Loney to Create $100 Million
Community Housing Land Trust
New powerful tool to add upwards of 2,000 affordable, rent-geared-to-income, co-op and supportive housing units
Released Sept 6, 2022
WINNIPEG, Manitoba - Shaun Loney announced today that when elected Mayor, he will move quickly to work with a number of partners to set up the Community Housing Land Trust, adding a powerful tool to address the lack of affordable housing in Winnipeg.
“When it comes to affordable housing in Winnipeg, we need a game changer.” said Loney, explaining that land trusts are nonprofits that own land upon which nonprofits develop property.
The Land Trust will take property off the market in perpetuity, and then establish leases for use of the land to housing co-ops and nonprofits. The lease would require interest only payments and would not include repayment of the principal associated with the land portion. The City of Winnipeg can donate tax-forfeited properties and surplus properties to the Land Trust as well.
Loney explained that the capital will come from a combination of foundation investments, community bonds and creative partnerships with all three levels of government resulting in lowering and stabilizing housing costs for upwards of 2,000 families in Winnipeg.
“The effect is a housing provider doesn’t need to come up with the money to buy the land portion which makes their money go much further and keeps housing more affordable,” said Loney.
“Community land trusts are becoming more common as a response to the housing crisis,” said Loney, who has a Masters’ Degree in Economics. Loney explained that “One of the reasons housing costs continue to rise is that real estate has become very profitable for many private investors. This has led to the market being bid up to a point that puts housing out of reach for many.”
“When we drive by bus shelters with human beings living in them, as citizens, we know what we’re doing isn’t working. Winnipeggers will appreciate being able to shift some of our investments to be a part of the solution in a meaningful way.” said Dawn Rolke, a United Church minister who is looking to switch some of her personal savings into local, impactful investments.
The Community Housing Land Trust would be a charitable non-profit that enjoys a special relationship with the City. It would be led by a board with representation from community, tenants and other stakeholders.
The Neighbourhood Land Trust in Toronto purchased 84 properties and 205 units of affordable rental properties by leveraging a mixture of traditional funding, investments from eight foundations and credit union mortgages. Executive Director Joshua Brandt said, “With the support of the municipality and foundations as investors we have grown quickly. Foundations are clearly interested in getting social value out of their investments.”
Hugh Arklie, a retired chartered accountant with 30 years experience working in the Manitoba charitable foundation community said “Loney’s announcement is refreshing. Impact investors will love having an option to get social value right here at home.”
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BACKGROUNDER
The Community Housing Land Trust is a part of Shaun Loney’s overall housing strategy. This is in addition to many other opportunities that should be used such as grants from all three levels of government, fees on owners of vacant homes, requiring developers to include a percentage of affordable units in their construction projects, tax increment financing, donation of vacant land or tax-forfeited properties to nonprofits, making in-fill housing projects easier and encouraging granny suites and flex suites.
Loney said the Community Housing Land Trust would act in concert with his plan to address homelessness in Winnipeg. That homelessness plan gives nonprofits access to revenue streams that would pay for supports such as mental health and addictions treatment services by connecting nonprofits to emergency service providers.
Where does the capital come from?
Loney cited several sources of capital for the Community Housing Land Trust:
1. Foundation Investments
There are 10,000 foundations in Canada with over $90 billion in assets. By law, foundations are required to annually grant 3.5 percent of their holdings leaving 96.5 percent in investments that are largely unaligned with their missions and are sitting with large financial institutions.
The creation of the Community Housing Land Trust will offer foundations a new option as they explore ways to shift some of their investment portfolios that include real estate holdings into the Land Trust that adds a social rate of return in addition to their monetary return on their investment.
“Foundations are a natural fit to provide financing. We are seeing interest nationally. If given the opportunity, many foundations will choose investments that earn both a financial and a social rate of return”. Marc Soberano - Executive Director of Raising the Roof, a Toronto-based non-profit that is a leader in preventing homelessness.
2. Community Bonds
Loney said the Community Housing Land Trust can be set up to invite investments from Winnipeggers as well who want to align their own investments to make a difference in their own community. Community bonds give community members a new option to get involved by seeing their investments being put to good use locally.
3. Government Partnerships
Canada Mortgage and Housing Corporation recently invested in 16 Land Trusts across Canada but none of them were in Winnipeg. The City of Winnipeg can donate tax-forfeited properties and surplus properties to the Land Trust as well. In addition to contributing funding, the government of Manitoba can make the land trust attractive to impact investors by guaranteeing investments thereby removing risk for investors.
More about Community Land Trusts
Canadian Network of Community Land Trusts
CMHC invests in Community Land Trusts - 16 funded initiatives, none of which are in Winnipeg.
Broadview - Community land trusts could help provide affordable housing we so desperately need
BC Chamber of Commerce calls for a land trust
More about Community Bonds
Tapestry Capital is a Canadian social enterprise that has helped 59 nonprofit projects raise $80 million in investments using community bonds.