A broad coalition of the community housing sector, social impact investors and the private sector is urgently calling for federal investment and contributions to capitalize a pan-Canadian acquisition facility through the Canadian Housing Acquisition Fund Inc.
We have established a solution ready to deliver an acquisition facility that is cost-effective, fast, scalable, and flexible. We aim to leverage government support alongside impact investments to protect affordable rental housing and increase the scale of the community housing sector.
The Ask & Impact
Initial Federal Investment in the Canadian Housing Acquisition Fund over two years.
$2.5 Billion in low-interest loans, to be administered through the Fund.
$500 Million of Government contributions, delivered as grants through the Fund.
Leveraged with:
$400-600 million in private social impact investment.
Provincial, Territorial & Municipal support.
To enable the Canadian Housing Acquisition Fund to:
Protect at least 10,000 affordable homes within 2 years, with the opportunity to scale to 100,000 homes by 2034.
Stabilizing rents and protecting tenancies for over 20,000 Canadians within two years.
Recapitalization of $1 billion in new market housing supply.
Desired Federal Commitment
Two key funding elements are required, regardless of Federal funding source, all of which would flow through the Fund as a centralized aggregator – a single point of contact for all parties involved. These include the following, sized for the needs associated with securing at least 10,000 units across Canada in two years. These figures are net of government administration/monitoring costs.
For years 3-10, the Fund will propose an updated funding and financing request to the Federal government to reach our ambition of 100,000 homes by 2034.
$2.5 billion in Low-Cost Debt
Provide concessional interest rates to catalyze investment and facilitate acquisition by the community housing sector, immediately stabilizing properties, and reducing pressure to raise rents. Noting that higher rates require a larger equity contribution and/or fewer units.
Repayment Terms & Recycling Capital : At the end of the term, the property can be refinanced through insured loans, allowing the funds to be recycled.
$500 million in Rapid Impact Grants
A combination of debt and grants are required to acquire properties and maintain affordable rents and keep buildings in a good state of repair. In some cases, private social impact capital may be able to bridge the equity gap alone, but in many cases, the property’s cash flow will be insufficient to cover the interest associated with that capital, so grants will be required. Particularly in those buildings with:
Deeper affordability/lower rents (~ 80% AMR and below)
Higher operating costs, perhaps due to geographic dispersion (rural, northern etc.)
Greater renewal/repair costs in areas of high need or limited supply.
These grants would be delivered through the Fund as Rapid Impact Grants, specifically geared to help bridge that gap and serve as a “strike fund” of sorts. Grants would be available on an average of $75,000 per door when needed, tied to the above metrics, ensuring that equity is available to maximize impact. Start-up and fund administration costs would be drawn from the grant allocation as working capital.
With the Fund able to serve as an aggregator, these funds can be pooled from multiple Government sources if needed, such as:
A blend of grant dollars and public equity
A blend of CIB Equity Contributions leveraged with CMHC Retrofit Grant dollars
Given these key considerations, there are two potentially viable paths through which federal borrowing capacity could be facilitated, each with different benefits or trade-offs.
The Canadian Infrastructure Bank
CMHC, as a dedicated Acquisition Stream/Program