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About Co-operative Housing
Over the years, both the provincial and federal governments have created programs to support the development of non-profit housing co-operatives. Unfortunately, at the present time, there are no government programs to create new non-profit housing.
The following links provide a brief overview of the housing programs that contributed to the development of the existing non-profit housing co-ops.
Federal Programs
Section 61 Program (34.18)
The first non-profit and co-op housing program in Ontario began in 1974. The provincial government of the time had created the Ministry of Housing in 1973 in response to the failure of the public housing program and to the urgent need for affordable housing. This first program was funded by the federal government which invited provincial governments to offer rent geared to income subsidies. The Rent Supplement Program was known as the Community Sponsored Housing Program. Section 61 featured a fifty year mortgage at a fixed rate (8%) and a federal government loan, of which 10% was forgivable. The rent geared to income agreement with the provincial Ministry of Housing was to be re-negotiated after fifteen years. This program came to an end in 1978. Section 95 Program (56.1)
The federal government continued its commitment to non-profit and co-operative housing in 1979 with a new program known as the 56.1 program, now known as Section 95 (section numbers refer to the National Housing Act). The federal government offered 100% mortgage financing to allow projects to find a mortgage on the private market. Provincial governments had no part in the program, although Ontario offered a "piggy-back" program called the Ontario Co-operative Housing Assistance Program (OCHAP). This offered rent geared to income for residents if the co-op was unable to provide subsidies for 25% of its residents from its federal subsidy pool. The federal program was discontinued in 1984, and was replaced briefly by the Federal Co-operative Housing Program (Index-Linked Mortgage Program (ILM)).
Federal Co-operative Housing Announced in 1986, this program was a five year trial program. The federal government funded it. Rent supplement is cost shared with the province (Ontario Rent Supplement Program). Its best known feature was the index-linked mortgage. This meant that private lenders were invited to provide 100% of the cost of the mortgage with a floating rate of interest which gave a fixed rate of interest plus inflation. This feature had two effects:
Other features are: Under this program, 13,588 co-op units were allocated. Provincial Programs
Federal/Provincial Program (F/P)
The next program started in 1986, and is jointly funded by the federal and provincial
governments. The provincial Ministry of Municipal Affairs and Housing (MMAH)
administers it. The federal government put a dollar cap on its contribution in 1989.
About 115 co-ops were developed in Ontario under this program. There were no
more allocations after 1993.
This program introduced a key feature called "targeting". A significant part of housing is targeted to the neediest households, while there is also a range of
incomes. Each co-op has an Access Plan. Under its plan it must allocate a
minimum of 40% to 50% of its units to core-need households. (Canada Mortgage
and Housing Corporation (CMHC) establishes core need limits annually.) At least
25% of the total units must be in the category of "deep need". (The Ministry
establishes "deep need".) The rest of the units may be a mix of "shallow non-core"
and market households. The co-op must generally keep this mix throughout its life
as a co-op.
Definition 15 of the Operating Agreement defines the term "Core Need". It refers to the way the federal government measures need. It sets the federal portion of the
funding for the F/P program. Each year the Ministry sends a CNITs (Core Need
Income Thresholds) Newsletter to give co-ops the current CNITs levels and the
income cut-offs for deep need. Note that the F/P program is the only provincial
program which uses the term "household in core need".
The federal government pays 60% of the bridge and geared to income (GI) subsidies
on core units. The province pays 40% of the core need subsidies and 100% of any
non-core and market subsidies.
The initial targeting plan sets limits on the number of core units that are eligible for
federal funding. If the co-op goes over this number, the provincial government is responsible for the geared to income subsidy on the extra core units.
Some other key features of the F/P program:
Homes Now
Homes Now is the first program funded entirely by the Province of Ontario without
any federal funding. It began in 1988 as a five year program with a target of 30,000
units of non-profit housing. It produced slightly more than 30,000 units. Almost
9,000 were co-op units.
Some key features of the Homes Now program are:
P3000 The province introduced this program in 1987 as a special initiative to target the
neediest groups. These were:
The funding arrangement is similar to the Homes Now program.
Co-ops received very few allocations under this program.
P3600
The province introduced this program to develop non-profit housing in 1988/89. It
targeted single people with low incomes. Many projects were 100% GI units.
Financing arrangements were similar to P3000.
Ten co-ops were financed under this program.
P10,000
The province announced this program in its budget of 1991. It was to produce
10,000 units of non-profit housing. The Ministry's centralised financing arrangements assigned a mortgage lender.
Four thousand units were assigned to co-ops.
jobsOntario Homes (joHomes)
The 1992 provincial budget announced this
program aimed at producing 20,000 non profit units over three years. It
followed the Ministry's Framework Consultation process. In June of 1995
the new Conservative governmant cancelled 385 co-op and non-profit housing
developments that had been planned under this program.
About 5,000 units were allocated to co-ops, but fewer than 1,500 were committed before the end of the program.
Email: info@coophousing.com
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