In this Member Workshop with Vancity Community Investment Bank (VCIB), gain the expertise and understanding needed to create a lasting influence on sustainable and affordable housing projects in your communities.
Event Information
In today's ever-evolving economic landscape, the pursuit of sustainable, affordable housing has never been more critical. Join us for this enlightening webinar to acquire the knowledge and insights necessary to make a lasting impact on sustainable, affordable housing initiatives within our communities.
An expert panel will offer diverse perspectives on the challenges and opportunities that may arise, offering you the opportunity to shape the creation of housing solutions in your communities.
By participating in this webinar, you will:
- Gain Financing Know-how: Discover how to strategically position your organization for success in securing financing, ensuring your housing projects have the financial stability they need to thrive.
- Access Funding & Expertise: Learn about the array of grant funding opportunities available and how to leverage technical assistance to advance your housing initiatives from concept to shovel-ready reality.
- Explore Synergies: Uncover the possibilities at the intersection of climate-conscious practices and long-term affordability, enabling you to align your housing projects with environmental and economic sustainability goals.
Workshop Video
Thank you for your interest in our event! The event has now passed, but we are pleased to share that the recording is available for you to review. Catch up on all the valuable insights and information shared during the event. We hope you find it informative and useful.
0:10
good morning everyone my name is Taran seula and I'm the senior manager of member engagement
0:17
here at the Toronto region Board of Trade thank you for joining us this morning for our valued member van city's
0:23
workshop on the housing puzzle creating and conserving affordable sustainable
0:28
homes today's enlightening webinar will offer the knowledge and insights necessary to make a lasting impact on
0:35
sustainable affordable housing initiatives within our communities by way of an expert panel that will debate
0:42
diverse perspectives on the challenges and opportunities that may arise offering you the opportunity to shape
0:48
the creation of Housing Solutions in your communities before we begin I'd like to
0:54
acknowledge this land on which we are meeting is home to diverse First Nations Inuit and M People though you could be
1:01
joining us or watching from anywhere the board's offices are located on the traditional territory of many indigenous
1:07
Nations they share with us a sense of responsibility for intergenerational Equity the well-being of today and
1:15
tomorrow and now without further Ado I'll pass the mic over to Eric to get things
1:20
started thank you very much Taran um I will share my screen and get right into
1:28
it if I can figure it out there we
1:41
go all right so thanks very much everyone for joining us today um like Taran said we're here to discuss uh how
1:48
to create conserve affordable and sustainable homes um across Toronto and the
1:54
GTA um with us today we have a very diverse panel of guests and uh expert
2:01
speakers um I'll pass it along in order that you see them on the screen uh Julia would you start uh and introduce
2:07
yourself please hi good morning uh I'm Julia Langer I'm the CEO of the
2:12
atmospheric fund which is H an agency created by the city of Toronto in 1991
2:19
before climate change was really headline news to address um this big Global problem of climate change but
2:26
what do we do about it locally and we are now endowed also by province of Ontario and government of Canada to uh
2:33
to advance that Mandate of lowc carbon Solutions throughout the greater tronto Hamilton
2:41
area uh Mitch hi I'm Mitch Gillan uh I'm with
2:46
Hallmark we are a privately held uh developer owner and manager of uh real
2:55
estate across the city primarily the city of Toronto um across asset class so
3:00
office retail industrial and um housing as
3:06
well right than Eric hello B qu everyone my
3:11
name is Ray Sullivan I'm coming to you from gonan initi Big territory in Ottawa and I work for the Canadian housing and
3:17
renewal Association we are the National voice of the community housing sector and happy to be joining you this
3:24
morning all right and uh I of course I'm Eric Visser director of commercial real estate at Van City Community Investment
3:30
Bank I work with a team of account managers and oversee um a portfolio of
3:36
social purpose real estate uh loans so we'll get right into it here uh
3:43
just a very brief overview on um housing in Toronto and a bit of a primer on what we're about to discuss today so as we
3:50
all know uh rents are increasing uh depending on who you ask or who you how you measure or what you're measuring um
3:57
the rate of these increases varies you know cmhc see uh their latest um publicly available data I think cited
4:03
about a 6% annual increase in rents year-over-year as of October 2022 um new report obviously coming soon
4:12
and uh you know you can compare that with the Toronto region real estate board uh reporting on condo rents
4:17
increasing about 10% year-over-year as of Q2 2023 and so you know I think we
4:24
all have anecdotal stories and evidence um you know I work with like I said a team of young account managers and many
4:30
of them are getting their first or second apartments in the city of Toronto and the rents that they are paying are
4:35
you know somewhat staggering frankly um so it'll be very interesting to see uh
4:41
updated cmhc data come out soon um but I think we can all just generally acknowledge that rents are increasing uh
4:48
rapidly in Toronto it's becoming an issue um you know that also is compared with home prices increasing you know
4:55
there's been maybe a little bit of relief in terms of absolute home prices recently if you're looking to get into
5:02
the market however that's being offset by you know financing costs with rising
5:07
Rising interest rates and so affordability on the ownership side of the equation is also uh deteriorating
5:14
and not looking um like there's much hope on the horizon for some people at least that's the uh the general feedback
5:21
that I get from some people um anecdotally you know that all leads to
5:26
of course shelter needs increasing and so you know I think it can be a little
5:32
bit heartbreaking to drive around the city of Toronto or the greater Toronto area and see so many people um
5:38
experiencing homelessness and just generally being in need of proper housing um city of Toronto um their uh
5:46
shelter support and housing Administration sites in their 2022 annual report that they provided uh
5:53
support to over 20,700 individuals um that's after adding 1500 beds in 2022 um
6:01
you know that just I think is a quick bullet point to demonstrate the massive need for more housing and a specifically
6:07
affordable housing in torona um it's not all doom and gloom uh the SSH was able
6:13
to transition about 4,500 people into permanent housing in 2022 um you know
6:20
the other uh part that we can't forget to mention specifically on this panel is that of course emissions from buildings
6:26
and construction are increasing um United Nations report in uh 2020 or 2022
6:32
cited 2020 data which showed that emissions from building and construction um have hit an all-time high in 2020
6:40
that's despite increasing efficiencies in the way that we build and operate our buildings and so really it's just the
6:46
increasing floor area out there is outpacing increases and efficiencies that we're
6:51
finding it's not all doom and gloom there are uh a multiple a multitude of
6:57
programs and grants out there from various levels of government various organizations so you have you know the
7:02
feds um you know with programs like the codes acceleration funds the Deep
7:07
retrofit accelerator initiative um green neighborhoods pilot um they created the Canadian infrastructure bank and they
7:14
they're doing a lot of great work on a on a pretty large scale um and most recently the federal government removed
7:20
GST from uh purpose built rental construction and I know that that's already got a number of projects off the
7:26
ground um provincial governments you know Ontario specifically has a pretty
7:32
lofty goal of 1.5 million homes to build by 20 2031 um seems like most of their
7:39
initiatives at least with the current Administration are focused on um the bureaucratic process and finding efficiencies there there have been um
7:46
some efficiencies found and some other challenges I suppose uh experienced along long the way um but let's not
7:53
forget that the provincial government does offer a lot of subsidies um geared directly to affordable housing and
7:58
housing support reports and so um you know the the provincial government does do a lot and we see that at BCI and some
8:04
of the underwriting that we we perform on various affordable housing projects um Municipal supports those can you know
8:12
in terms of Toronto um you know we can look at Mira as a an amazing program
8:17
which you know I think we all just wish it was uh able to be deployed at a larger scale um VCI be very happy to uh
8:25
I think just a week or two uh help a nonprofit St Jude's Community Home acquire uh a property which they had
8:31
been releasing for years and was um about to be put up for sale and um you
8:36
know risk losing those affordable and supportive units um which otherwise were
8:42
being operated by a nonprofit the the Mira program was able to provide a straightup grant um to uh St jice the
8:49
nonprofit owner or future owner and operator and coupled with a bciv first mortgage we were able to preserve I
8:55
think about 30 units uh of housing um support of housing uh to be preserved
9:00
and perpetuating um cmhc I think many of us are familiar with the various programs
9:06
that they have to offer um they've got things like the co-investment fund so various granting and lending options
9:12
they've got the rapid Housing Initiative they have their mult uh mli select program which um it was such a great
9:19
program that they're now sitting at a substantial backlog in applications um you know to look at it optimistically
9:25
it's it's a good problem to have um that they offered such a great program um we also have private foundations you
9:33
know uh vcib has done a lot of work with groups that um you know such as Land Trust which are able to leverage private
9:38
Foundation Capital um not necessarily in the form of Grants sometimes it is in the form of Grants um but to use that
9:45
Capital um in a unique way to help acquire and preserve affordable housing and of course we can't forget to
9:52
mention uh Julia's organization the atmospheric fund which has various programs directed at not necessarily AFF
9:59
ability specifically uh but marrying uh sustainability a lot of the time with
10:05
affordability um just to touch on impact um vcib uh I think is a great case
10:11
example it might be a little biased um we are Canada's only 100% impact bank
10:17
and a lot of people have to ask what does that mean and it's totally understandable um the way I like to sum it up is that every dollar we land out
10:24
has to have a net positive impact on the community that it's going into and so um
10:29
you know what does that mean well it's got to be measurable and we do measure that on every single transaction that we do with an proprietary impact score card
10:37
um what that means is we have um various inputs which meas measure things like
10:43
Community um the community engagement is it serving uh underserved groups uh and to what degree um affordability and to
10:50
what degree is it affordable as well as the environment and so things like uh
10:55
building certif certif certifications um such as passive host various lead
11:01
certifications Bulma certifications the Tron green standard tier two and above
11:08
um but also retrofits um and how um these projects achieve Energy savings so
11:13
things like Geo exchange or solar inst installations rainwater collection those
11:18
kind of things um of course you can't uh when
11:24
you're trying to develop any form of affordable housing you are going to generally need Del layer grants
11:29
subsidies and debt financing um there's a lot of complexity surprising amount of
11:35
complexity that goes into some of this and so you need a lender that uh takes the time to understand these funding
11:41
agreements um and sometimes come up with unique um structure loan structures and funding structures um so really it's a
11:48
finding lender with uh the ability to be creative and flexible um of course that's where I like to think we come in
11:55
um so please feel free to reach out to me after the panel if you want to discuss anything um but with all that let's get uh right
12:02
to our discussion so um to lead it off
12:10
um first question where do you see the biggest opportunity to create new affordable and sustainable housing and
12:17
maybe this one I'll invite Ray to start yeah thanks Eric and you know you kind
12:22
of mentioned in your your opening comments that Ontario has set a goal of building one and a half million homes
12:28
between now in in 2031 but what we also know is that about almost 20% of
12:34
households in in the Toronto area can't afford Market rates for housing and if you look at renters it's like over 30%
12:40
who can't afford Market rents for housing so we have to look at that Target in terms of who was going to be
12:47
able to afford those homes you know where is the target for nonprofit Co-op and and community housing and that right
12:55
now about four or five% of the housing stock is is is community housing we need to actually double that you know just
13:01
just to get in in the range of of the oecd and G7 average when it comes to co-op and and nonprofit housing one of
13:09
the biggest opportunities is going to be government owned land you know the high cost of land is part of what drives up
13:16
the the cost of of development governments that I've talked to at all three orders of government if you been
13:22
telling me well we we don't have cash for for community housing yeah but you have land and land has value so how can
13:29
prioritize government-owned land from all three orders of government uh to
13:34
build community housing and and you know and I've I've worked in community housing for for almost 25 years now and
13:42
uh we've always been ready to to build at that that Leading Edge of of
13:47
environmental sustainability I used to live in a in a nonprofit town home that was built in 1981 the first
13:54
multi-residential r2000 home you know this is not this is not new stuff I was involved in building building the first
13:59
multi-residential passive home those opportunities are there but we need to take advantage of the land uh to help
14:06
bring the cost down yeah Ray I think like that does
14:11
tail into kind of I think you know the the traditional developer answer which is like it's all
14:17
Supply um and if we can increase the supply I think that it's going to create
14:23
more opportunities for Market housing naturally but also more opportunities for collaboration between private
14:29
developers um and you know not for nonprofit land trust and other um you
14:37
know affordable or social housing providers and that you know if we can
14:42
open up the floodgates of that land like we try and buy land often uh and find
14:49
these opportunities and it's candidly it's it's hard it's very difficult to Source those
14:56
opportunities um to you know own them and then start that process um and so
15:02
you know starting with that key like it's you know it's the the key ingredient um that you need is is that
15:08
land side um and there are various levels of government like you said right that have have access to that um and I
15:15
think it takes the collaboration between the private sector and public sector
15:21
groups to to unlock unlock that land um or retrofit buildings on that land you
15:27
know working with Julia um to unlock you know a different use potentially for it or something well there's a there's kind
15:35
of a an a a math that needs to be done in terms of what is affordability and
15:42
and it has to do uh obviously with the the first cost like the capital cost of
15:47
building you know the land and the materials and and all of that but then also the operation of those buildings
15:55
and then how do you what's your life like when you're in those buildings and
16:01
and so in that context in terms of your your question about we it's like wear matters like if we don't have location
16:08
efficient um construction then people are going to need a car which is super
16:14
expensive to get anywhere so if we're Transit accessible then your costs of
16:21
transportation and also your life your time you don't have to pay for more daycare because it takes you an hour to
16:28
get your kid after school you know so so we need to be thinking really broadly about what and where we're building in
16:35
order to achieve affordability for the end user and in that context like Size
16:43
Matters as well so it's like all the land all the labor all the materials
16:48
that go into each square foot contribute to the cost so if we're not thinking
16:53
about like the amount of you know like the size of you know what you you're
16:59
where you're living then it's automatically potentially not affordable you know this is where you know the the
17:05
the 1.5 million homes well we have to think about like what's up and where and
17:12
and in that sense you know one of the things we've talked about like there's been a lot of talk about the missing
17:17
middle like the not just new land like it's that infill and so Toronto's um for
17:23
Plex as of right I think is going to revolutionize some of this thinking but also so we started talking about the
17:30
missing little like um auxiliary Suites like you know the granny suits the
17:35
garden suets the secondary sweets that kind of thing like that land already exists it's already
17:41
serviced and and like if you add that up it's a lot of potential homes and it
17:47
also from an affordability perspective will help people who maybe are suffering
17:53
right now with high interest rates so will'll help them pay mortgages you know so think we need to think really big
17:59
like wider about what is Affordable think you're absolutely right Julia too that you know that that where
18:05
matters as as much as what and I I want to give a plug to a fantastic resource uh from the housing assessment resource
18:12
tools group at a UBC hr. ubc.ca uh they've actually done an
18:17
inventory in Toronto and Peele in a number of different Municipal areas of government own land and scored it
18:22
according to those exactly exactly those kinds of factors you know proximity to transit to amenities to toow grocery in
18:28
retail and those sorts of things it's a perfect starting point when when looking at those those opportunities and and
18:34
Mitch yeah I mean I I think really to get the kind of scale that we need in terms of Supply in terms of both private
18:41
market and non-market Supply we need to work together the the private and the nonprofit sector great organizations
18:46
like woodgreen in the Toronto area and many others that are doing exactly that and I hope we can continue talking about
18:51
it yeah I like that full like it's across the Spectrum right is where we have we have to go big big sites and
18:59
Julie to your point that those big sites take a long time like just regardless of what we do and in the interm you know
19:05
these the missing what the missing little I think that's fantastic um I sto
19:11
that from Shere ber she's she yeah that like that that can be
19:16
delivered just factually it can be delivered more quickly um so I think that's really you know it's a good with
19:22
multiple benefits for affordability right so the people who are having trouble affording their existing home
19:28
homes maybe get some help with with that and so there's there's that that sort of
19:33
multiple layers of of benefit and affordability um support yeah I I'm glad Julie that you
19:40
brought up uh the Lan way granny Suite uh housing concept it's something that we're working on at bcib because um the
19:47
feedback we've got from the market is that um you know many of the traditional Banks don't yet fully understand or appreciate
19:56
um the value of a lean we have house it's a bit of a novel concept still to this point um there's about I think the
20:03
last bit of research I found was there's something like 38,000 eligible lots for laneway house in Toronto and that was
20:10
before the granny Suite or garden Suite um uh concept was permitted so a lot of
20:16
opportunity there and totally agree that the missing little is something that can't be forgotten here um moving on to
20:23
the next part of the discussion here um you know we talked a lot about where we
20:28
want to build um and some challenges that Mitch even touched on um but my question is what is standing in the way
20:35
of creating more affordable and sustainable housing today I I'll give the um you know I'm
20:42
I'm the developer so I have to I have to be I have to play my role and I'll say you know it's it's the red tape that's
20:50
holding this up it it takes a very long time when you do have a site to get it
20:56
through the municipal approval process the way like what what I say is in Toronto each housing project
21:05
it's like they're making a custom suit so you go in you have the land and then you go and you talk about everything
21:10
really specific to the land and if you believe we have a h in crisis you're not
21:16
you don't need a custom to you need off the rack you need vintage we need all
21:22
different Ty types of Supply to come in but we can't we can't be perect
21:28
we have to understand we're not going to be perfect we have to try we have to create a landscape a legislative
21:36
landscape that allows to unlock that Supply um from a zoning perspective um
21:43
you know to standardize the situations um like with laneway housing boom you get it's automatically approved
21:50
your garden Suite you're entitled to it where's that in the in the middle where's that in midrise we had a
21:56
mid-rise project the zoning we hit Toronto's midline midrise guidelines
22:02
like to a t it still took us three years to get it approved you know that's that's very challenging um so I I think
22:10
there are and then the next thing is the construction trades to build it that's that's the next challenge once we figure
22:16
out the zoning our our one of our fears is we're you know we're going to start making this leap on the zoning as you
22:23
know some levels of government are saying okay here we that Transit we found the wear now we're going to say
22:29
you you know we need the density there then we need the skill trade to build it so it's it's it's a layer of problems I
22:35
I view it standing in the way um and we need a we need a fully focused coordinated effort to to to bring this
22:42
to to fruition I don't know Ray or Julia how do you you know what am I
22:48
missing I I I think one of the missing pieces is the public um that you know
22:55
that that there has been a lot of um sort of reporting about the nimi you
23:00
know like people are opposing this uh you know like densification in their neighborhoods Etc and and that is you
23:09
know so and then that is part of your um you know red tape because the role of
23:15
the municipality is to you know to both get some get facilitate uh construction
23:23
but also look after their citizens and their you know their rights so I think there has to be a lot that you know
23:30
what's in in the way is really not a common understanding of where our Ci's
23:36
going um and so people need information they need they need some certainty they
23:41
need to know that they're um that their perspectives and and you know that their
23:48
real estate values or whatever are going to be actually taken care of and not undermined so so I think that there's
23:54
you know that that that becomes like oh you have to do something well no we all have to do something we have to actually
24:01
have uh you know a com a sort of perspective a common understanding from
24:06
the developers from the municipality from the citizens you know from you know supported by nonprofits or to to see
24:14
where we're going why we're going there what the value proposition is so I I think you know just too easily gets
24:21
blamed on red tape I think you're right Julie and I and I think that that idea of certainty
24:27
or predictability is a big part of it I actually think we're reaching like like a Tipping Point on on nimi there's a
24:33
much larger yimi voices particularly in in in urban centers calling for more
24:38
density more neighbors more more more development and it's great to see you know through with a little bit of
24:45
pushing in fact from the federal government under the housing accelerator fund that municipality by municipality is starting to allow four stories or
24:52
four units as of right you know across across urban areas and that's the kind of predict stability and certainty that
24:59
I think will facilitate a lot more a lot more housing construction and hopefully even more density you know along main
25:05
streets and areas the recommendations we made about how to use the housing
25:10
accelerator fund and and how to actually in fact it was about how to get most points for your application was really a
25:17
way to include that Community engagement in the application for housing
25:23
accelerator fund money because then that will streamline your time to you know
25:29
from concept to development and you just building that in and uh and showing as
25:35
it's the value that we are all going to get from this exactly and I want I want to pick up on something that Mitch has
25:41
said great great analogy about about buying a suit Mitch you know and it's so true like so much of our housing is is a
25:47
bespoke development you know a custom tailored architecturally and and constructionwise for every for every
25:54
individual side and that does drive up construction cost there's a number number of groups who are doing really
25:59
interesting stuff around around panelization and and off-site construction I think part of the next
26:04
step is to actually have um prefabricated parts and elements that an
26:09
architect can design toward you know rather than just having those bespoke parts built off site a Lego set for
26:17
example of of of housing elements the Ikea flat pack of of housing construction that can drive down those
26:23
construction costs and make it a lot easier you know 20 20 30 years ago uh 10 to 20% of housing starts were were
26:31
Co-op and and nonprofit housing construction costs and borrowing costs are so much higher now it's almost
26:37
impossible to achieve those kinds of numbers the kinds of you know great successes like like the St Lawrence
26:42
Market neighborhood in in downtown Toronto and we need to see that again and part of that is is is is Private
26:48
Industry and the nonprofit sector working together to to figure out ways of building this at good quality at
26:56
lower cost I'm surprised that you didn't talk about you know just cost overall because we're
27:02
certainly um in in the retrofit space um and certainly hearing about that in the
27:08
new construction area saying you know seeing that obviously um interest rates and and just like the the overall cost
27:15
of Labor overall cost of materials is really you know just like increasing the cost of everything and and you know so
27:24
you know I don't know what people are waiting for like are we waiting for everybody to sort of realize that costs
27:30
are going to be higher going forward or like hoping that they go down you know so I think that there's maybe a bit of a
27:37
kind of pause or you know just like not sure where to go and um you so I I don't
27:44
have the crystal ball about like The Meta Eon economic situation but you I
27:49
think that's certainly at play you know just psychologically and technically
27:54
right it it oh go ahead r I was going to say you know when I think of the idea of of doubling the pace of
28:01
housing production where we're already getting constraints and pressure on on labor Supply and on on construction
28:07
materials increasing is going to put even more pressure on those and might actually drive up the embedded cost of
28:13
construction have to rethink the way that we're doing it as well yeah I you know to the cost perspective I think
28:20
we've seen you know the market you know as of today let's you know look at it on on Market unit basis and the city of
28:28
Toronto um if you want to sell New Market housing the you know the market
28:34
has been very strong for a number of years it's it's not there right now you
28:40
you know if you're launching a condominium in the first you know say six months of marketing it more groups
28:46
are not reaching the pre pre-sale threshold they need to get Bank financing to start the project so even
28:53
if you are selling you might not be able to sell enough units to start so so that's that's challenging and on the
28:59
rental housing side um you know we have a project for example where from our
29:05
land acquisition to now the amount of equity we need to invest and that was
29:11
about two or three years amount of equity we need to invest to start the project and then borrow the money has
29:17
doubled um and these are you know these are projects in the hundreds of millions
29:23
and that you know so you're going to put up a portion of that as your Equity so you know this a the GST change helps
29:31
it's a start there's still a lot of changes and and you know in many instan you can't start the project because
29:37
quite frankly you have to go and find the money and that might be from it
29:42
could be from you know a market investor it could be from another sponsor or collaborating group so there's a lot you
29:49
know there seems to be a Hold Up In This Moment In Time on new Supply probably when we need it
29:54
most so I think what I'm hearing is there is a lot of concerns that are shared between both the for-profit and
30:01
nonprofit sector um you know concerns like labor costs costs in general financing costs um and really I'm
30:09
hearing a need for or a desire for at least uh some flexibility from the lenders um which is where maybe I can uh
30:19
help we we'll talk much um moving on to another question here um I think this is
30:26
probably best started with uh Julia um what's your view on the intersectionality of affordability and
30:34
sustainability well I guess I I probably sort of launched into that given that that's top of my thing but um I guess
30:42
just stepping back a bit the context to which I I come at this is that you know
30:48
we have multiple challenges maybe even crises we
30:54
have a climate crisis which you know that's the sort of the the main thing I I work on we have uh we've had a
31:00
pandemic so like a you know crisis we have an equity crisis we have uh you
31:07
know and we've got Rising interest rates and and you know the economic uh sort of
31:13
uncertainty and um and so in a you when you're trying to solve like these big
31:19
picture issues I I go back to a quote from Eisenhower don't like to quote the military but you know he said sometimes
31:26
if you've got a really big problem that's really hard to solve the only way to go at it is is to make it bigger and
31:34
so the the approach that that the atmospheric fund takes is like let's
31:39
multisol because carbon is not the only challenge that you know the world needs
31:45
to tackle um and people are probably in fact more worried about their economic
31:50
situation or you know their health or whatever and so if we can actually
31:55
multisolve our way through this then we'll we'll have more traction we'll
32:01
have actually more Capital because you know there's all you know there's there's different resources that go to
32:07
solve all these various problems and um and so we can we can layer and stack uh
32:14
the solutions so we need a low carbon housing we need healthy housing we need
32:20
resilient housing because climate change is getting worse we're seeing the impacts right here um and we need
32:27
affordable housing so so if we you like we should not talk about housing without
32:33
talking about all of these important objectives and finding ways to
32:40
and and and in fact what we're seeing in the retrofit space is that when we don't pay attention to these things at the
32:46
beginning they're even more expensive to deal with at the back end um it's
32:52
possible it's technically possible it's actually financially possible but it's more expensive ensive and the reality is
32:59
that if we don't build low carbon housing just speaking to the carbon side of things then uh we will never achieve
33:08
our uh climate objectives the municipal ones that many municipalities have set
33:15
the provincial ones um and the federal ones and then our contribution to the
33:20
international um Paris agreement so it's just impossible the math does not add up
33:27
um if you do not build low carbon housing so that's kind of the you know I think an agenda that we need to you and
33:35
and then you know then from the solution side like that's the problem side well it's totally possible you know I'm sure
33:41
you've seen case studies um there are organizations that specialize in this we
33:47
have documented how like healthier buildings are when you build them in a resilient and low carbon way and so then
33:55
that the the the Sol solution set has to be okay how do we pay for all of that because everybody says oh it's more
34:00
expensive well actually not really um but we have to be more creative and this
34:06
is why it's great to have a banker on the team um uh because it really is
34:11
about you know how to we stack up that money you mentioned that in your slide Eric um but even beyond that you know
34:19
something that we've been thinking about is like when we make healthier buildings in a publicly funded healthare system
34:25
that's avoided for OIP can I have some of that money now to prevent those
34:32
health challenges that will be caused by poor quality housing you know so we
34:37
don't actually we're so siloed and we have to again think bigger and and think
34:43
of like who are who all the players who need to collaborate in this agenda are
34:49
so that we can actually come out with good Solutions yeah I love that Julia essentially what I'm hearing is that the
34:56
intersection is not an intersection it's a 100% overlap um Mitch maybe I could
35:02
pass that question to you on the intersectionality of affordability and sustainability um I know I'm very
35:08
familiar with one of your projects that's uh taking a deep dive on uh sustainability and I know it's a focus
35:13
for Hallmark overall yeah thanks I was I I'm now listening to Julia I'm feeling more
35:21
inspired about it as as you know the initial thing that comes into you know
35:27
your mind is it's it's going to be more expensive and it's going to be inflationary and that you know
35:33
contradicts with delivering something that's affordable I think you know you
35:40
have to I like this think bigger or like think to the next level like you know that profit is at a point in time think
35:48
of it over a longer term you we know when we look at it it's the right
35:54
decision over the long run it's trying to you know make every decision with
36:00
that longer term view knowing that there's what's the payback period and sometimes the payback period like you
36:07
know it can be a long time and I will I'll commend you know there are
36:14
increasingly programs to help you finance that that's really what you know what developers need if they can Finance
36:21
it in a good way you know you can cover that initial it's typically an upfront Capital cost so so how can you know that
36:28
be better there's you know working with t on projects to figure that out the
36:33
Canadian infrastructure Bank you know they are and through their Partners able
36:39
to provide financing that lets you take that step further they're able to help you push further Beyond um you know what
36:48
you might normally in terms of a retrofit to get that but that this is all it's also very new and so we need
36:54
you know Partners such as yourself Eric and Julia to to help the private sector who you know will will be on you know
37:02
we'll we'll get on our Soap Box when it comes to zoning but we can be a bit one-dimensional in our thinking we need
37:08
to thinking bigger I love like I Julia that really like resonates with me we we
37:14
try and do it I think the sector you you try um but you know like I said nobody's
37:19
perfect with it you need collaborators to help you get there R if you if you don't mind I'm going to jump in with the one example which is like not new at all
37:27
in 2007 we started talking with um the condo developers because that's what was
37:35
popping up right like more and more and they were building to code not very
37:41
efficient and so we said how can we actually help you through and you know we're an investor staff is an endowment
37:47
we invest our endowment we look for a return on investment but it's like and but we look for the impact and for that
37:54
Financial Innovation so we came up with was something that basically we call the green condo loan which was basically we
38:01
provided the incremental cost of going 25% above code from an Energy Efficiency
38:09
perspective the loan was provided to the developer and then it was transferred
38:15
and it was a separate loan it was in the Declarations that there's this loan and you know it's like two or $3,000 more
38:21
per unit but in a very hot condo Market they'll buy the unit down the street if it's too or $3,000 more per unit so we
38:28
just wanted to get that out of the picture separate loan transferred to the condo Corporation upon closing they
38:35
repay taas because they're the beneficiaries of the savings so what you
38:41
and so there you go you've got what you know better Motors better lighting better installation better um uh you
38:49
like better Windows and you've got a Mor your operating cost as an owner are and
38:56
so um and then that helped the city put the trauma green standard in place
39:02
because they said oh look they can build better buildings and so they raised the bar so sometimes it's a financial
39:08
structure it's not you like it really is about creative financing yeah to do this and you know
39:15
another idea is that you can have thirdparty um energy developers so don't
39:22
put in like don't you pay for the HVAC system like the real to get a third
39:28
party to drill a bunch of holes and put in a geothermal system and then own and
39:33
operate that system it's not on your your Capital cost they own and operate
39:38
it and they're you know every and then the owners have a very affordable and efficient and low carbon system so I
39:45
think we're we're not sort of thinking up the whole picture of who can provide Capital who can actually you know we
39:52
were willing to wait eight years to be repaid on that loan you know the developer of third-party systems is
39:59
willing to go 20 years because or 30 years because that's the life of the system so you know that's the the
40:06
partnership and the and the financial structuring that can help move the dial
40:11
on this that's that's that's a brilliant model especially where it's harder to
40:16
find those Returns on investment in in in the condo Market they're easier in the rental market of course because you end up being the operative building I
40:23
want to just quickly share the story from uh several years ago I mentioned that the nonprofit that I used to work
40:28
at we were involved as a development consultant in in creating the first multi-residential passive house certified building here in Ottawa and uh
40:36
after a couple months of operation uh they got their first hydro bill and it came with Hydro inspectors because
40:41
Ottawa Hydro when they looked at the kilowatt consumption they thought the meter must be broken and we'd better
40:47
inspect it because it was just a couple of dollars for a 40 unit 40 unit building so yeah those possibilities are
40:52
there yeah and I think um that's a great way to illustr the you know sort of
40:58
wrapping up that that discussion is basically Mitch touched on taking a long-term view Julia touched on it's not
41:05
they're not two separate issues they are two issues that work in tandem um and then Ry you summing it up with that
41:11
example which is you know it might be a bit of a higher upfront cost but that Energy savings if you're operating with
41:18
affordability in mind those savings get passed directly to your tenants um you know if you're for a profit then that
41:24
gets you know hopefully right to uh your net operating income and you know it ends up with uh a higher value building
41:31
uh at the end of it and so um yeah multiple ways to attack it and Julia I I really like the um that sort of
41:37
off-balance sheet structure approach to um the geothermal it's something that bcib has done uh in the past and we
41:44
should definitely uh chat more offline about that on how we can work together better
41:49
um so I think we did have a few more prepared questions um but I think we've
41:55
covered a lot of the the discussion that um or or the topics that I was hoping to to to ask to our panelists and looking
42:01
at the clock here I'm realizing we're you know almost 15 minutes out um from wrapping up this panel so I do want to
42:07
make sure we get uh get time to um get to some audience questions and so um
42:13
just scanning through the chat here um I've got a question coming in um which reads most government uh Canadian
42:20
government real estate organizations like Canada lands infrastructure Ontario Etc have explicit legal requir to obtain
42:26
full open market value for those Government properties how can those Surplus government lands be allocated
42:32
for nonprofit affordable housing development if the nonprofits are forced to pay market value for the land um Ray
42:39
I saw you you touched on that in the chat there um but maybe you could uh elaborate for the the broader group yeah
42:45
so for example at the federal level there's there's a program called the federal lands initiative that allocates about 20 million dollar a year for the
42:52
federal government to pay itself for market value for all that Surplus Federal feral property right across the
42:57
country which is absurd right there's more than $20 million of that land a year available in Toronto alone let
43:03
alone across the whole country so we're working with the federal government to really change the thinking on that you
43:08
know sure if the accounting rules say that if you're disposing of the land you have to pay full market value don't dispose of the land lease it out to a
43:15
nonprofit or Co-op for a 99 year lease for a dollar you still retain the asset on your Valance sheet but you've
43:21
leveraged that to create the kind of affordable housing that is also your goal
43:28
great um another audience question coming in um is rather than selling
43:33
Government properties why not partner with uh pools of capital like pensions to co-own and operate these hosing
43:39
projects um you know it sort of also ties into something I wanted to touch on with uh with Mitch was about the um
43:46
potential for um Partnerships between the for-profit nonprofit sectors so um
43:52
Mitch do you have anything to to respond with to that question yeah you know I think it it you know really doves tailed
43:59
nicely into what ra just said like yeah land leas model is you know a very effective way if the Mandate is to
44:05
continue to own those you know those land you know equally the Partnerships
44:11
that could exist between the private sector and not for-profit or affordable housing providers are numerous and when
44:18
we see you know a lot of these they're coming out through requests for proposals and different offerings right
44:25
now across the city of Toronto pertaining to the Ontario line um you know there are opportunities to
44:31
collaborate uh with not for not for-profits or um you know other
44:36
providers and that's what the private sector you know should be doing I think the city you know has kind of been
44:43
thinking around we call it inclusionary zoning that means how much affordable housing is required like the answer to
44:49
that is you know yes there should be affordable housing and all these developments and like let's bring the
44:55
right part Partners to those opportunities to deliver that housing together um could there be a better
45:02
structure of selection of those providers you know maybe that's something that could happen before the
45:07
RFP goes out hey we have we have this group we've identified their need in the area do this RFP business you're going
45:14
to collaborate with to bring those parties together um that would work equally as well as you know the private
45:20
sector going out and finding those um opportunities as well um but it's you
45:25
know those more groups is better because Partnerships work they take time uh and
45:33
they need you know I'll borrow what jwi said they need big thinking and Big Ideas that go beyond you know the near-
45:40
term and S sort of to look for the long term Ray do you have anything to oh
45:46
sorry Julia go ahead please I was just thinking about like that you know that sort of the the middle little you know
45:52
like the fourplex so you know the I think the the automatic thinking is that
45:58
oh this is going to be you know people who have you know their land and they can put up like I have a a two-car
46:05
garage don't need it want to put something up there okay um but you know maybe you know I don't want to be a
46:11
landlord or you know like is there a way even for individuals to partner with
46:17
nonprofits like the scattered housing kind of approach you know so so we just haven't really kind of you know fleshed
46:25
out the full spectrum of you know the the models and um and then what that
46:32
provides you know a you could end up with like a whole bunch of inefficient fourplexes all across the city so if you
46:39
actually had a more of a a model or a partner who you know was even overseeing
46:45
or helping individuals do that then you would get you know a certain standard of
46:51
of Energy Efficiency you know we need electrification um so we shouldn't be building you know we shouldn't have new
46:57
gas connections you know like people aren't necessarily thinking of that like you need some overall sort of support
47:05
like professional support because you know the individual homeowner is not a developer um so I that that thinking
47:14
about the collaboration needs to go right from Little to Big you know all the way through
47:20
absolutely to the financing side too you know D like that's like that is in in a
47:26
little way building a laneway suite you are obtaining construction financing
47:31
which is you know like that is complicated you people AR gonna do it right like you know what they're gonna
47:37
need a helper they need yeah and to everything from how it's built and how to do yeah couldn't agree more to to
47:43
access that and then manage it on the long term you're absolutely right yeah it's uh it's great that you bring that
47:48
up Julia um yeah vcib is fortunate to work with a few groups involved in scattered housing and operating them as
47:54
nonprofit and so um I know Mitch and I were talking before this call about one
47:59
group uh that bcib um is proud to call a client and that's the Parkdale Neighborhood Land Trust and they
48:05
acquired a scattered portfolio of um something like 200 units from uh the Tron community housing scattered
48:11
portfolio when that went up for sale um a few years ago they partnered with uh
48:17
YWCA to make sure that they could be you know operated efficiently and effectively and that's speaking exactly
48:22
Julia to what you're saying of it's hard to have oneoff individual landlords but then tap into you know SSH funding um in
48:30
order to provide rent gear to income to these sort of tenants that are you know facing some real challenges in their
48:35
lives um you know vcib fortunately was able to come to the table with a pretty creative solution but we did have to
48:41
leverage um some cmhc co-investment fund money to um provide some uh renovation
48:49
financing and so this is touching on everything that you just mentioned Julie which is acquiring these assets putting
48:55
them in uh the right hands with an efficient operator um and then putting the money aside to Green these and
49:00
operate them um cleanly and as efficiently as possible in the long term um and it kind of dovetails into a
49:08
question that just popped up in the chat which is about what's the most common combination for layering grants programs
49:15
and financing to build mid or high-rise housing how can we advise clients the most effective multifaceted solution
49:22
that lenders are comfortable and familiar with um as the lender here maybe I'll start um there's not one
49:29
single answer um I think that uh one lever that is increasingly common and I
49:35
think lenders have an easier time getting their heads around um is the waiver or deferral of development
49:41
charges and being able to TW treat that as a form of equity in your development Prof fora so it's a huge one that um if
49:49
if not deferring but maybe getting those charges waved outright can make a big difference um the and the banks I think
49:55
at least vcib can um quite easily get their heads around that um after that it
50:01
gets a bit challenging and nuanced based on which grants and from which level of governments those are coming in and so
50:07
you know I mentioned private foundations granting capital for affordable housing a straightup grant which would then just
50:13
be used in the form of equity is the easiest for a lender to get uh their heads around it's also the hardest type
50:21
of funding to access um from there you have various you know cmhc um
50:28
contributions and maybe it's grants maybe it's forgivable debt um and those ones can get fairly unique in terms of
50:34
you know the construction lender likes to see uh development Pro fora and um the cash flow projections where you know
50:41
we might provide a land advance but the um our our bore was going to provide all of their cash equity and upfront now
50:47
cmhc oftentimes is has staged funding so it's something like once you're above
50:52
ground we'll Advance a certain amount once you have have you know enclosed and topped off your building will advance a
50:58
certain amount that provides challenges to lenders and so feedback that we've got historically is that sometimes um
51:04
that has been a challenge for lenders to um yeah underwrite and assess the risk effectively um but really what it comes
51:11
down to in my mind at least is that lender doing you know a full and proper
51:17
level of due diligence on what those grants and funding applications are um
51:22
if cmhc is committed um and you've got an exp experienced um owner operator or developer behind the project you can be
51:29
fairly certain that that money is coming in and uh to my mind it can be drisk quite easily with maybe a tweak to the
51:35
structure of the loan um or maybe just simply taking that afternoon to read
51:40
through 300 pages of funding agreements um Ray do you have anything to add to
51:46
that Eric I just have a question about like how do you and because you're an impact investor and you know this is of
51:52
more in our space but what do you think about like the majority of blenders how
51:57
do they take into consideration the operating costs of the building you know because I think design is important you
52:03
know you get you know like oh here's my performa but it's like your performer could be a lot
52:08
better um and it could be a lot more affordable for the ultimate owner for
52:14
the resident you know if it did XYZ and you know these are the kinds of things that we do when we get applications for
52:21
financing and we help people like so we we're more the concierge kind of um service on the
52:28
retrofit side where we even write the grant applications we'll write the applications to cmhc because we're the
52:35
experts on this and I think that's what lenders are not necessarily doing um you
52:40
know and and uh help to help the clients actually access all of that but also to
52:47
push back on them to say this could be a better project you know and I would feel more comfortable um you know
52:54
underwriting it if were like this because you know a it goes and like all the banks are sort of taking you know
53:00
saying Net Zero commitments and they want to have low carbon portfolios so they're going to have to have some
53:06
criteria about what they're going to finance as well um and I and I would say
53:11
at the front end helping their clients access all of those great um uh
53:16
resources and the third-party ones and I have another good example that I forgot to to mention as well like that can
53:23
really help reduce costs um because parking is expensive there's
53:28
lots of great ideas about how to how to reduce parking a
53:34
lot so a lot to consider there but uh yeah Julia I think um vcib takes a
53:40
similar approach likely to Taff in that um uh when we're looking at an efficient
53:46
building and what its operating costs are going to look like going forward we can um leverage our internal experience
53:52
we have a climate Finance team um which you know they were a separate entity
53:58
before that we Acquired and they do a lot of very cool work on retrofits but also um have access to a lot of um third
54:05
parties uh data on hand and also just connections that we can leverage and tap into um when needed um The Challenge I
54:12
think or a challenge um becomes you know working with cmhc and they have their benchmarks that you need to underwrite
54:18
too and sort of like raise Ottawa Hydro example which was you know we are
54:25
Engineers might say your hydro bill is going to be0 um but cmhc might say um
54:31
well we have a benchmark of $400 per unit and you have to underwrite with that even if you're expecting a z um
54:38
hydro bill um I my figures might not be right uh exactly there but I think the
54:44
theme of flexibility is is very key um Ray do you have anything to to add on
54:49
that well and and the more complicated that that Capital stack becomes if there's multiple lenders and multiple
54:54
fun it's great that we can stack those things together but the nonprofit sector is often reliant on multiple multiple
55:00
partners that way and they don't always line up right and I don't know if anyone else is a fan of old Hollywood musicals
55:06
but Jinder Rogers was was Fred a star's dance partner and someone once asked her you know how does she feel about dancing
55:12
with the great Fred stair says I do every single step he does except also backwards and wearing high heels and
55:18
sometimes that's the way we feel in the nonprofit sector I I can't say I uh truly
55:24
understand the reference they fully appreciate it there right but uh I I do think it's accurate I mean even we had a
55:30
recent I'm wearing heels now ER we we had a recent success and I think I saw somewhere in the chat here
55:37
um Mike from the auto Community Land Trust is on and um that was a recent win
55:42
for for vcib in terms of our impact mandate where it was the journey had been about a year and I know Ray you
55:48
were involved at one point um and it basically went from we're starting a land trust how do we do this to to all
55:55
right we've got some Financial backers from uh Community investors from Anonymous donors um how do we find the
56:02
financing to a a hypothetical building that we're going to acquire um and that Capital stack kept changing based on you
56:08
know changing commitments from foundations changing commitments from individuals changing interest rates changing Market rental rates um a lot of
56:14
moving pieces and um you know it was a nearly year-long Journey but um very
56:20
happy that the land trust in Ottawa was able to finally acquire their first building preserve I think was um about
56:26
six to eight units um that's preserved as affordable and perpetuity and it shows the amount of hard work and
56:31
dedication that needs to go into um something as deeply impactful as that um
56:36
hey Ray I was wondering um I I read that and I'm cooperatives are not my sort of
56:42
forte on but you know super keen on on seeing where that there was like a $1.5
56:49
billion new co-op housing development program housing and I haven't seen anything sort of emanate from that like
56:55
it was announced in the budget that would seem to be you know a really solid piece of the puzzle you know I mean
57:01
obviously that's for right across Canada um how is that playing out and you know
57:06
is there sort of layering into that that that could be you know amped up definitely and we're all just waiting
57:13
on the edges of our seats for the government to announce the release of that program um with that I think uh we
57:20
should be wary of everyone's time and schedules um so we should start to uh come to a close here um to me the
57:28
session's been very interesting to see the overlaps between um the nonprofit and the for for-profit sector but also
57:35
the um attention that should be paid to incorporating um Energy Efficiency and
57:42
climate friendly Solutions into our built World um and maybe it's something that we need to even double down on and
57:48
and think even bigger um before we log off maybe I'll just go one by one to our panelists um it's something that a
57:55
colleague of mine introduced after for some other team building sessions and that is um one word how are you feeling
58:00
after leaving this session I'll start with you MCH I was two I had two words I was
58:08
gonna say cautiously optimistic like it H Ray similar vein
58:15
encouraged Julia can I have three words let's do projects together oh that's
58:21
four hey I'm there but the one word to answer is yes yeah um yeah I'm definitely feeling very
58:29
energized myself and so um yeah with that I want to say thank you very much
58:35
uh Mitch of Hallmark Ray of the Canadian housing renewal Association and Julia of
58:40
ta and of course to Toronto region Board of Trade our hosts um please do feel free to reach out to myself and I'll
58:48
volunteer uh all my panelists as well as uh being absolutely um all right thank you very
58:54
much everyone and uh looking forward to continuing this conversation and this very meaningful work great thank you
59:00
thanks so much take care appreciate
59:06
it
Speakers
- Eric Visser, Director of Real Estate at Vancity Community Investment Bank
- Mitch Gillin, Vice President of Asset Management at Hullmark
- Ray Sullivan, Executive Director at Canadian Housing Renewal Association
- Julia Langer, Chief Executive Officer at The Atmospheric Fund
Workshop Agenda
- 10:00 AM - Virtual Check-in
- 10:05 AM - Workshop Programming
- 10:50 AM - Q&A
This workshop is free to attend!
Register for this complimentary workshop!
About our member:
As part of the Vancity Group, VCIB uses banking to drive lasting social and environmental change. VCIB is the only federally chartered bank in Canada that exclusively finances impact-driven organizations and projects that help communities become more affordable and sustainable.
VCIB believes financial institutions have a critical role to play in supporting the preservation and development of affordable housing in a way that is equitable and sustainable. VCIB finance co-operatives, affordable housing providers, land trusts, and other organizations that work to improve the affordability of our communities.