© The Wellesley Institute Michael Shapcott, Director, Affordable Housing and Social Innovation, The Wellesley Institute Social Economy Series University of Toronto March 23, 2011

© The Wellesley Institute Housing finance 101: Three bags of money required for housing Development/ acquisition $$$s Development/ Operating $$$s Reserve $$$s

© The Wellesley Institute Ownership housing innovation – 1940s Long-term mortgage and mortgage financing assistance Ownership housing innovation – 1940s Long-term mortgage and mortgage financing assistance “Job for life, mortgage for life” “Job for life, mortgage for life”

© The Wellesley Institute Long-term mortgages Owner obtains loan, various gov’t subsidies and incentives Operating $$$s Reserve $$$s Development/ acquisition $$$s Development/ Owner pays, various gov’t subsidies

© The Wellesley Institute Ownership housing innovation – mid-2000s Sub-prime mortgages; complex derivatives Ownership housing innovation – mid-2000s Sub-prime mortgages; complex derivatives “NINJA financing: no income, no asset” “NINJA financing: no income, no asset”

© The Wellesley Institute Sub-prime mortgages Owner gets financing, risk bundled into MBSs, etc. Operating $$$s Reserve $$$s Development/ acquisition $$$s Development/ ????????? ???????????

© The Wellesley Institute Social housing innovation – late 1940s Government- developed, government- owned, government- managed Social housing innovation – late 1940s Government- developed, government- owned, government- managed “The garden city”

© The Wellesley Institute Public housing financing Government finances Operating $$$s Reserve $$$s Development/ acquisition $$$s Development/ Tenant rents and government subsidies Capital reserves (??)

© The Wellesley Institute Social housing innovation – 1973 Funding for community-based non-profit, co-op and municipal housing Social housing innovation – 1973 Funding for community-based non-profit, co-op and municipal housing “Affordable housing is a social right of all Canadians”

© The Wellesley Institute Social housing financing - then Various capital subsidy mechanisms, gov’t backstops mortgage Operating $$$s Reserve $$$s Development/ acquisition $$$s Development/ Tenant rents, RGI subsidies Capital reserves

© The Wellesley Institute Erosion of government investment in social housing over two decades Erosion of government investment in social housing over two decades Federal housing investments as percentage of GDP

© The Wellesley Institute As government housing investments erode, homelessness, precarious housing grows As government housing investments erode, homelessness, precarious housing grows Precarious Housing 2010

© The Wellesley Institute Construction budget – 50-unit seniors housing in Kitchener 2007 Project cost:$6,100,000 Federal / provincial$2,100,000 Municipal$ 194,750 Total government$2,294,750 Government share 38% Donations (land, cash)$1,195,000 Mortgage financing$2,610,250 Total sponsor$3,805,250 Sponsor share 62%

© The Wellesley Institute Federal budget 2009

© The Wellesley Institute Government of Canada says housing investments are great for economy

© The Wellesley Institute Federal housing agency projects growing net income… …as major cuts set for housing investments CMHC net income: Up 11.5% Overall housing spending: Cut 23.5% Assisted households: Cut 10.4% CMHC net income: Up 11.5% Overall housing spending: Cut 23.5% Assisted households: Cut 10.4%

© The Wellesley Institute Innovative options required Development/ acquisition $$$s Development/ Infrastructure Ontario affordable housing loan fund Community housing loan funds Housing bonds Housing trust funds Social impact bonds Social venture exchange Social finance

© The Wellesley Institute Innovative options required Operating $$$s Universal housing benefit Social impact bonds Impact investing - SROI

© The Wellesley Institute Thank you!