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

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

3. © The Wellesley Institute www.wellesleyinstitute.com 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”

4. © The Wellesley Institute www.wellesleyinstitute.com 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

5. © The Wellesley Institute www.wellesleyinstitute.com 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”

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

7. © The Wellesley Institute www.wellesleyinstitute.com 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”

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

9. © The Wellesley Institute www.wellesleyinstitute.com 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”

10. © The Wellesley Institute www.wellesleyinstitute.com 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

11. © The Wellesley Institute www.wellesleyinstitute.com 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

12. © The Wellesley Institute www.wellesleyinstitute.com As government housing investments erode, homelessness, precarious housing grows As government housing investments erode, homelessness, precarious housing grows Precarious Housing 2010

13. © The Wellesley Institute www.wellesleyinstitute.com 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. © The Wellesley Institute www.wellesleyinstitute.com Federal budget 2009

15. © The Wellesley Institute www.wellesleyinstitute.com Government of Canada says housing investments are great for economy

16. © The Wellesley Institute www.wellesleyinstitute.com 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%

17. © The Wellesley Institute www.wellesleyinstitute.com 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

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

19. © The Wellesley Institute www.wellesleyinstitute.com Thank you! www.wellesleyinstitute.com