The Chantier de l’économie sociale Trust and its partners, the Fonds immobilier de solidarité FTQ, SSQ Financial Group and the J.W. McConnell Family Foundation announced they are creating a $32.5-million patient capital investment fund called the Fonds d’aide à la rénovation de l’habitation communautaire (FondsARHC) to help support community housing renovations.
In Québec, 32,000 dwellings managed by housing coops and non profits were built in the 1980s through a program that provided mortgages guaranteed by the Canadian Mortgage and Housing Corporation (CMHC). The goal of this program was to provide low- and modest-income households and special needs clienteles with safe, quality housing.
Thirty years later, most of these dwellings are in need of major repairs or updates: roofs, windows, building envelopes, kitchens and bathrooms. As well, some systems, like heating, have reached the end of their useful lives and must be replaced.
“Given that a second mortgage would likely result in a sharp hike in rent that many tenants would be unable to afford, we had to find another way,” said Jacques Charest, general manager of the Chantier de l’économie sociale Trust. “We therefore approached the Fonds immobilier, SSQ Financial Group and the McConnell Foundation, which together created this $32.5-million investment fund. Our plan is to renovate 1,500 units over the next three years, at a cost of $20,000 to $25,000 each.”
“We invest in real estate all across Québec and in all sectors, including social, community and affordable housing,” added Normand Bélanger, president and CEO of the Fonds immobilier de solidarité FTQ. ” Building affordable rental housing fuels job creation and generates a reasonable return for shareholders of the Fonds de solidarité FTQ, but most importantly, it is a tangible way to make a difference in the lives of vulnerable people and families. Our decision to invest $21 million in this new fund is perfectly in line with our mission. Also, by systematizing the work and the way the renovations are carried out, we are helping revitalize properties as well as prevent black market work.”
Instead of dipping into their reserves, which are often insufficient to cover the cost of the work, collective housing owners will now be able to turn to FondsARHC for a loan. The interest rates will be competitive and the terms and conditions will be favourable to co-ops in that they will be able to make payments annually based on their capacity and in that the amounts will not represent more than 75 per cent of their generated surplus.
CMHC will be responsible for signing off on the work so that the necessary permits can be obtained. Housing coops and non profits will be able to count on the expertise of the Groupes de ressources techniques (GRT) for the management of the renovation projects.