Province commits $10M in seed money for public-private affordable-housing trust fund

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This article was published 08/10/2024 (362 days ago), so information in it may no longer be current.

The Manitoba government is giving the business community $10 million to help address the province’s affordable housing crisis, but concerns are being raised about the NDP partnering with the for-profit sector.

“We are going to be unlocking the power of business to help us grapple with some of these challenges,” Premier Wab Kinew said at a news conference Tuesday morning.

The premier and Housing Minister Bernadette Smith announced the province is providing startup capital to the Business Council of Manitoba that’s aimed at getting more affordable housing units on the market.

The $10 million will launch the Collaborative Housing Alliance Real (CHAR for short) Estate Investment Trust to be established by the business council, chairman Mike Pyle said at the news conference, held at the Canadian Museum for Human Rights.

“Its mandate is to deliver transformative, scalable and sustainable, affordable and non-market housing in Manitoba,” said Pyle, the CEO of Exchange Income Corp.

“It will be structured and run as a real estate investment trust to partner in the ownership and operation of affordable housing driven by a socially responsible mandate. The CHAR structure allows everyone to leverage their strength. It will enable the public, private and community sectors to collaborate.”

He thanked the province for trusting the vision of the business community.

Trustees will be appointed by the council in collaboration with an advisory committee that includes government and the community, said Bram Strain, business council president and CEO.

The $10 million put up by the provincial government will attract other investors — from private individuals to corporations and foundations, he said.

Rather than seeking requests for proposals, CHAR will ask for expressions of interest, he said. That will allow community organizations to step forward with their projects instead of having to hire consultants.

“All that work will be done in house,” Strain said, adding CHAR will help them find the best “vessel” for their project.

Having different classes of investors expecting a reduced return or no return (the government) brings the “cost per door” down, he said.

“We’ll use social enterprise to help build and maintain those buildings,” he said.

The business council president expects the trust will grow quickly and create thousands of units over time.

That need is huge, the premier said.

“Any of us driving through downtown, living downtown, working downtown can see the human need is still so great,” Kinew said. “There’s so much more work to do. The way that we do difficult things here in Manitoba is by working on them together.”

Advocates for affordable housing welcome the effort but question the NDP’s partnership with the private sector.

“When in opposition, the NDP were highly critical of public-private partnerships, so it’s interesting to see that they are taking this approach,” said Kirsten Bernas, who chairs the Right to Housing Coalition.

“Surely, private investors will be expecting a return on investments. How much of the housing will be owned by non-market housing providers? Will any of it be owned by the private sector? How many of the new units will be below-market affordable housing and how is that defined?”

The Canada Mortgage and Housing Corp. defines affordable as a household spending less than 30 per cent of its income on rent.

“There are many ways to define “below-market affordable,” Bernas said. “Is it 30 per cent of household income? Or is it below 80 per cent of median market rent?”

She asked how long the units will have to rent at below-market affordable rates.

“If it’s anything like historical partnerships with the private sector, we might expect this partnership to generate some below-market affordable housing for a limited period of time, after which they would be able to rent units at market rates,” she said.

“More information would help determine whether this is the case in the current partnership.”

Christina Maes Nino, executive director of the Manitoba Non-Profit Housing Association, said the details need to be worked out.

“This would take on higher-risk projects, reduce the cost of financing and would provide some of that business expertise to the non-profit development side of things,” she said.

Non-profits have seen government support private-sector builders promising to provide affordable units in the past and some promises have been broken, Nino said.

Still, she is optimistic about “the enthusiasm and expertise of the business sector” in addressing homelessness, and “to do what they’re good at — to provide access to capital and provide support.”

The business council is getting involved because homelessness isn’t good for Manitoba, Pyle said.

“We believe firmly that there’s no getting ahead when anyone is left behind,” he said.

carol.sanders@freepress.mb.ca