Five Key Focus Areas to Help Develop Your Affordable Housing Strategy Large Large

Five Key Focus Areas to Help Develop Your Affordable Housing Strategy

By Surya Pulickal and Jonathan Lampman

When it comes to Canada’s dynamic housing market, the search for accessible and affordable housing options is a critical problem in many communities. In the last three years we’ve seen mortgage rates go from lows that fueled a rise in house prices, to highs that have somewhat prevented prices from increasing even more. We’ve also seen high housing demand and supply constraints, which support the trend of available housing being sold far above market value. These trends have many Canadians wondering, “Will housing ever become more affordable?”

Developers typically drive Canada’s housing market. However, housing in Canada has evolved into a larger social and economic issue, actioning the Government of Canada (GoC) and Canada Mortgage and Housing Corporation (CMHC) to step in to help make the housing market more affordable and equitable. As interest rates stabilize and demand for housing picks up, federal and provincial entities are now taking actionable steps to address the lack of supply.

The government launched its Housing Accelerator Fund, a four-billion-dollar housing initiative designed to fast-track the creation of at least 100,000 new homes across Canada in March 2023. Additionally, in its 2023 Fall Economic Statement, the Government of Canada announced that it would be allocating an additional $1 billion over three years, starting in 2025-26, to the Affordable Housing Fund – a fund intended to support non-profit, co-op and public housing providers as they aim to increase housing supply by more than 7,000 units by 2028.

Urban centres across Canada have been taking advantage of these funds, with the City of London being the first municipality to receive a $74 million grant to help address its housing crisis. As more funds become available, municipalities across Canada will want to ensure they’re in a favourable position to apply for funding. One way to prepare is to develop a housing strategy that ensures your community’s housing needs are clearly understood so you can initiate the next project steps successfully.

  1. Developing Your Affordable Housing Strategy

    Affordable housing projects have several facets. From the usual technical and financial elements to securing land, having the right political support and policy frameworks to see your project through to fruition is critical.

    Modern housing development is a collaborative process that requires public and private sector entities to approach the initiative as a joint venture. CMHC offers municipalities a detailed four-part development checklist to help organizations tackle affordable housing in their communities.

    Building the right professional team is key to helping you achieve your housing goals. With so many facets and different areas of expertise, it’s important to establish a team that can contribute its unique skillsets to your affordable housing strategy and help you bring your plans to fruition. 

    To help simplify the process, we’ve drawn on our Infrastructure Advisory experience to highlight some areas where a project advisor (or project manager) can support the development of your affordable housing strategy:

     

  2. Public relations and policy

    Affordable housing can be a sensitive topic in some communities. It’s important to know how your strategic plans will impact the community. As project advisors, we often help clients weigh community reactions by engaging with them and building a matrix that outlines affected residents, organizations and other impacted parties and includes details on how the community would either benefit or be hindered by a proposed approach. By conducting market research and delivering a feasibility study, we can support municipal decision-making and help local leaders confidently tailor strategies to meet a community’s unique needs.

     

  3. Project funding

    Housing developments are resource intensive. It’s common to apply several funding streams, including loans and grant programs under the federal, provincial or municipal governments, as well as private sector grants simultaneously. An experienced project advisor can draw on their knowledge of various funding sources to support the development of your funding applications.

     

  4. Procurement

    Securing the financial resources and expertise required to successfully deliver a project depends on how the project’s procured. Project advisors can help you identify the right procurement method by conducting a procurement options analysis. Executing a market sounding can also help identify the interest and capacity of general contractors and developers in the market for your project. Using the information gathered, an advisor can guide you through the procurement process, which may include the development of Requests for Expression of Interests, Requests for Qualifications (RFQs) or Requests for Proposals (RFPs) to build your project team. Throughout the procurement process, an experienced advisor will make formal agreements with each selected proponent, enabling them to better collaborate, plan and deliver your project on time and on budget.

     

  5. Real Estate 

    Managing a municipal real estate portfolio can be challenging. Some municipalities may own large portions of underutilized, developable land or have residential properties nearing the end of their service life. Other municipalities may severely lack the land or basic infrastructure to support the development of necessary housing units. In either case, real estate management requires specialized expertise to plan, acquire, dispose of, (re)develop or revitalize assets – resources you may not have access to internally. 

    An advisor can support you by conducting a comprehensive asset portfolio analysis, providing you with the information you need to frame your project – including an assessment of which sites are best suited to address your housing needs and will remain financially viable in the long term. A large portion of your affordable housing strategy will tie into this real estate component. With the right location or convertible assets to meet your unique needs, you can begin building a strong strategy that will help you secure the funding and public support you need to be successful.

     

  6. Technical Expertise

    Every expert team engaged as part of a housing strategy brings a specialized skill set that they can leverage to enhance, support and ultimately help deliver your affordable housing strategy. Project advisors lend their technical expertise and knowledge of various markets, key entities and organizations – including various levels of government, facility operators, developers and more – to help you secure the team and funding you need to deliver your project successfully. Drawing on relationships with key entities and past project experiences enables advisors to identify potential risks and offer mitigation strategies or solutions to keep your project moving. Additionally, the politics surrounding housing strategies can add a lot of pressure to your endeavor. Project advisors offer an objective, independent opinion that can help you maintain focus and achieve your goals.

 

Collaborative Teamwork

As various housing initiatives ramp up and move forward, we encourage you to assess your housing team. Do you have the capacity to develop a comprehensive affordable housing strategy? Have you established a network that enables you to bring together experts in development, law, architecture, fundraising and other essential areas?

It’s critical to keep an open mind.  Even the most experienced teams need additional support at times. We know how critical Canada’s current housing issue is, and how important it is to have input from multiple entities, organizations, experts and regulatory authorities to navigate the market and find sustainable, community-based solutions. Each member of the project team has a specialized skillset that can provide value to the project, as long as they come together to serve the community in a collaborative way. Our Infrastructure Advisory and Project Management teams are well versed in collaborative approaches – from IPD and Lean to Progressive Design-Builds and more – we’re prepared to help champion your next housing project. 

Developing a comprehensive affordable housing strategy is about much more than finding a band-aid solution. It’s about ensuring that, regardless of age or income, residents can find a comfortable place to call home. 

Interested in learning more? Reach out to one of our housing experts.