I M PA C T I N V E S T I N G A N D A F F O R D A B L E H O U S I - - PowerPoint PPT Presentation

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Sep 08, 2023 231 likes •456 views

I M PA C T I N V E S T I N G A N D A F F O R D A B L E H O U S I N G CHRA CONGRESS | 2019 our mission _ Non for profjt social enterprise created in 2012. We help low to moderate income households become homeowners without a down payment while

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CHRA CONGRESS | 2019

I M PA C T I N V E S T I N G A N D A F F O R D A B L E H O U S I N G

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ur mission

We are a community development tool. In cities, we ofger an ethical housing choice for the middle class in urban neighborhoods. In rural settings, we are an attraction tool to combat demographic decline. We help low to moderate income households become homeowners without a down payment while ensuring the perpetual afgordability of

ur homes.
ur main partners

Non for profjt social enterprise created in 2012.

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why we chose this model ? _

HOMELESS- NESS EMERGENCY SHELTER SUPPORTIVE HOUSING SOCIAL HOUSING AFFORDABLE RENTAL MARKET RENTAL MARKET HOMEOWN- ERSHIP AFFORDABLE HOMEOWNER- SHIP

1. Carve a more sustainable alternative to

homeownership in the housing continuum

2. Adress the unmet housing needs of an

increasingly large portion of middle class families and households .

Credits : CMHC

22 676 $ 31 942 $ 39 200 $ 81 000 $ 59 822 $ Household AMI Quebec AMI

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VIVACITÉ

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FOR HOMEOWNERS

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SHARED EQUITY : HOW IT WORKS _

Accessing homeownership

Property value : 200 000 $ Vivacité invests a 20% down payment : 40 000 $

Future owner pays a 1250$ transaction fee and takes out a mortgage representing 80% of the property value : 160 000$ Both parties sign a deed of covenant to ensure perpetual afgordability (equivalent of a ground lease). Vivacité holds a second mortgage. Monthly payments are 839 $/month (3,5% mortgage rate, including 40$/month membership fee)

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SHARED EQUITY : how it works _

Resale

Resale after 5 years, with a 2 % annual market appreciation Market appreciation : 20 000 $ New property value : 220 000 $ Vivacité fjnds new owners who meets meet the qualifjcation requirements.

Households around AMI
Owner-occupant
Property features

« Market appreciation : you didn’t build

that. »

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SHARED EQUITY : how it works _

Sharing the market appreciation

Amount disbursed for the initial purchase 25% of the market appreciation Added value linked to renovations 160 000 $ 5 000 $ 0 $ Total paid 165 000 $

Balance of the mortgage
137 711 $

Owner’s net gain at resale 27 532 $ Savings made on monthly payments

(5% down payment - CMHM prime)

8 378 $

Gains

35 667 $

When there is a resale, the household keeps... 25%

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SHARED EQUITY : how it works _

Sharing the market appreciation

Amount disbursed for the initial purchase

Depreciation

Added value linked to renovations 160 000 $

10 000 $

0 $ Total paid 150 000 $

Balance of the mortgage
137 711 $

Owner’s net gain at resale 12 289 $ Savings made on monthly payments

(5% down payment - CMHM prime)

8 378 $

Gains

20 667 $

When there is a resale, the household keeps... 25% 10 000$ DEPRECIATION (190 000$)

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SHARED EQUITY : how it works _

Perperual afgordability

With 75% of the market appreciation (15 000 $), Vivacité... Reinvests 4000 $ to maintain a 20% downpayment for the next owner. (44 000 $ for a 220 000 $ property)

+

Uses 11 000 $ to make new developments and remunerate its investors.

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VIVACITÉ

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for investors

Julien Durocher 8 years old

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getting started _

intital cycle of development : 240 units within five years 7 projects spread accross Quebec Need in investment : 5 M$

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rural markets

10 % 40 % 50 %

Rural areas
Low market values
Low median incomes
Suburban areas
Average market values
Median incomes close to

national average

Central neighborhoods
High market values
Incomes slightly above

national average.

MeTROPOLITAN markets

URBAN markets

portfolio approach _

Building territorial solidarity

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73,5% 2,5 % 24 %

wner’s transaction fee

PRIVATE investment vivacite’s developers’ margin

funding the down payment _

Social economy at work

« The difgerence between the project costs and the market value : you didn’t build that. »

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55 M$

84 M$

asset : 11 M$ asset : 17 M$

portfolio value _

240 initial units after 25 years

240 households 850 households

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INVESTMENT PARTNERSHIP _

EQUITY NEED

5 M 15 yrs

patient capital

6%+

RATE OF RETURN

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THE PROCESS

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lessons learned

Kent Monkman The Daddies

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LESSON #1 _

Money produces reality

“ Power produces; it produces reality; it produces domains of objects and rituals of truth. ”

Michel Foucault

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LESSON #2 _

Impact investing is not about innovation

“ And when we dream it, Let’s dream it, we’ll dream it for free, Free money, free money, free money. ”

Patti Smith

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LESSON #3 _

There are no rules

“ As long as the structure of the group is informal, the rules of how decisions are made are known only to a few and awareness of power is limited to those who know the rules. Those who do not know the rules and are not chosen for initiation must remain in confusion, or suffer from paranoid delusions that something is happening of which they are not quite aware. ”

Jo Freeman

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LESSON #4 _

Housing should not be about innovation

“ The idea of progress views time as constructive. Time is our ally. It makes things grow. Whereas the rhetoric of innovation views time as corruptive. It deteriorates things. Innovation presents itself as what needs to be done so that the world does not undo itself. It is an imperative to repair the corruptive passing of time. ”

Étienne Klein

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