24-2753_Co-Operative Housing Development Program Info Session_en.mp4

00:00:03

[Marina Sloutsky speaks.]

[Visual: Slide titled “Co-operative Housing Development Program (CHDP): General Information Session.” On the right, the photo of an older lady and various other persons in the background performing an exterior cleanup. The National Housing Strategy, Government of Canada and Canada Mortgage and Housing Corporation logos appear in the lower part of the slide.]

[00:00:03] This national program. There's also tons of folks working hard behind the scenes today to bring you the information that you need, answer your questions, and make sure that things run smoothly.

[00:00:17] So big thank you to all of my colleagues as well.

00:00:30

[Visual: Slide change. The large text “Here we gather” appears in a yellow frame, overlaid on a black-and-white line background representing a topographic map.]

[0:00:30] Apologies, there we are. I would like to start off by letting you know that I am speaking to you today from the unceded indigenous lands of Tiohtià:ke, otherwise known as the Island of Montréal.

[00:00:44] Here the Kanien'kéha Nation is recognized as the custodians of these lands and these waters. And starting this way today, I really want to anchor our conversation in our collective responsibility to be informed of the past and ongoing consequences of colonialism. To learn about the history of these lands and to honour, protect and sustain these lands as well. And I really hope that this is our guiding light throughout our discussion today.

00:01:14

[Visual: Slide change. The title is “Session Objective,” followed by a short description.]

[00:01:15] As we begin, our objective is really straightforward. We really hope that when we're done with the session that you will know the key elements of the Co-operative Housing Development Program, or the CHDP

00:01:30

[Visual: Slide change. The title is “Co-Design.” On the right, a large photo of two people engaged in a brainstorming session. The logos of the Co-operative Housing Federation of Canada, the Government of Canada and Canada Mortgage and Housing Corporation appear on the left.]

[00:01:30] As announced by the Minister of Housing, Infrastructure and Communities, this new program was co-designed with the Co-operative Housing Federation of Canada, or CHF, and the co-operative housing sector, with the intent to strengthen the long-term sustainability of co-ops and grow the overall capacity of the sector as well.

00:01:50

[Visual: Slide change. The title is “Agenda.” Seven agenda items are listed on the right.]

[00:01:52] Today we have a bunch of things to get through, a number of topics, so we're going to do an overview of the program. We're going to talk about eligibility, application requirements, assessment and prioritization. We'll talk about the funding structure as well, what resources are available to you. Today's presentation should be somewhere around 30 to 40 minutes. That will leave us lots of time for Q&A. Feel free to send in your questions during the presentation.

00:02:28

[Visual: Slide change. The title is “What is the Cooperative Housing Development Program?” An explanation is provided in two sentences.]

[00:02:29] So let's jump right in. What is the Co-operative Housing Development Program? It's a new program that provides support for the creation of new affordable rental co-operative housing units across the country. This program was really developed to foster inclusive and strong communities that are focused on meeting the needs of today, but also anticipating the need for tomorrow.  

[00:02:52] When we say the needs for tomorrow, we mean that the co-op units created under the CHDP will be available for a minimum of 20 years at a lower rental rate compared to newly constructed, purpose-built rental units.

00:03:07

[Visual: Slide change. The title is “Funding.” On the right, a large photo of a co-operative housing project under construction, seen from afar.]

[00:03:07] To do this, the program has $1.5 billion in funding available in the form of both forgivable and low-interest, repayable loans and is similar in structure to other CMHC programs.

[00:03:22] This 1.5 billion in funding will be available through a call-out, application-based process. Funding will be committed over four years starting in 2024 through to 2028.

00:03:38

[Visual: Slide change. The title is “Program Objectives.” Three objectives are described, illustrated by pictograms.]

[00:03:39] As I mentioned, there was a significant amount of consultation with the sector on this program through a collaborative development process.

[00:03:48] Throughout that process, we identified some capacity issues which have hindered the sector's capacity for growth. As such, the program objectives that you see on your screen were developed in response to those highlighted items that were identified during the consultation.

[00:04:05] The program is designed to increase the co-op housing supply by creating a portfolio of thousands of more sustainable, affordable, accessible and energy-efficient co-operative housing units. We're also looking to support larger scale projects compared to those in the past.

[00:04:23] This will help create more sustainable projects in the long term. And unlike other co-operative models that folks might be familiar with, these projects are really designed to be unsubsidized. The objective is also to strengthen the sector's expertise and capacity on co-op housing, thus ensuring the sustainability of the sector in the long run.

00:04:48

[Visual: Slide change. The title is “Application Intake.” On the right, a large photo of an administrative employee at work on her portable computer.]

[00:04:52] The first application intake window opens in the summer of 2024. So, we are looking at a target window of July 15th to September 15th.

[00:05:03] Keeping those dates in mind, if clients are approved, they should receive a conditional approval of funding for the project within 30 days after the close of the intake window. So conditional approvals for the first intake period will be determined by October.

00:05:21

[Visual: Slide change. The title is “Eligibility.” On the left, an exterior photo of a co-operative housing project, including paved walkways and a variety of trees and shrubs.]

[00:05:23] Now that we've done a bit of an overview, let's dive into the program details a little further. We're going to go ahead and start with eligibility.

00:05:30

[Visual: Slide change. The title is “Who is eligible?” Four types of eligible applicants are identified, illustrated by pictograms.]

[00:05:30] The CHDP program is geared to the following eligible applicants. Non-profit housing co-operatives, either stand-alone co-operatives or those in partnerships with other non-profits.

[00:05:41] This includes student housing co-operatives as well as seniors’ housing co-operatives. Indigenous housing co-operatives are also eligible, as well as Indigenous (First Nations, Métis and Inuit) governments and organizations, tribal councils and Indigenous housing providers both on- and off- Nation. Community land trusts are also eligible for the program.

[00:06:06] The caveat here is that all applicants, except for land trusts and Indigenous governments and organizations, must be established co-operatives when they submit their application. It's also important to note that homeownership co-ops or equity co-ops are not eligible for funding given that they require an investment which, along with any profit earned, is returned to co-op investors. So those two types of co-op models are not eligible for this program.

00:06:40

[Visual: Slide change. The title is “Project Types.” On the left, two conditions for eligibility are described. On the right, four project types are listed, illustrated by pictograms.]

[00:06:42] There are also several project types that are eligible under the CHDP. This includes new construction projects, turnkey projects, densification, and conversion of non-residential buildings to residential.

[00:06:55] However, as I said on the previous slide, they must all be non-profit rental co-operative housing and create net new units.

00:07:04

[Visual: Slide change. The title, on the left, is “Mandatory Minimum Eligibility Requirements.” On the right, four eligibility requirements are listed.]

[00:07:05] Now we're going to go ahead and go over the mandatory minimum eligibility requirements. To be eligible for this program, funding applicants have to meet the following requirements for project size, affordability, energy efficiency and accessibility.

[00:07:21] We're going to unpack a bit what each of those means.

00:07:23

[Visual: Slide change. The title on the left remains “Mandatory Minimum Eligibility Requirements.” On the right, a chart titled “Project Size” appears, outlining three possible project sizes.]

[00:07:25] At the beginning, we talked a bit about how one of the objectives of the program was to really promote long-term sustainability.

[00:07:32] Related to this, the program, by design, has larger project minimums than you would typically find with our other NHS programs. Larger co-op sizes will ultimately strengthen the co-ops being built. In addition to this, viability is strengthened without the need for long-term subsidies. So that's why you're seeing the difference in the project size eligibility requirement. We'll start with larger urban centres.

[00:07:57] Those are defined as our census metropolitan areas or CMAs, where you see populations of at least 100,000 or more, of which at least 50,000 live in the core. Here you'll see a 75-unit minimum for a new project. For small to medium urban centres, namely, CAs or census agglomerations, which are defined as having populations of 10,000 to 99,999.

[00:08:25] Here we see a minimum 30-unit project size. And then in rural, remote northern and Indigenous areas or projects, we see our regular threshold of five units.

00:08:44

[Visual: Slide change. The title on the left remains “Mandatory Minimum Eligibility Requirements.” On the right, the title “Affordability” is followed by the description of a related requirement, as well as a screen capture of the Housing Market Information Portal website.]

[00:08:45] In terms of affordability, proponents have to commit for a minimum of 20 years to keep the rent or the housing charges for 100% of the units at or below 110% of the median market rent of post-2000 builds in the area. Now, this data can be obtained from the most recent CMHC Rental Market Survey for the zone in which your property is located. You can access that data from across the country using our Housing Market Information Portal. So, just one more time.  

[00:09:17] Proponents have to commit for a minimum of 20 years to keep the housing charges for 100% of the units at or below 110% of the median market rent of post-2000 builds in the area.

00:09:36

[Visual: Slide change. The title on the left remains “Mandatory Minimum Eligibility Requirements.” On the right, the title “Energy Efficiency” is followed by the description of two related requirements.]

[00:09:36] For energy efficiency, the requirement here is that each building must achieve step two of the 2020 National Energy Code for buildings, or step three of the 2020 National Building Code.

00:09:53

[Visual: Slide change. The title on the left remains “Mandatory Minimum Eligibility Requirements.” On the right, the title “Accessibility” is followed by the description of two related requirements.]

[00:09:53] Regarding accessibility, this is very much in line with our other programs. Proponents have two options available to them to meet the accessibility requirements. Option A is that a minimum of 20% of all the units within the project meet or exceed accessibility standards, with access to the project and its common areas being barrier-free. In Option B,

[00:10:12] the whole project is built through universal design including all the common areas and the units as well.

00:10:23

[Visual: Slide change. The title is “Prioritization and Assessment.” On the left, an exterior photo of a co-operative housing project, including grassy areas, picnic tables and a children’s playground.]

[00:10:26] Now we’ll review program prioritization and assessment.

00:10:30

[Visual: Slide change. The title is “Prioritization and Scoring.” Four criteria are identified, accompanied by pictograms and the scores allotted to each category.]

[00:10:31] The program applications will be scored and prioritized over nine key criteria areas. You're going to notice a number of points highlighted in yellow on the slides, which indicate the total points available for each category.

[00:10:44] Like most programs, proponents can achieve up to that total amount. Let's review these now in terms of financial viability. Projects requiring less forgivable loans in proportion to cost to make their projects financially viable will receive higher points. In terms of scale, the program, as I said, requires that projects have a minimum number of units. Projects meeting or exceeding these minimum project sizes will receive higher points. Shovel-readiness projects that demonstrate readiness to initiate construction will receive higher points.

[00:11:25] In terms of project costs, projects which are much more cost efficient on a per unit basis will also be given more points.

00:11:35

[Visual: Slide change. The text “A total of 100 pts” appears in a frame, overlapping a second slide titled “Prioritization and Scoring.”]

[Note: The second “Prioritization and Scoring” slide, without the overlapping frame, was skipped and could not be observed in full for description.]

[00:11:36] The prioritization and scoring have also taken into account considerations required to meet unique conditions and different needs of communities across the country. So, we really wanted to address recurring pain points from past programs.

[00:11:51] We've normalized the scoring by providing opportunities to receive additional points to offset points potentially lost in areas which have had disadvantaged groups in the past.

[00:12:03] You'll notice this under the targeted units and project location categories. For targeted units projects that commit to housing women and their children, and Indigenous groups and projects that dedicate units to meeting the needs of other National Housing Strategy priority populations, will receive additional points for each category. Also, for project location, projects located in rural, remote, northern and Indigenous communities will also receive additional points.

[00:12:34] Energy efficiency projects that exceed minimum requirements will receive higher points, and similarly for affordability, projects that commit to a deeper level of affordability beyond minimum requirements will receive higher points. These are the main aspects of prioritization and scoring. For a total of 100 points.

00:13:00

[Visual: Slide change. The title is “Reserve Requirements.” On the right, a large photo of a construction worker laying down a gutter on the edge of a roof.]

[00:13:02] We wanted to flag another important piece for you, which is the reserve fund. Typically, a reserve fund is set aside to cover future maintenance, repairs, and any unexpected expenses related to the upkeep of the property. So, the fund sort of serves as a bit of a financial cushion for the co-operative.

[00:13:22] The objective is to ensure that the co-operatives have the necessary resources to address any unforeseen issues without relying solely on loans. This program, the CHDP, has a mandatory requirement that the replacement reserve must represent 4% of the effective gross income and will be kept by each housing operator under the terms of its operating agreement with CMHC.

[00:13:49] And that reserve can be used to replace or repair capital items down the road to really sustain the economic life of the property and ensure the sustainability of the sector as well.

00:14:04

[Visual: Slide change. The title is “Funding.” On the left, a photo of a co-operative housing project in a rural area, located near a waterfront.]

[00:14:05] Let's now go ahead and discuss what funding is available for the program.

00:14:11

[Visual: Slide change. The title is “Available Funding and Terms.” Two types of funding are identified and illustrated by pictograms.]

[00:14:11] The funding structure is going to include a mix of repayable and forgivable loans used jointly with each other. This will comprise up to one third of the total funding in the form of a forgivable loan.

[00:14:25] The total loan, being the forgivable and the repayable loans together, can cover up to 100% of the eligible loan costs. Here are some forgivable loan details. The forgivable loan is going to be the amount needed to make sure that the project is viable, while meeting the affordability requirement. That means that the forgivable loan will be capped at one third of the amount, or the amount needed to achieve 110% of median market rent, whichever is lower. Repayable loan generally, but not in all cases, comprise around two thirds of the total loan.

[00:15:08] These loans can be amortized for up to 50 years, and the loan amount and the amortization period can vary from the forgivable portion, so the makeup of all the loans won't be necessarily uniform. Those are the approximate amounts.

00:15:25

[Visual: Slide change. The title is “Eligible Costs.” Two categories of costs are identified and illustrated by pictograms.]

[00:15:25] For eligible costs, we're going to use the same standard that we use in our other programs. Eligible expenses have to be directly related to the construction of the project for soft costs.

[00:15:35] This can be anything from architectural drawings, engineering fees, legal fees, pre- or post-construction expenses, permits, etc. As for hard costs, those brick-and-mortar costs, anything associated with the physical construction of the space, the structure of the site, the landscape, labour, and materials can be included in the hard costs.

00:16:02

[Visual: Slide change. The title is “Application Requirements.” On the right, a screen capture of the login page for the Canada Mortgage and Housing Corporation client portal.]

[00:16:04] Like our other housing programs and funding opportunities, applicants have to complete their application on the CMHC client portal.

[00:16:13] They will also need to refer to the required documentation checklist, which is a PDF you can find on our website. It outlines the minimum documentation required at each stage of the process to move the application forward. You'll also be required to complete and submit your CHDP Project Assessment Workbook. You must provide all the information on the project, such as your application requirements, rent roll, project budget, etc. We'll also be looking for you to submit an integrity declaration and an energy efficiency attestation.

[00:16:56] If you're thinking of applying to the program, we really recommend you look closely at our website. And if you're interested in applying, talk with your CMHC Housing Solutions specialist. They will be able to answer questions and provide more in-depth application support.

00:17:12

[Visual: Slide change. The title is “Required Documentation.” On the right, a three-column chart outlining a variety of documents pertaining to “Proponent Details,” “Project Details” and “Project Financials.” On the left, a photo of a man delivering documents at a service counter.]

[00:17:14] As mentioned earlier, proponents have to submit a variety of required documentation along with their application on the portal.

[00:17:22] You may recognize some of these documents, as they are standard for other programs. The only new item is the one highlighted in yellow, which is the CHDP Viability Assessment Workbook. It's an additional source of information that has to be completed, and, again, can be found on the website under the pre-application resources section.

00:17:48

[Visual: Slide change. The title is “Resources.” On the left, a photo of a previously seen co-operative housing project, including paved walkways and a variety of trees and shrubs.]

[00:17:50] We are nearing the end of the presentation.

[00:17:53] We've gone through the major parts of the application, or the program, I should say, and the eligibility requirements.

00:18:00

[Visual: Slide change. The title is “CDHP Summary.” Four items summarizing the presentation appear on the right, illustrated by pictograms.]

[00:18:02] Just to summarize what we've shared today, there's $1.5 billion in forgivable and repayable loans that are available to support the development of co-operatives that are affordable, sustainable, energy-efficient and equitable across the country.

[00:18:19] The first application window will be open from July 15th to September 15th on CMHC’s client portal. As part of the application, proponents have to submit a variety of documents, including our viability calculator. And finally, we really recommend you visit our website to get the most up-to-date information, find all of those resources that we talked about, and see all the documents that will help you along. The link is at the bottom of the slide.