the duration of that funding. For the term of the agreement, proponents regardless of the type, will be required to submit an annual attestation confirming that they'll continue to maintain the affordability and that they'll continue to serve the intended targeted population who are vulnerable. Where CMHC has concerns that they may not be meeting their commitments, we will have the right to audit the books and operations of the proponent.
(Voice of Laura Pile)
Okay, thank you, Kelly. We'll move on to our next question. Will the requirement to maintain affordable last for 20 years?
(Voice of Lance)
Yeah, it's Lance here again. So short answer is yes. As I mentioned, the contribution agreement that we sign with each recipient will be for the full term of the affordability period that they committed to maintain in their application. So, a minimum of 20 years, but it could be longer depending on what was submitted in the application.
(Voice of Laura)
Okay. thank you, Lance. We'll move to our next question. Would an acquisition of a property for the purpose of conversion be prioritized?
(Voice of Lance)
Yeah. I can take that. Lance, again, I mentioned earlier, there's three potential uses for the funding under this program, so the first is the acquisition of land and construction of new modular housing, multi-unit modular housing projects, the second is the acquisition of land and buildings, non-residential buildings for the purpose of converting them to permanent affordable housing, so that would certainly be eligible there, and then the third one is the acquisition of land and existing residential buildings, if they're in a state of disrepair and/or abandoned and are lost to the stock. And so, this would be an opportunity to rehabilitate them and bring them back into the housing stock.
(Voice of Laura)
Okay, thank you, Lance, we'll move to the next question. What is the definition of disrepair, can a proponent buy an existing residential property for renovation?
(Voice of Kelly)
I can respond, this is Kelly. A property will be eligible for acquisition for the purpose of rehabilitation, if they're abandoned or in disrepair, no longer adequate for occupancy, those would be eligible for the acquisition and rehabilitation. However, it has to be if in the opinion of a qualified expert, they really are said to be abandoned and in state of disrepair. So again, to make sure everybody understands, we need to have the opinion of a qualified expert, and that qualified expert would indicate to us that they cannot be made safe and adequate for occupancy without undertaking a substantial or complete renovation of the entire existing building, including dwelling units. Properties who do not meet the above definition would not be considered eligible for acquisition and rehabilitation.
(Voice of Laura)
Okay, thank you, Kelly. We'll move to our next question. If construction is shut down due to COVID-19 will deadline flexibility be provided?
(Voice of Lance)
Yeah. it's Lance here. In the event that there are delays due to local shutdowns, CMHC would consider flexibilities in the construction schedule. We take that on a case-by-case basis and make that determination at the time, but it's theoretically, yes.
(Voice of Laura)
Okay, thank you, Lance. We'll move to our next question. So how is CMHC defining modular housing?
(Voice of Kelly)
Hi, I can take this, it's Kelly. So modular housing units are defined as housing units which are partially or fully built off-site, for example, in a factory warehouse or similar facility by qualified manufacturer and delivered to the site either in whole or in parts and installed in an appropriately zoned in-service lot. These might range between single scattered units up to larger multi-unit housing projects. The modular housing units are expected to meet code compliance for permanent year-round occupancy of the authority having jurisdiction. Greater priority will be given to applications for modular projects that can exceed the energy efficiency standards as set out in the 2015 NECB or the local regional standard, as well as for projects who can exceed the accessibility requirements of the local or jurisdictional jurisdiction or regional jurisdiction. Pardon me.
Now the types of projects that meet the modular definition would be modular homes manufactured off-site and delivered to the site in whole or in parts, these are pre-manufactured homes, as such as ready-to-move homes, manufactured tiny homes, manufactured log homes, their prefabricated panelized building systems constructed off-site, such as SIP panels, complete wall sections substantially completed off-site, roofing systems may or may not be panelized. They are wood frame panels, complete wall section substantially completed off-site, roofing systems may or may not be panelized. They also include container homes where their substantial finishing, example, the insulation interior finishes, electrical, mechanical windows and doors completed to the unit off-site. So again, for container homes, there has to be substantial finishing that would be completed to the unit in an off-site setting.
The projects that are not considered modular would consist of stick-build frame construction on-site, such as conventional wood frame, conventional steel frame, pre-cut kit homes, and traditional log homes. Also not considered modular is masonry-block insulated concrete form systems, straw bale construction, and shipping containers delivered without substantial finishing.
(Voice of Laura)
Thank you very much for that, Kelly. Very clear. So, move on to our next question. When will CMHC financing be available? When the unit is being built in the factory, or when they are fixed to the ground. If we're financing, when fixed, who's funding the factory build?
(Voice of Lance)
Yeah. it's Lance here. It's a good question. I'll start off at a bit of a higher level. So first, if we're entering into a contribution agreement, with a government entity, typically not typically, in all cases, we will fund the full contribution amount immediately upon execution of that contribution agreement, and so then it would be their responsibility to manage their construction budget. When we're entering into a contribution agreement with a non-government entity, particularly those who may not have as much experience in managing construction, we may instead fund, according to progress advances, so we'll establish a draw schedule, as part of the contribution agreement and fund based on pre-established milestones. Those will be verified or validated by quantity survey reports, or it's based on work in place in some cases, particularly when we're talking about modular construction, we recognize that there's a need to move rapidly in order to be able to meet a 12 month on the reschedule. And so, we'll consider flexibilities where funding may be available, or advances may be available for projects that are still in the factory.
(Voice of Laura)
Okay, thank you, Lance. So, we'll move on to our next question. What flexibilities will be provided for indigenous in northern communities, will there be a cargo for these communities?
(Voice of Kelly)
Hi, I can take this one. It's Kelly. CMHC recognizes the challenges of delivering housing in indigenous and Northern remote communities and is willing where necessary to consider flexibilities around the 12-month timeline for the completion of projects. We're also willing to consider flexibilities around the five-unit, five bed minimum, as we know that there are some communities that may be small and not have the need for a larger total number of units in a set project.
(Voice of Laura)
Okay, thank you for that, Kelly. We'll move to our next question. It's something about the application prioritization. So, are applications prioritized all at once or on an ongoing basis?
(Voice of Lance)
Yeah, it's Lance here. So, the applications will be assessed as they come in. The prioritization will take place after we've received all of the applications in January. So, we'll make determinations at that point to see which of the applications should be prioritized for funding with the possible exception where we may approve some applications that are very, very strong prior to the close of the window. As I mentioned earlier in the presentation, the bulk of the budget will still remain available for that prioritization, and that takes place in January, and we'll contact successful proponents in early February to let them know if they have been successful.
(Voice of Laura)
Okay. thank you, Lance. Moving to our next question, how can an organization become an intermediary for Major Cities?
(Voice of Janet)
I can take this one. Thanks Flora. It's Janet. So for the municipalities under the Major Cities stream, they can choose a provincial government, indigenous governing bodies or organizations or a non-profit organization to act as an intermediary for the delivery, the management or ownership of some or all of the units, that the municipality will be delivering with their allocation. And so organizations that have projects they would like to have considered by municipality under the Major Cities stream could take the opportunity to reach out to that municipality to share the proposal that they're thinking about and explore the opportunity for partnership and see if there's interest from that municipality in working with them and using them as an intermediary. Also, I should mention for under the Project stream, so for provincial, territorial, municipal governments, indigenous governments who are applying under the Project stream can also choose to work with an intermediary. And so, these organizations... So for organizations not located within the municipalities that are selected under the Major Cities stream can also reach out to other potential partners that would be looking to apply for funding under the Project stream to work with other partners, but to act as an intermediary for them.
(Voice of Laura)
Okay, thank you, Janet. We'll move to our next question. Do units have to be self-contained units, or can they be dorm style with shared kitchen and bath?
(Voice of Lance)
Yeah, it's Lance here. So, they do not. For a unit to be considered a unit, they are typically considered to be self-contained with their own kitchen and bath, however, we do recognize projects that provide beds as opposed to self-contained units, so those are eligible as well. And in those cases, they may have shared common spaces like kitchens like shared bathrooms.
(Voice of Laura)
Okay, thank you, Lance. We'll move to our next question. Could this initiative be utilized to add modular units in existing assisted living facility?
(Voice of Kelly)
Hi, I can respond to this one. It's Kelly. The only type of new construction is indeed modular construction, so if you're adding new units, you can absolutely do so with modular construction. I would flag however, that as Lance mentioned through the presentation, we are looking... RHI is eligible for projects that have light to no care.
(Voice of Laura)
Okay. thank you, Kelly. We'll move to our next question about non-profit organizations. So, for non-profit organization applications, what is the timeline granted to secure land zoned with municipal approvals? Sometimes it can take a lot longer to get this done based on the project completion within one year is impacted.
(Voice of Lance)
Yeah. It's a great question. So, whether you're not-for-profit or you're a government entity, the application needs to demonstrate that the project can be delivered with occupancy being achieved within 12 months. If the land you're looking to secure and the process after acquiring the land to achieve zoning, to achieve or to obtain, I should say, pardon me, municipal permits, those types of things. If it's going to bring your timeline beyond that 12-month period, then it's unlikely to be eligible, or it's not unlikely, it would not be eligible under the Rapid Housing Initiative. That might be a project that would be more suited for application to the National Housing Co-Investment Fund, for example. So, it's really important to emphasize the need for speed in this program. The projects need to be delivered rapidly for them to be eligible under the Rapid Housing Initiative.
(Voice of Laura)
So just a follow-up to this one, Lance, so if a project was approved and then it is not completed within 12 months, what would be the consequences to that?
(Voice of Lance)
Yeah. Very good follow-up question. So, projects, when we execute the contribution agreement, part of the commitment that proponent is making is to deliver units within 12 months. In the event that there is a default under the agreements, there is a clause in that agreement where some or all of the contribution may be due back to CMHC if projects can't be completed. Where issues come up that are unforeseen and outside of the control of the proponent, CMHC may consider some flexibilities to allow construction to be completed beyond the 12-month period, but that would not be common. We would very much encourage proponents to submit applications where they're confident that delivery within 12 months can take place.
(Voice of Laura)
Okay, thanks for that clarification, Lance. We'll move to our next question. In a project funding stream, can you combine conversion with modular?
(Voice of Kelly)
Hi, this is Kelly. I can answer this. So if you were anticipating to do a conversion of a non-residential to residential and then want to intensify it, yes, modular housing would be the only form because you would be intensifying newly built units and the only new ability to do so for new construction under RHI is modular. So, the answer is yes, absolutely, the two can be combined. I would simply flag that you still need to respect the 12-month turn around for the occupancy of all units.
(Voice of Laura)
Okay, thank you, Kelly. We'll move to our next question. Under the Project stream, applications must include the name of the modular manufacturer. Is there a list of recommended modular manufacturers available to contact?
(Voice of Philippe Cloutier)
Hi, this is Philippe Cloutier. I can take this one. So CMHC does not have a list of recommended manufacturers, but if you do contact your client solution specialists, we'll be able to point you to different industry associations, which would be able to provide you with a list of manufacturers.
(Voice of Laura)
Okay. Thank you, Philippe. We'll move to our next question. Is an ESA Phase One required if one has already been done on the property within the past 10 years?
(Voice of Kelly)
Hi there. This is Kelly, I can answer this. The ESA Phase One would have to be within 18 months of the application.
(Voice of Laura)
Okay, thank you, Kelly. So, our next question, can you clarify multi-residential housing unit? Is semi-detached duplex considered multi-residential or must it be a triplex, fourplex and more including multi-story buildings?
(Voice of Lance)
I can take it. It's Lance here. So multi-unit residential is defined as being five units or more. So that's the short answer. If you're looking at semi-detached duplex, triplex, fourplex, those on their own would not typically be eligible unless there's a collection of properties together on a single site. So just for clarity, five-unit minimum is required for a project to be eligible under this program. With flexibilities available if projects are located on reserve in the North or in remote locations.
(Voice of Laura)
Okay, thank you, Lance. We'll move to our next question. Is it possible for a non-government entity to co-apply with a municipal government? Example, a co-ap provides land, municipality provides support and experience to qualify for the funding.
(Voice of Lance)
Yeah, I can take it. So yes, absolutely. If both proponents are eligible under this program, so they're a municipal government, provincial, territorial, indigenous governing body or organization or a not-for-profit, they can certainly enter into a partnership to deliver units under the Rapid Housing Initiative. The structure of that partnership will depend on a case-by-case basis, certainly they can negotiate that, but that would be eligible. And as Janet pointed out earlier, where governments are submitting applications, they do have the ability to appoint intermediaries to deliver units on their behalf, whether it's through construction management or the ownership of the units themselves.
(Voice of Laura)
Okay. Thank you, Lance. We'll move to our next question. Is there a maximum limit on how many housing units an indigenous community can apply for? Is there a guideline on the maximum capital contribution for projects based on bedroom count or square footage of the units? And then it's also a question about the presentation being available to be going online.
(Voice of Lance)
Yeah, so there's no maximum limit on how many units an indigenous community or any proponent can apply for. In terms of the maximum capital contribution for projects, they need to be in line on a per unit or per bed count basis. They need to be in line with the norms of the market. We'll be assessing to see if the costs are appropriate for the... Construction costs are typically being charged in that market, so we'd want to make sure that those costs are in line. In terms of the presentation going to be available online, actually ask Laura, I'm not sure what the answer to that is.
(Voice of Laura)
And you'll have to contact your client solution specialist, as we said, for information like that. But I'm going to mention there's been a lot of questions I see in the chat that's coming through from everybody, which is great. And there will be a recording of this session be available on our CMHC website for the Rapid Housing Initiative. Move along to our next question. Does the land need to already be secured to be eligible?
(Voice of Kelly)
Hi, it's Kelly. I can take this one. So, under the Project stream, those projects are chosen in order of prioritization, and there are prioritization points provided for the status of the land. So, where the proponent already owns the land or the land is owned in a leasehold interest with a lease of at least 20 years to match the affordability requirements, the proponent could avail themselves extra prioritization points. So, while not required at time of application, I would flag though that given the rapid nature of this initiative, it certainly does help a great deal in turning around the project within the 12 months. And also, would provide you with the opportunity to be granted some prioritization scoring.
(Voice of Laura)
Okay, thank you, Kelly. We'll move to our next question. Can you please define the municipal approvals? Do you mean building permits?
(Voice of Kelly)
I can take this one. So, the municipal approvals would be both building permit as well as appropriate zoning.
(Voice of Laura)
Okay, thank you, Kelly. Move to the next question. For the purpose of key documentation requirements, are indigenous governing bodies considered government entities or are they non-government entities.
(Voice of Philippe)
Hi, this is Philippe. I can take this question. So, in the context of RHI, indigenous governing bodies are indeed considered government entities. So, with regards to documents, they're only required to submit the application worksheet and the project management schedule as mentioned earlier in this presentation.
(Voice of Laura)
Okay, thank you Philippe. We'll move to our next question. Must all documents be delivered at the time of application? In particular land ownership, zoning and municipal approvals?
(Voice of Lance)
It's Lance here. So, the short answer is all the required supporting documentation must be delivered at the time of application on the RHI website. There is a document you can download that shows what the requirements are. In some cases, there will be documents that maybe... And in particular, for non-government entities, there will be documents that would be required potentially after the application has been prioritized, but before funding is disbursed. So, I would encourage you to download that document. And if you have any specific questions about any of the documents shown on that list, please contact your Client Solutions Specialist.
(Voice of Laura)
Okay, thank you, Lance. Just a real quick question here. Are labor costs eligible?
(Voice of Kelly)
Hi, this is Kelly, I can take this. So soft costs, hard costs, and contingencies are all eligible construction costs under RHI. For our non-government entities, we will require that the Cost Consultant review the budget.
(Voice of Laura)
Okay, thank you, Kelly. We'll move to our next question. Could you please give more details about what is the 100% funding to the cost in capital contribution? CMHC will offer the capital to cover the equity gap in the project.
(Voice of Lance)
Yeah, its Lance here. So, the eligible costs under the RHI are the full capital costs for pre-development as well as development of the project. And so, any of those costs that are tied directly to the completion of the project are eligible. If the proponent is bringing cash equity, land equity, or sources of contribution, capital contribution to the project, that will lower the... That reduces the amount of funding that would be required from CMHC, then their funding would be required to be contributed first to the project, and CMHC's funding would flow in after that. So, in an example, if someone's bringing in 20% of the capital costs of the project, CMHC would fund the remaining 80, and they then would disperse the funds upon the execution of the contribution agreement.
(Voice of Laura)
Okay, thank you, Lance. Move to our next question. Will transitional housing units be prioritized or assessed differently than permanent housing units? Is the three-month tenancy for transitional housing a strict requirement of the program?
(Voice of Kelly)
Hi, this is Kelly. I can assist here. So, the transitional housing units will be assessed the same way as the permanent housing units when we're looking at the assessment of the application. By transitional housing, we are looking for the tenancy to be at least three months, because RHI is really there to support permanent housing. And by permanent housing, that is defined where the tenant is in place for a minimum of three months. Whether or not there can be any flexibility to that, I would say, I don't anticipate there would be, because RHI really is, again, for permanent housing. This initiative would not... Shelters, for example, would not be eligible under this initiative, it really is a permanent form of housing.
(Voice of Laura)
Okay, thank you, Kelly. We'll move to our next question. If an organization does not need ongoing operational assistance and is able to provide affordable housing as required, will they be scored lower on their assessment?
(Voice of Lance)
Yeah, it's Lance here. So, I'll differentiate a little bit between government entities and non-government entities in this answer. When government entities are submitting an application, they are not required to submit confirmation of operational subsidy. We are relying on their ability as a government to secure the funding necessary to maintain affordability for the full term of the agreement as well as viability. And so, they would be, in terms of the prioritization, they would earn full marks under that category for ongoing operational subsidy. Whereas a non-government entity, if they don't have a confirmed source of government subsidy in place, because we're not conducting a financial assessment of proponents, we would not award any prioritization points because we wouldn't have any ability to validate that they have the capacity financially to provide that level of affordability and viability for the full 20-year term.
(Voice of Laura)
Okay, thank you, Lance. So, we'll move on to our last question. We're almost at our time for today. Is a prepaid land lease an eligible project expense?
(Voice of Philippe)
Hi, this is Philippe Cloutier again. So yes, a pre-paid land lease would be an eligible project expense. It would. So, just to reiterate the different expenses that are eligible, we're talking about land costs, whether it be through the actually purchased land or the pre-paid land lease, that would have your soft costs, your hard costs, your contingencies and potentially other costs.
(Voice of Laura)
Okay, thank you Philippe. With that, we would like to end our session and close for today. We have received many questions for this session. We thank you so much for your interest in the Rapid Housing Initiative. Information on the Initiative can be found on our web page as well as a recording to this session we had today. You are also encouraged to reach out to your Client Solutions Specialist. We also are going to be adding a link for a quick survey on your feedback on our session today. Thank you for joining us today and take care.
(End of presentation)
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