Make social housing without public funds

In Drummondville, one of the cities most affected by the housing crisis, 363 apartments are now in the hands of an NPO whose goal is to keep rents affordable, following a transaction of 42 .5 million made without government funding.

The non-profit organization SOLIDES concluded last Friday the purchase of 45 buildings, including 41 commercial premises and three buildings of student residences of the Cégep de Drummondville, which previously belonged to Boissonneault Groupe Immobilier.

“Our objective is to get buildings out of the private market, in order to be able to house tenants as well as possible for the best possible price,” explains the managing director of SOLIDES, François Giguère. “And it doesn’t cost the state a penny. »

Already owning 685 units in Greater Montreal before this acquisition, the organization has a practice of increasing its rents less quickly than private landlords, which means that its apartments remain affordable for tenants.

Tenants who already live in the buildings acquired in Drummondville will keep their homes. For future tenants, the selection will be made by favoring people with low incomes or with special needs, such as a disability, as well as women who are victims of violence.

In this town, 135 households were left homeless on 1^er July 2022.

Private partners

SOLIDES accomplishes its social mission without relying on government funds.

How ? For its purchase in Drumondville, SOLIDES obtained mortgage loans with good conditions granted by the Caisse d’économie solidaire de Desjardins (34.4 million), the Lucie and André Chagnon Foundation (6.4 million) and New Market Funds ( 4.1 million). The only participation of a government agency in this project is that of the Canada Mortgage and Housing Corporation (CMHC), which guarantees the loan contracted with the Caisse d’économie solidaire.

The loans also cover the property transfer tax, professional fees and work to be carried out on the buildings (approximately one million).

The buildings purchased are of different sizes, date from different eras, have dwellings of different sizes and different categories.

“All the partners saw the positive impact of the project for the tenants, particularly the families, because many of the units we bought are large apartments,” says François Giguère.

Mr. Giguère emphasizes that the former owner maintained his buildings well over the years, while maintaining the price of rents at correct levels, which made this housing stock a good purchase for SOLIDES. All the employees of Boissonneault Groupe Immobilier keep their jobs.

No government program

Why not request the government’s participation for this social housing project? “There is no government program for making acquisitions of this type, that is to say buying existing buildings to manage them and carry out normal maintenance. And in any case, the delivery of the programs is endless,” due to their complexity and the underfunding on the part of the government, answers François Giguère.

He adds, however, that initiatives like those of his organization do not mean that the government of François Legault should reduce its investments in social housing.

Making community and social housing without begging for help from the government, many NPOs and housing cooperatives dream of it. The Community Housing Transformation Center (CTLC) is working towards this objective with its Plancher project.

Many organizations would like to use the value of their buildings, as they reduce the amount of their mortgage, to obtain new loans allowing them to buy new affordable housing or build new ones.

A housing stock of 10 billion

However, those who have benefited from government programs to build their buildings, such as AccèsLogis or others, cannot use the equity generated on their properties as leverage for new purchases, since government rules do not allow it, explains the Director General of the CTLC, Stéphan Corriveau.

“As long as there’s money left on the mortgage, they’re not allowed to take out another loan,” he says. This removes room for maneuver from managers who would like to make better use of their assets. The situation borders on the absurd, when the needs are crying out in terms of housing. »

The Plancher project is trying to change these rules.

The housing stock held by housing cooperatives and NPOs in Quebec, which has 85,000 units, is worth $10 billion. It is 50% mortgaged. There are therefore 5 billion in assets that could be used to obtain new loans for renovations or purchases, explains Mr. Corriveau.

“Each organization could not do it individually, but by pooling our assets, it reduces the risk for lenders,” he adds.

CTCL representatives are scheduled to meet with the Minister of Housing, France-Élaine Duranceau, on March 23 to discuss ways to give cooperatives and NPOs access to equity in their buildings. “We are confident that we will be listened to,” concludes Stéphan Corriveau.