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Financing housing alternatives

Financing housing alternatives. Michael Shapcott , Director, Affordable Housing and Social Innovation, The Wellesley Institute Social Economy Series University of Toronto March 23, 2011. Housing finance 101: Three bags of money required for housing. Operating $$$s. Reserve $$$s.

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Financing housing alternatives

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  1. Financing housing alternatives Michael Shapcott, Director, Affordable Housing and Social Innovation, The Wellesley Institute Social Economy Series University of Toronto March 23, 2011

  2. Housing finance 101: Three bags of money required for housing Operating $$$s Reserve $$$s Development/ acquisition $$$s

  3. Ownership housing innovation – 1940s Long-term mortgage and mortgage financing assistance “Job for life, mortgage for life”

  4. Long-term mortgages Development/ acquisition $$$s Reserve $$$s Operating $$$s Owner pays, various gov’t subsidies Owner obtains loan, various gov’t subsidies and incentives Owner pays, various gov’t subsidies

  5. Ownership housing innovation – mid-2000s Sub-prime mortgages; complex derivatives “NINJA financing: no income, no asset”

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

  7. Social housing innovation – late 1940s Government-developed, government-owned, government-managed “The garden city”

  8. Public housing financing Development/ acquisition $$$s Reserve $$$s Operating $$$s Capital reserves (??) Government finances Tenant rentsand government subsidies

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

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

  11. Erosion of government investment in social housing over two decadesFederal housing investments as percentage of GDP

  12. As government housing investments erode, homelessness, precarious housing growsPrecarious Housing 2010

  13. 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%

  14. Federal budget 2009

  15. Government of Canada says housing investments are great for economy

  16. 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%

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

  18. Innovative options required Universal housing benefit Operating $$$s Social impact bonds Impact investing - SROI

  19. Thank you! www.wellesleyinstitute.com

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