Don’t Build It. Buy It.

Sometimes the cheapest #affordablehousing to build…is the housing that already exists. Last week #BCH launched the $1.5-billion Canada Rental Protection Fund, with the Canadian Housing Acquisition Fund selected to deploy the money to help community-housing providers acquire and renew existing rental properties. The target? Up to 7,000 at-risk rental homes in the first five years, that roughly includes $470 million in nonrepayable contributions and $1 billion in low-interest loans, with repaid capital recycled into future acquisitions.

In other words: Buy. Preserve. Renovate. Repeat.

And frankly, this is fantastic. Because imagine a landlord looking at their 20-unit rental building and thinking: “You know what? I dont really want to be a landlord anymore.” The traditional Canadian response has basically been: Congratulations! Heres your exit strategy: sell the building to someone who wants to redevelop it. Then 20 affordable rental homes become 20 construction-site signs, followed by 20 much-more-expensive rentals or worse…40 very small condos.

And heres where municipalities need to get much more creative. Create "Rental Protection Districts”. #Municipalities should identify these areas where preserving existing rental stock is a priority. Then give qualified non-profits a right of first refusal on those properties. If an owner wants out, the municipality and a qualified non-profit should have a defined window to put together an acquisition offer.

Because the alternative is letting the property go onto the open market and hoping that the buyer happens to be interested in preserving affordability. But watch out: #REITs are very interested in these buildings. Especially the boring ones. The modest apartment buildings. The older rental stock. The properties with rents below what the market could theoretically extract. These are precisely the buildings where there is an opportunity to increase rents, renovict, and eventually redevelop. So if we know these properties are strategically important to preserving affordability, municipalities shouldn't be standing on the sidelines watching them change hands. They should be helping their local community housing providers compete for them.

And heres the part I really want to see: LET THE NON-PROFITS RUN A SURPLUS.
Yes. I said it. A #nonprofit housing provider should be allowed to generate operating surpluses from these properties. Not distribute profits to the loan or reduce its length. Use the surplus to: maintain the building; build reserves; improve energy efficiency; renovate units; acquire another building; preserve another 20, 30 or 50 homes. Imagine a community-housing organization building an acquisition portfolio where every stabilised property helps finance the next acquisition. Thats how you turn a $1.5-billion federal investment into something much bigger than $1.5 billion.