Expiry of Operating Agreements - Are You RAdy?

May 11th, 2012

Expiry of Operating Agreements

Outline for the day

- Presentation on End of Expiry- Overview of Federal and Provincial Statistics- Demonstration of the new Assessment Tool - Group Table work

- Operating differences between the pre & post

- Discuss & determine steps to be taken & when

- Present their findings to the group

New Brunswick Non-Profit Housing Association Annual Conference

Phil Brown, President, Canadian Housing & Renewal Association (CHRA)

May 11, 2012Fredericton, New Brunswick

CHRA … since 1968, a voice for the full range ofaffordable housing and homelessness

issues and solutions in Canada

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CHRA’s Four Pillars:

1. Keeping homes affordable2. Ending homelessness3. Renewing our communities4. Supporting a sustainable housing

profession

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Our Characteristics:

1. Membership-based – 250 members and growing2. Diverse representation – Our members include

social housing providers, every provincial/territorial housing department, municipalities & many others, like NBNPHA; the tent is large!

3. National - We advocate to the federal government

Social Housing in Canada• From 1949-1993, the Government of Canada funded the

development of social housing, which was undertaken by provinces/territories, non-profits, and co-ops.

• Across Canada, 5% of households – or around 615,000 - live in social housing where rent is subsidized.

• Subsidies linked to mortgages flow to providers through CMHC, P/Ts or, in Ontario, municipalities

• Some agreements/subsidies have already expired, with significant declines beginning around 2015.

As cited by Steve Pomeroy, Is Emperor Nero Fiddling as Rome Burns? Assessing Risk when Federal Subsidies End (2011)

Social Housing: The Challenge

Once subsidies end, the challenge for social housing providers is whether they will have the capacity to continue to provide affordable housing to the same degree and to the same number of households.

This is because they may face cash-flow shortfalls and/or have capital repair/replacement liabilities

CHRA Research – Key FindingsWas Chicken Little Right? (2006), Courage Under Fire (2011), Is

Emperor Nero Fiddling as Rome Burns? (2011)• Identified financial viability and capital reserve replacement

after expiry as key issues• As much as 50% of total social housing stock is at-risk• Projects which have high RGI ratios or high capital liabilities

are more likely to have declines in affordability or be lost.• Size of provider matters when it comes to a group’s ability to

research and plan ahead. • Actions proposed for providers at-risk lead to diminished

affordability (i.e shallower rent subsidy)

CHRA Policy & Advocacy

• Task Group on Expiry of Operating Agreements• CHRA Advocacy Plan • Strategic Outreach to MPs and members 2012-13 • Highlighting EOA issue within ongoing advocacy

efforts

CHRA Technical Assistance• Simplified Assessment Tool (SAT) released at

CHRA Congress 2012. • Developed in partnership with NBNPHA, and 4

other provincial non-profit housing associations• The SAT is a user-friendly tool to help social

housing providers examine the likely impact of expiring subsidies.

• Accompanying guide provides background and details options providers can consider to ensure they can continue to provide housing after expiry.

Looking Forward• Understand the impact• Improve communication– On potential impact– On opportunities for a champion

• Define the ‘ask’ • Rally partners and allies

Thank You

www.chra-achru.ca

Operating Agreements

Before Expiry

- Rules of operations

- Subsidies

- Mortgage payments

After Expiry

- Some restrictions removed

- Subsidies end

- Mortgage payments end

Rules that continue to Apply

Non Profit Corporations:

- Letters Patent

- By-laws

- Policies & Procedures

Things to Consider

Continue to:

- Operate as a Non Profit – Provincial Property Tax Exemption

- Be Affordable - targeting low to moderate income clients

- Be Viable - ensuring sufficient revenues for maintenance & repairs(Replacement Reserve)

- Be Accountable – tenants, communities, lenders

How Many Units are Affected in NB?

•Over 5,300 social housing units managed by Non-profit and co-op housing providers

•Over 5,000 provincially owned & administered RNH & Public Housing units

When This Will Take Place?*

2000-2012 2013-2014 2015-2016 2017-2018 2019-2020 2021-2022 2023-2024 2025-2026 2027-2028 2029-2030

1914

3227

65

39

60

73

57

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Number of Expired Agreements

2000-2012 2013-2014 2015-2016 2017-2018 2019-2020 2021-2022 2023-2024 2025-2026 2027-2028 2029-2030

130 131

454

619

1017

766

628

1084

418

137

Number of units involved

* Includes Non-profits, Co-ops and Skigin-Elnoog Projects only

Evaluate your Project

How Do You Prepare?

Demonstration

- CHRA web-site www.chra-achru.ca,

Introduction to the New Evaluation Tool