Catalyst Community Developments Society
With a rental housing market as challenging as Metro Vancouver’s, it pays to get creative with non-profit housing.
In 2007, Richmond’s Affordable Housing Strategy made it a requirement that any new development plan had to make 5% of the total residential floor area into below market rental housing. In 2017, the City raised the quota to 10%, presenting a challenge to developers who are not typically in the business of running rental housing projects. For example, Intracorp, a North American property developer that began in Vancouver, BC, was creating 31 affordable rental homes in its Rivermark Place development in Richmond beside the Olympic Oval and was seeking a solution for owning and operating the units.
“They got in touch with us and said, ‘Would you be interested in purchasing these homes and owning and operating them over the long term?'”
Robert Brown, former President of Catalyst Community Developments Society, adding that he believes Richmond’s policy is “very effective at delivering affordable housing.”
A not-for-profit developer, Catalyst helps non-profit organizations and churches unlock the value of their real estate assets to build community spaces and affordable housing, which in turn can provide ongoing revenue for the organizations. Catalyst also partners with non-profit landowners, bringing development expertise and capital for construction, and often manages and maintains the properties when they’re finished. Catalyst has built and planned over 950 affordable rental homes and 78,000 sq. ft. of community non-profit and commercial spaces. When all the homes are complete, Catalyst estimates they will provide residents with approximately $10 million worth of savings on rent each year.
“What we are really trying to do here is create a better community. What do you need in that community to make it better for the people that live in it? One of the things is housing that’s affordable for the income that you earn. Catalyst always tries to keep that front and centre in what we do.”
Robert Brown
Intracorp made an offer: Catalyst could buy the affordable homes with a deposit of just under $800,000, a lower price that reflects what the homes will rent at below market rates.
Catalyst needed to buy time. Coming up with that amount of funding on short notice would be a challenge for any non-profit. With the offer on the table, Catalyst reached out to Vancity Community Foundation and Vancity Credit Union, who have worked closely with Catalyst since its inception by providing funding and financing from the Credit Union and the Vancity Affordable Community Housing Program for many of its projects. Here’s where things got creative. The Foundation approved an impact investment, in the form of a letter of credit, so Catalyst could purchase the homes, guaranteeing that Vancity would cover the deposit if Catalyst didn’t close on the purchase. Intracorp accepted the letter, which meant both the Foundation and Catalyst kickstarted an affordable housing solution, without putting any money down.
Buying units from another developer was a first for Catalyst. Now they had ample time to raise the $800,000 for the deposit and secure financing for the rest of the purchase price before the deal closed and the project opened in March 2020. In addition to the letter of credit, the Vancity Affordable Community Housing Program was also able to provide an acquisition loan to help complete the purchase.
This is one scenario where everyone wins. Intracorp fulfilled its commitment as a developer to Richmond’s Affordable Housing Strategy. Catalyst wins because it found another innovative strategy to expand its portfolio of affordable housing without having to build the housing, and Vancity wins, because it moved the meter on affordable housing. However, the biggest winners are the families and individuals in Richmond in the low to moderate income bracket earning approximately $49,000 to $73,000 annually. They have the opportunity to live in a beautiful new development and enjoy a vibrant new community that is close to the Sky Train, near the Fraser River, with access to a shared roof top garden – all at a price they can afford with rents between $1,250 and $1,850.