Leveraging community investments for affordable housing

Canada doesn’t have enough affordable housing. More capital is needed to expand existing housing and maintain long-term housing affordability through community control. Many Canadians are willing to make ethical investments to benefit their community. However, there is no widely accessible model that allows Canadian investors to provide housing for individuals in need.

This Solutions Lab will develop a scalable local investment model that makes it possible to invest ethically in housing. Union Co-operative will work with its partners and members to test ownership and financing models. The result will support populations needing an affordable and supporting place to live, and provide investors with a modest return.

Project scope and expected outcomes

Empowering members

Union Co-operative is comprised of both tenants and residents. It buys existing buildings at risk of being acquired by investors looking to maximize profits. It then rents units at affordable rates to existing housing providers and community members experiencing core housing need. One of its partners is Reception House Waterloo Region, which provides housing for government-assisted refugees.

A local investment option

The Lab is seeking to create a replicable local investment option that is suitable for retail-level investors. That model also must be able to finance additional affordable housing purchases and maintain what has already been acquired.

The Lab will be conducted over 5 phases:

1. The Definition Phase will create the project steering committee, design an engagement strategy and identify additional Lab participants.
2. The Discovery Phase will involve background research by the research team. The resulting research report will explore models used elsewhere for citizen investment in affordable housing. A discussion paper will be written to guide the steering committee.
3. The Development Phase will create a list of ownership structures for community investment in affordable housing. Some different options include a co-operative, co-operative investment corporation and non-profit organization. The legal and accounting team will research each option, and lab participants will create a short list of potential models. The legal and accounting team will then analyze the strengths and weaknesses of each.
4. The Prototype and Test/Delivery Phase involves lab participants selecting an ownership model for implementation. Governance, financial and legal templates will be created and presented to the directors of Union Co-operative for feedback.
5. The Roadmap Phase will see the governing documents, contracts and amendments given to the board of directors and members. After board approval, the offering statement will be submitted to the regulator.

Replicating the Lab’s process

The Lab will produce toolkits that allow other organizations to replicate its process. A website will be developed to publish a background report, sample articles of incorporation and a tax strategy paper. Lab templates will also be shared through the website. The goal is to reach citizens, government and non-profit practitioners and academic audiences with the Lab’s materials.