The Budget proposes a number of affordable housing initiatives with a combined investment of $11.2 billion over an 11-year period as part of a new National Housing Strategy. The proposed investment represents a significant increase over Budget 2016’s commitment of $2.2 billion over a 2-year period. Significantly, the Budget proposes to create a new National Housing Fund (the “Fund”) to address critical housing issues and provide housing-related support for certain vulnerable citizens. The Fund will be capitalized with an investment of $5 billion over the next 11 years.
The vulnerable citizens specifically mentioned in the Budget include seniors, Indigenous Peoples, survivors fleeing situations of domestic violence, persons with disabilities, people dealing with mental health and addiction issues, and veterans.
The Budget identifies a number of priorities on which the Fund will focus. Specifically, the Fund will:
- encourage greater collaboration and investment in housing;
- expand direct lending for new rental housing supply and renewal;
- support for innovations in affordable housing;
- preserve the affordability of social housing; and
- support a strong and sustainable social housing sector.
The Fund will be administered through the Canada Mortgage and Housing Corporation (“CMHC”). Further details about the Fund will be announced later in 2017.
The Fund’s priority of encouraging greater collaboration in the housing sector specifically includes looking for opportunities to pool resources from many partners to fund projects, with a focus on large-scale community projects. Other priorities include the support of innovations designed to improve the quality of life for residents and new tools to assist social housing providers to transition to more efficient and financially sustainable operating models. As a result of these priorities, the creation of the Fund is exciting news for charities and non-profits. It is also stirring for social enterprises and investors that are exploring social finance and other impact models.
It should be noted that the Federal Government has indicated that, in addition to the funding of the new National Housing Strategy, it will initially preserve baseline funding obligations that arise from existing operating agreements that help subsidize affordable rental housing. However, since many of these agreements are expiring as CMHC mortgages wind-down, the Federal Government will be evaluating the use and renewal of these agreements over the next year.