Community REIT: Hubs to Homes.
New financing methods to provide & maintain more social purpose real-estate.
First convening: January 29 2025 10:00am to 12:00pm. See link to register below.
In Canada, we are facing a multitude of crises including homelessness, alarming decrease of nature and biodiversity, and disappearance of affordable housing everywhere. Non-profits, charities and community organizations (together “the organizations”) are well positioned to address these emergencies due to their close collaboration with those directly affected by the problems. However, these organizations are experiencing a crisis of their own.
Many of them own assets that have historically been a source of equity, and enabled strategic investment of funds towards solutions that produce positive societal and climate outcomes. Over time these real assets depreciated and required significant upkeep capital. This, in turn, depleted the organizations’ annual operating cash flow, leaving them often no choice but to put the assets up for sale.
Another challenge is that many asset-rich organizations tend to be non-profits that are subject to the same demographic forces that are triggering the silver tsunami in the business sector. Their demographic base is declining and they are lacking the capacity to regenerate or identify innovative solutions in an increasingly complex world.
As a result, organizations that own real assets often reach a point where they run out of financial liquidity and human capacity. The sum of maintenance and repair for the asset as it ages, and the ongoing orchestration costs become higher than the organization’s annual revenue. Recapitalizing these assets are difficult when done on a property-by-property basis.
More often than not, the consequence of such a situation is that an organization decides to sell its community asset(s). This has a detrimental domino effect since most affordable housing, permanent office spaces for charities, services for the homeless – disappear once they are put on the market for sale. They are acquired by traditional for profit developers, which carry different objectives than the community organizations. In addition, organizations give up the only source of future equity that they had access to. As such, addressing this reality requires systemic solutions that preserve existing community assets, increases collective financial resilience and strengthens non-profit actors.
It is with these systemic issues in mind that we are researching the development of a Community Real Estate Investment Trust (“REIT”) to mobilize collective community action. Once operational, these solutions will increase pathways towards future capital investments into affordable housing, community spaces and permanent housing for the homeless.
We are seeking to engage non-profits and charities in Guelph and Wellington County, and on Vancouver Island. If you are interested in this research, please connect through the short online form below or email julia@10carden.ca.