FINANCING CANADA’S AFFORDABLE HOUSING NEEDS March, 2018

WHO IS HPC HOUSING INVESTMENT CORPORATION? New Canadian lender, dedicated to the affordable housing sector Three Founding Partners: BC Housing Manitoba Housing Housing Services Corporation (Ontario) Our DNA: Housing Partnership Canada Peer network of affordable housing CEOs More than 250K units across Canada 2

BUILDING AFFORDABLE HOUSING A Global Challenge 2025: 1.6 billion people → inadequate housing 400 million in developed countries $16 trillion → to close housing gap $2 trillion+ for Canada & U.S. 3

FIXING THE GLOBAL CHALLENGE McKinsey recommendations: Unlock government lands Reduce construction costs Increase operational efficiencies Create better financing solutions 4

CANADIAN REALITY Sector Challenges Highly diverse FEDERAL NATIONAL HOUSING STRATEGY $15.9B TOTAL NEED OVER 10 YEARS: ~$100B Sector Challenges Highly diverse Mostly community based organizations Financing is well outside of comfort zone 5

VISION FOR THE SECTOR Today’s Realities Our Vision Aging infrastructure End of design life Billions needed Uneven government funding Business self-sufficiency Leverage the assets Be entrepreneurial More affordable housing 6

RELATIONSHIPS ARE CHANGING Keep the Mission Change Relationships Government: oversight  partner Providers: administrators  housing leaders & builders 7

PAN-CANADIAN INITIATIVE Feasibility Study, Morrison Park Advisors Commissioned by Housing Partnership Canada: ADDITIONAL FUNDING PARTNERS: CMHC PROVINCE OF ONTARIO CITY OF TORONTO AND A NUMBER OF ONTARIO SERVICE MANAGERS 8

HOUSING SECTOR FINANCING OPTIONS Dedicated Housing Lender Ongoing funding stability Depends Possibly No Yes Can handle fragmented sector Somewhat Customized to social housing Leverages sector creditworthiness Low financing costs Government Debt Programs Ongoing funding stability Depends Possibly Can handle fragmented sector Somewhat Customized to social housing No Leverages sector creditworthiness Yes Low financing costs Direct to Capital Markets Ongoing funding stability Depends Possibly No Can handle fragmented sector Somewhat Customized to social housing Leverages sector creditworthiness Yes Low financing costs Ongoing funding stability Can handle fragmented sector Customized to social housing Leverages sector creditworthiness Low financing costs Banks Ongoing funding stability Depends Can handle fragmented sector Somewhat Customized to social housing No Leverages sector creditworthiness Possibly Low financing costs MPA slide 9

MARKET PRECEDENTS HOUSING FINANCE CORPORATION, UK Non-Profit Corporation Established in 1987 £5 billion loans Direct capital markets A+ credit rating Staff complement of 20 TORONTO COMMUNITY HOUSING CORPORATION $450M direct capital borrowings AA- credit rating Regeneration of Regent Park FIRST NATIONS FINANCE AUTHORITY, CAN $10M fed investment leveraged over $100M loans 60% annual operating grants A- credit rating “solid competitive position in a niche market” 10

THE MARKETS LIKE AFFORDABLE HOUSING Well-run operations Government-ish comfort Global sector Rating agency views 11

OUR SIMPLE BUSINESS MODEL ADD UP THE FINANCING NEEDS OF THE SECTOR BORROW FROM THE CAPITAL MARKETS RE-LOAN TO THE SECTOR MPA Slide 12

DEMAND FOR LOANS Our first round call for projects: 20 providers $1B financing need 8,000 new/regenerated units Estimated Pool of 3,000+ Canadian borrowers 13

WHY HPC HOUSING INVESTMENT? Housing Finance for Housing People, By Housing People Dedicated lender to affordable housing Fixed rate 30+ year loans Housing knowledge Finance expertise Lean, low-cost administration 14

Drive sector self-sufficiency Tackle declining funding commitments Manitoba Challenges Repair aging stock Drive sector self-sufficiency Tackle declining funding commitments Demographics Aging seniors Indigenous New immigrants Mental health needs Accessible

Manitoba Opportunities with HI-C Mixed use and multi-residential units Mayfair River Better serve low income households Westminister Housing Society More seniors housing

INITIAL FUNDING $20 Million from federal Innovation Fund* Loan loss protection Leverages into $200M first tranche lending capacity $2.5 Million from the 3 founding partners Start up operations $200 M loans → 2,000 new affordable homes 17

2018 TIMELINE $20M Fed Investment and $2.5M Start-Up Commitments Focus on Take Out Financing for Tranche #1 Meet Tranche #1 Borrowing Candidates Bond Holder & Credit Rating Agencies Prep Bond and Loan Documents Build Pipeline for Tranche #2 and beyond Fall 2018: Close $200M Tranche #1 projects 18

Q&A QUESTIONS & ANSWERS

CONTACTS Shayne Ramsay, CEO, BC Housing Steven Spry, CEO, Manitoba Housing Howie Wong, CEO, Housing Services Corp sramsay@bchousing.org steven.spry@gov.mb.ca hwong@hscorp.ca Joshua Broadhead, Senior Project Officer, BC Housing Sandra Hodzic, Social Innovation Lead, Manitoba Housing jbroadhead@bchousing.org Sandra.Hodzic@gov.mb.ca