Vancity Affordable Housing Project
Impact Investment: Developing the Future.
Part of the Victoria Foundation’s $10 million Impact Investing portfolio is allocated to Vancity to support its Affordable Housing Accelerator Fund: work it’s doing to improve access to affordable housing and social-purpose real estate projects throughout B.C. Vancity plays an important role in the development of affordable housing solutions by offering more than just lending: it provides learning resources and tools, professional advice, and, where possible, much-needed capital to groups trying to develop affordable rental and owned housing throughout the province.
The Vancity Affordable Housing Accelerator Fund’s goal is to enhance housing security and increase the availability of adequate, affordable and climate-ready housing. The fund provides nimble, flexible, and low-cost financing to the community housing sector for affordable housing development projects.
Vancity’s investment in affordable housing focuses on three main areas:
- Project support – Developing tools and resources to enable mutual learning and collaboration on high-impact real estate projects
- Sector development – Raising awareness for and building partnerships to address key issues, opportunities, and challenges within the real estate sector
- Policy development – Creating an environment to embrace real estate development via government and sector partners
Closing the capital gap
For many land-rich, cash-poor institutions, obtaining funds to begin an affordable housing project can be the first serious hurdle. Substantial costs go into the initial stages of development, and much of this is before they can access any lending. “Affordable housing projects generally have five or six phases of development,” explained Irene Gannitsos, senior manager of Strategic Initiatives and Investment at the Vancity Community Foundation. “The first few phases are around feasibility and business planning. In these phases, the projects are often considered fairly risky, so it can be challenging to find lenders. Some organizations will use grants to fund the planning and conceptual design work and to develop a solid project and business plan.
“After that, they start incurring significant costs, such as permits, concepts, designs and blueprints, and oftentimes rezoning. These hard costs can quickly add up to hundreds of thousands of dollars. Since these groups are usually non-profit or not-for-profit, with limited access to capital, they may not be able to go to B.C. Housing or CMHC, and they aren’t ready to get funding through a traditional financial institution. The impact investments program helps these organizations get through the initial phases, so they can move forward and unlock the bigger financing for construction and mortgage financing down the road. That’s how we accelerate the pace at which affordable housing projects can be built.”
“This is a very localized fund investing in affordable housing projects across Greater Vancouver and Vancouver Island.” — Irene Gannitsos, Vancity Community Foundation
The phases of support from Vancity:
- Vision – Grant funds to address the project needs as they relate to the partnering member’s mission
- Feasibility – Grant funds to support developmental concepts and feasibility assessments
- Business Plan – Grant funds in a cost-sharing model to inform a comprehensive business plan for the project
- Pre-development – Pre-construction loans repaid through construction financing
- Construction – Specialized not-for-profit lending expertise and commercial real estate financing with variable-rate mortgages
- Occupancy – Take-out financing with variable-rate or commercial mortgages, with a range of terms and amortization timelines
How is it helping?
The Affordable Housing Accelerator Fund is frequently used to develop projects for families with a household income between $30,000 and $80,000: people who are sometimes called the “missing middle” — the professionals, teachers, nurses, and service workers who bring value to our communities in many ways every day. The challenges of high rent and high housing prices aren’t exclusive to renters and first-time buyers: these rapidly inflating costs mean more of the household income is going toward keeping a roof overhead instead of into other necessities, like maintaining a healthy lifestyle with appropriate diet and exercise, saving for education, or retirement needs. Affordable housing isn’t about giving a handout; it’s a vital part of creating a healthy — sustainable — community. A community without this missing middle of essential consumers will surely implode.
Investing in community
One of the projects in Victoria that was made possible through the Victoria Foundation’s investment with Vancity is the Mount Douglas Senior Housing Society in Saanich. The two buildings, Mount Douglas Court and Mount Douglas Manor, sit on property donated by the Anglican Church Women of Canada over 40 years ago and now provide 84 affordable rental homes for low-income seniors. The project, made possible through a pre-development loan, was completed in 2019 and won the Victoria Real Estate Board’s Award of Excellence for affordable housing design. The initial residents of the new building at the Manor were invited to choose from 36 studio apartments, 48 one-bedroom units, and a pair of fully wheelchair-accessible units. The newly renovated Court residence provides 72 bright and spacious studios and eight one-bedroom units.
Learn more about the housing fund projects available through the Victoria Foundation.