Toronto Star Op Ed: Residents help fight housing crisis
This article first appeared in the Toronto Star on August 24, 2024.
The crisis in sustainable, affordable housing isn’t just a problem in big cities – it’s having a huge impact in rural areas, too. As homelessness is recognized as a social as well as a financial challenge, communities are motivated to put their money to work to find a solution. Community bonds were created for just this purpose. They are an instrument that can be used anywhere citizens want to play an active role in making their community be more like they want it to be.
Here’s how it worked in Haliburton County, a beautiful but impoverished community two hours north of Toronto – cottage country – that has a severe shortage of affordable rental housing.
Covid knocked Haliburton’s real estate world sideways as people fled expensive cities to get on the property ladder more cheaply. Local residents couldn’t compete with big-city purchase offers, rental properties were sucked into the market, properties bought on spec returned to the market as Airbnb’s or at city or recreational rates. Local citizens who thought they had security found themselves unhoused.
The community, including seasonal residents, began to understand that the people they depended on for the necessities and niceties of life couldn’t afford to live here anymore. Dining out, repairing the dock, pumping the septic, getting a haircut or a massage were no longer readily available. The housing problem became personal.
Places for People, a volunteer-run non-profit corporation that has been in the affordable rental housing business since 2007, moved into high gear. Methodically over the years, it used social capital to leverage $1.5M to buy five properties, using exclusively local resources – individual mortgage holders, promissory notes, donations, fund-raising.
In the summer of 2023, Places for People sold $850,000 of community bonds in a mere 9 weeks to consolidate its debt on two properties, leaving three unencumbered and available for leverage for further acquisitions.
Community bonds are like any other bond – you invest your money with a particular corporation at a specified rate for a specified time – except that the corporation is a non-profit, perhaps local, that exists to serve a social purpose.
You buy their bond because you support their purpose. In addition to getting a decent return on your investment, you also get the incredible satisfaction of knowing that your money is making your world be a little bit closer to what you want it to be.
Six months after the bond raise, Places for People used one of the debt-free properties as collateral to purchase a lakeside 8-plex in one of the villages, complete with resident tenants. During Covid, they’d purchased a reasonably-priced 5-plex, also with tenants in place.
Sustaining these occupied buildings addresses housing need perhaps more effectively, certainly more quickly and affordably, than building new. For every new unit built in Canada, it is reported that 11 affordable units are lost through demolition or gentrification. Maybe the number is higher: we don’t keep good stats.
One of the reasons the response to the community bond offer was so enthusiastic is that people embraced the opportunity to flex their financial muscles in a personal way to make their world a better place. Places for People designed the bond offer to have something for everyone – Baby Bonds: $1000 3-year bonds at 3% that two or three people could buy together (or well-heeled grandparents could give as gifts to every grandchild), Mama Bonds ($5000, 5 years, 4%), and Papa Bonds ($10,000, 7 years, 5%). They sold equally which is evidence that inclusivity was achieved; the bifurcated economic reality was accommodated.
Places for People now owns and operates 20 rental units in six properties, all but three below market rent. A drop in the bucket compared to need, a life-saver from the tenants’ perspective.
It takes collective and sustained action to make big change, but change always starts small. Consider Margaret Mead’s wisdom: ‘Never doubt that a small group of thoughtful committed citizens can change the world. Indeed, it is the only thing that ever has.’
Community bonds are one lovely, satisfying way to do just that. They are an instrument that can be used anywhere citizens want to play an active role in making their community be more like they want it to be.
