Social finance tools that support affordable housing
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An overview of three case studies outlining social finance vehicles for the acquisition, construction, and retrofit of affordable housing in US and Canada. This presentation was prepared for the Ministry of Municipal Affairs and Housing (MMAH).
![PRESENTATION SUMMARY ,[object Object],[object Object],[object Object],Central Question: What are examples of social finance or impact investing tools that support the development, acquisition or construction of new affordable housing units?](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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Social finance tools that support affordable housing
- 1. SOCIAL FINANCE: AFFORDABLE HOUSING CASE STUDIES Ministry of Municipal Affairs & Housing (MAH) 777 Bay Street, Boardroom D January 19 th , 2011
- 6. Serviam Gardens: $3.6 million loan an 83-unit complex for low-income seniors in the Bronx.
- 11. Toronto Community Housing Corporation (TCHC) Bond: Regent Park Revitalization
Editor's Notes
- There were many reasons that TCHC moved forward in a non-traditional way with the issue of the public bond: Nature of Regent Park financing need made a traditional building-by-building (mortgage) financing approach problematic because of dynamic timetables and full scale demolotion/reconstruction needs. Large, unsecured financing provided ability to manage revitalization for maximum efficiency without having to worry about mortgage security issues: fewer transactions, no property registration required, and flexibility to adjust to development schedule.
- Canadian capital markets are supportive. There was strong interest and high level involvement in the deal from many major capital market players. Getting a high credit rating was critical as it allowed investors to move into an unfamiliar sector, simplified the marketing task, and created a great deal of demand. Canadian banks were very supportive with major financial institutions involved in the deal. Asset security not important, City of Toronto funding agreement eliminated perceived risks Process took time, money, and management attention. The deal took three years from start to finish, with a significant amount of energy becoming familiar with the intricacies of the process. Scale of the investment and story was extremely important. According to TCHC, it was much easier to borrow $250 million than $15 million, and these borrowing costs dropped to a level nearly the same as the City of Toronto. In addition, revitalization was seen as a major, simple story, attracting major players. Support of stakeholders was critical. Board of Directors kept informed at every step of the way; despite arm’s length relationship, City of Toronto ultimately had to sign off on the transaction