Capital for Affordable Housing in Canada

Underfunding and capital for affordable housing in Canada have been critical issues affecting the financial viability and health of existing social housing in Canada for many years.

There has also been limited funding for new development and the operating funding/rent-geared-to-income subsidies associated with it over the past 10-15 years.

There is a need to reinvest in existing housing stock and a need to build new housing for low and moderate-income households.

There is some capacity to address these issues in the sector already and there are opportunities to invest capital in areas that will reduce operating costs over time.

While this can free up money in the system, there is still a need to find alternate sources of capital to address the sector’s needs because the needs are so great.

The purpose of this research is to review and analyze different models of alternative capital for the sector.

It is oriented towards providing practical information about the feasibility of implementing one or more of these approaches in the future.

Four models were selected and nine case studies were conducted on the following: hybrid legal structures, social and affordable housing real estate investment trusts, capital raising and lending facilities, and housing bonds.

All of the models in this report can bring money into the housing sector if the deals are structured in an attractive manner for investors.

None of these models, however, should be viewed as a cure-all for bringing money into the housing sector.

Also read: Canada:The Struggle to End Homelessness