It’s a little project with big ambitions.
The new, 35-unit housing complex for seniors being built by non-profit WoodGreen Community Services on Toronto’s Danforth Avenue may be small relative to the massive residential projects underway in Canada’s largest city. But this innovative project is raising the bar when it comes to affordable housing for seniors in need.
“One of the things we think is very important is continuing to develop housing for people who can’t afford to live in the city without social and financial supports,” says Anne Babcock, executive director of WoodGreen. The organization already operates 800 social housing units in Toronto, a city that’s notorious for a lack of affordable housing.
While WoodGreen’s $16-million Danforth project may seem like a drop in the bucket in the face of Canada’s affordable housing crisis, it is only one of the slew of new projects taking advantage of billions of dollars in funding available through Canada’s National Housing Strategy (NHS).
Launched in 2017, the $55-billion-plus NHS is the country’s first ever federal housing strategy. Its goals include reducing homelessness by half, removing about 530,000 families from housing need, renovating and modernizing about 300,000 existing homes, and building more than 125,000 new units over the next decade.
“One of the key themes [of the NHS] is bringing together different parties from public and private sectors, including private developers and non-profit organizations, to tackle this major undertaking,” says Faridah Amarsi, a construction financing manager at Canada Mortgage and Housing Corporation (CMHC), the government agency responsible for implementing the lion’s share of the NHS.
“And the NHS uses a mix of programs, tools [to do that] – grants, loans and incentives,” she says.
As part of a renewed federal leadership role in housing, the NHS has four federal funding initiatives to create new or modernize existing housing supply. It features complementary initiatives working together to address challenges across the housing continuum and spectrum of housing needs.
The WoodGreen project received funding commitment from one of the NHS’s four key initiatives, the National Housing Co-Investment Fund. About half of the $16-million needed to build the 35-unit seniors complex will come from this fund, Ms. Babcock says.
The Co-Investment Fund provides much-needed financing to create new affordable shelter, transitional and supportive housing, says Michele McMaster, Toronto affordable housing consultant with CMHC.
“It is a terrific initiative providing more than $13-billion in low-interest loans and grants,” Ms. McMaster says.
Under the initiative, eligible projects receive funding and grants up to 95 per cent of their total construction cost. Much of the funding is in the form of low-interest loans with fixed rates and 10-year terms, which can be amortized for up to 50 years.
The Co-Investment Fund is part of an effort to repair the “housing continuum” in Canada, Ms. McMaster says, which starts with emergency housing and ends with market rentals and ownership. “Right now, the continuum is stuck; there often aren’t opportunities for people to find the right housing for their needs,” she says.
For example, individuals in emergency shelters often can’t get into a transitional housing building, where they can learn the life skills for successful tenancy, because there aren’t vacancies. Consequently, individuals get stuck in shelters, which leave other people in need of emergency housing literally out on the street.
The other three NHS funding initiatives also support the creation of more affordable housing options across the country. The Federal Lands Initiative allows federal departments with surplus land to offer these assets for new affordable housing projects that are sustainable, accessible and socially inclusive. This $200-million fund supports the transfer of these lands at a discount, or even at no cost, to eligible proponents who will then turn them into affordable housing. So far, six federal properties have been listed for sale, located in Ottawa, St. John’s, Montreal, Sherbrooke, Que., and Yellowknife.
Then there’s the Affordable Housing Innovation Fund, which provides $200-million to create up to 4,000 affordable housing units. The goal of the Innovation Fund is to encourage new and creative approaches to affordable housing, from innovative funding models to new building techniques.
The fourth NHS federal funding initiative is the Rental Construction Financing initiative (RCFi), which was created to fund the construction of affordable rental housing. Ms. Amarsi says this one has the potential to make a significant impact on the supply of new rental units; it was announced in the most recent federal budget that an additional $10-billion will be earmarked for the RCFi, on top of the $3.75-billion initially announced in 2017.
“The main goal [of the RCFi] is providing low-cost loans to encourage the construction of rental housing throughout Canada, but especially in areas where vacancy rates are very low,” Ms. Amarsi says.
The RCFi provides low-interest, 10-year fixed loans, which can be amortized up to 50 years for up to 100 per cent of total construction costs. In order to be eligible, these new rental projects must meet specific criteria. For example, at least 20 per cent of a project’s units must be affordable, which means that the rents of these units cannot be more than 30 per cent of the median household income in the region. Furthermore, the total residential rental income of the project must be at least 10 per cent below potential rental income.
“In Toronto and Vancouver, for instance, household income is about $80,000,” she says. “So if you take 30 per cent of that, about $24,000 annually, the rent would be $2,000 a month.”
Ms. Amarsi adds that projects surpassing the minimum criteria for affordability, which also include factors like energy efficiency and accessibility, are given priority over those that just meet the minimum requirements.
Private developers, non-profits or municipal organizations interested in the RCFi or any of the NHS federal funding initiatives can find out how to access funding by visiting the NHS website or reaching out to a CMHC Housing Specialist. Each of the federal funding initiatives have been designed to fund sustainable, affordable housing projects that would have otherwise been impossible using traditional financing models.
Indeed, Ms. Babcock says WoodGreen’s project would have struggled to get off the ground without the NCHF. In addition to providing much-needed housing to Toronto seniors, Ms. Babcock says she is hopeful that the development will also serve as inspiration for others.
“We’re hoping others will realize that this [kind of project] is doable,” she says. “And if everybody chips in, we can make a difference.”
This content was produced by The Globe and Mail’s Globe Content Studio, in consultation with an advertiser. The Globe’s editorial department was not involved in its creation.