Canada Mortgage and Housing Corporation’s (CMHC) operating agreements with non‑profit housing co‑operatives and rental housing providers have begun to expire across Canada at a rapid rate. These agreements with their related mortgages, entered into under various federal programs between 1970 and 1994, supply housing providers with between 25 and 40 years of annual subsidy money to provide reduced monthly charges to a specified percentage of tenants and members who qualify for support. With the conclusion of these agreements and their related mortgages, housing providers will cease making mortgage payments, but at the same time, they will no longer receive housing subsidy payments — payments that subsidize some 200,000 households in Canada comprising half a million people. While not all subsidized housing providers in Canada get their subsidies through CMHC operating agreements, the potential loss is a big blow to the sector. This, on top of an already serious affordable housing shortage, is cause for concern.  

Thousands of tenants and co‑op members are fearful that increased monthly rates will force them onto bulging housing waitlists, or worse — onto the streets.   

The impending end of the operating agreements, with its potentially catastrophic results, is an opportunity to bring the issue of affordable housing into the public discourse and onto politicians’ agendas. 

So why is this not top‑of‑mind for all politicians? 

The Co‑operative Housing Federation (CHF) of Canada, with its You Hold the Key Campaign, has achieved some profile. This is particularly evident at events like the CHF Canada rally on Parliament Hill on the occasion of its AGM in June which was attended by MPs from all parties and in particular, the Liberal Party Advocate for Co‑operatives, Ottawa MP Mauril Belanger. New Liberal MP Adam Vaughan is doing his bit to highlight the issue in a statement he made in the House on September 17. The NDP too has taken a strong stand in favour of renewing the long‑term social housing operating agreements in its online petition.  

The Canadian Housing Renewal Association — the umbrella for the non‑profit rental sector — has its Housing for All campaign which calls for federal reinvestment in social housing to ensure it is protected and expanded for low-income individuals and families in communities across Canada in the lead‑up to a federal election next year. 

Provincially, organizations like the Ontario Non‑Profit Housing Association (ONPHA) have their own campaigns to highlight the need and get politicians and the public talking about — and acting on! — issues related to affordable housing.

CHF Canada, the Federation of Canadian Municipalities, and others are lobbying the feds for funding to replace the subsidies that will be lost. And this is important lobbying work to be done. But it’s risky to put all the housing sector’s eggs in one basket. 

What other solutions lie out there?

Using equity.

Equity in non‑profit and co‑op housing buildings can be used to refinance mortgages to provide subsidies, to improve housing stock, or to build new units — or some combination of the three. CHF Canada has worked with lenders and co‑ops to refinance existing CMHC mortgages or put replacement financing at mortgages’ expiration. For example, earlier this year, Mondragon Housing Co‑operative, a co‑op in Brampton, Ontario, renewed its mortgage through Alterna Savings, providing much-needed financing to allow the co‑op to restore its aging homes. 

Affordable home ownership.

Models exist that may ease some of the stress on the non‑profit and co‑operative housing sector by moving people from being renters to owners. In the last 20 years, Options for Homes and its affiliated organizations have built 6,500 affordable condominium units in Ontario. Through its combination of development on a non‑profit basis and its financial assistance to buyers, an estimated 80 per cent of buyers are folks who would not otherwise be able to afford ownership. This frees up spaces for those waiting for non‑profit rental and co‑operative housing. The Options model has been transplanted to Limbe, Cameroon; the organization is confident that the idea will be picked up closer to home too, in other parts of Canada.  

Section 37 planning benefits in Ontario.

Toronto Artscape Inc. is a non‑profit urban development organization focussed on connecting creative people to community and neighbourhood interests in a variety of ways. In condo‑booming Toronto, Artscape has successfully negotiated what’s known as “Section 37 benefits.” Section 37 in Ontario’s Planning Act is a provision allowing a municipality to ask for public realm contributions (i.e. parks, affordable housing, three-bedroom units, heritage restoration and preservation) from property developers in exchange for increases in height or density beyond existing zoning and policy allowances.    

Artscape Triangle Lofts, in Toronto’s fashionable West‑Queen‑West, is a development in which Artscape acquired a block of 68 units. Forty‑eight of these were sold to artists and arts professionals under preferred terms. When owners wish to sell, Artscape purchases them back, sharing the appreciated value with the artist/seller. The units are then re‑sold to new artists and the cycle continues. The remaining 12 condo units are owned by Artscape and rented to artists and arts professionals as affordable housing. 

Through similar Section 37 arrangements with developers, in the next few years Artscape will acquire a total of 18 more units in two other downtown developments. It’s hardly going to solve the housing crunch, but it’s a step in the right direction.

Inclusionary zoning.

Many believe, however, that significant progress can be made in the development of new non‑profit housing with the introduction of inclusionary zoning, a tool for municipalities to require developers to develop a specified proportion of units to be affordable. Inclusionary zoning has had success in other jurisdictions — most notably in the U.S. — and has found some traction in Vancouver. However, attempts in Manitoba and Ontario have so far not had the political support necessary to make a change.

In Manitoba, Bill 7 received Royal Assent on December 5, 2013 allowing municipalities to implement inclusionary zoning but not requiring it. A start, but the ball is now firmly in the municipalities’ court.   

In Ontario, NDP MPP Cheri DiNovo has introduced private member’s bills in 2010, 2013 and again in 2014 that, like Manitoba, would allow but not require Ontario municipalities to adopt inclusionary zoning by‑laws mandating a specified percentage of housing units in new housing developments of 20 or more units to be affordable. The most recent, Bill 3, has received first reading only. Toronto mayoral candidate, Olivia Chow, stands apart from her remaining fellow candidates in her support for inclusionary zoning, but should Chow win, without provincial support for the DiNovo bill, her hands will be tied on this issue.

Are the communities that can result from inclusionary zoning the desired outcome? 

An article in the New York Times in August 2014 sparked some controversy by focussing on the potential for different treatment of the “haves” and the “have-nots” in luxury buildings containing affordable units. Some buildings do this well, and some not so well — the risk is that affordable housing is created but the environment is not conducive to building respectful mixed-income communities. 

And surely the development of new affordable housing must be more than a numbers game.

Iler Campbell LLP is a law firm serving co-ops, not-for-profits, charities and socially-minded small business and individuals in Ontario.

Pro Bono provides legal information designed to educate and entertain readers. But legal information is not the same as legal advice — the application of law to an individual’s specific circumstances. While efforts are made to ensure the legal information provided through these columns is useful, we strongly recommend you consult a lawyer for assistance with your particular situation to obtain accurate advice.

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Pro Bono

Pro Bono is a monthly column written by lawyers and legal experts at Iler Campbell LLP that explores the murky legal waters activists regularly confront in doing their work.

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Celia Chandler

Celia Chandler is a contributor to rabble’s Pro Bono column. She joined Iler Campbell LLP, a law firm specializing in co-op, non-profit, and charitable law, in 2005, and was called to the bar...

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