Union Co-operative puts permanent housing affordability solutions in hands of community
First came the discussions and the planning, and now comes the action.
Union Sustainable Development Co-operative developed its unique model while participating in affordable housing roundtable discussions a few years ago with players from the private, public and philanthropic sectors.
It was determined that the Co-operative, which was formed in 2018, would leverage impact investments from community members and put the focus on permanent affordability using a democratic community ownership model.
Now that Union Co-operative officially has its collective foot in the door, that formula can be put into real-world practice with the end goal being permanent affordability.
Thanks to numerous community partnerships – led by Union Co-operative, including an impact investment from Waterloo Region Community Foundation (WRCF) in the form of a five-year loan, Union Co-operative recently acquired its first property – 475-477 Lancaster Street West in Kitchener – which includes two four-storey residential buildings with 58 two-bedroom units.
These apartments will continue to house residents at affordable rates.
“When vacancies come up, the goal is to work with local charities to find appropriate new tenants – refugee, women’s crisis… we’ll maintain a mix of incomes and individuals throughout the property.”
The purchase shines a light on a decisively new approach by Union Co-operative that sees the acquisition of an existing residential property – sometimes referred to as “naturally occurring affordable housing” -- as opposed to a new build.
“We’ll never be able to solely build our way out of this problem,” said Union Co-operative Executive Director Sean Campbell. “We need to use all the tools available, including securing existing properties that are already in our community, especially those that have these low rents and are homes for a lot of people.”
According to Rentals.ca, the average price of a vacant one-bedroom apartment in Kitchener is nearly $2,000. A two-bedroom goes for over $2,400. Factor in skyrocketing inflation rates and it’s easy to see why affordable housing solutions are more critical than ever before.
“We’re trying to be the middle point there – for folks who are making minimum wage to a living wage, who are working full-time, able to live independently, and still just can’t afford anywhere to live,” Campbell said.
While the private-investor sector at times has been accused of using unseemly tactics such as rent evictions followed by replacing tenants and then quickly increasing rent, the folks at 475-477 Lancaster – many of whom are long-term tenants paying an average of $1,300 per month thanks to existing, locked-in rent controls – stand to benefit from their new housing provider. Union Co-operative plans to offer tenants the opportunity to become tenant members of the co-operative, at no cost, giving them board representation alongside Union’s current 200-plus community members.
“It’s not just about affordability but also all these other things – trying to change it from being just a transactional relationship into one that’s really building community,” Campbell said. “This is their home. Nobody is being displaced.”
Union Co-operative is, in effect, deploying some of the same strategies used by the private sector – raising capital and buying buildings – to bring more properties out of the speculative real-estate market and into community ownership.
It’s an approach WRCF believes in.
“When an organization like Union Co-operative can purchase a property with the sole intention of keeping it affordable, that's important in this whole eco-system,” said John Bowden, WRCF’s Director, Financial Services. “At its core, we like what Union is trying to do.”
Impact investments are investments made into companies, organizations, and funds to generate social and/or environmental impact alongside a financial return. 10% of WRCF’s current investment portfolio is committed to impact investments.
“We couldn’t have done it without the support of foundations but particularly the leadership of Waterloo Region Community Foundation to coordinate all these different foundation lenders and make this project a success,” Campbell said. “It’s a great example of how they lead in our community.”
For more information on the Union Co-operative or becoming a Community Member, visit unionsd.coop. For more information on WRCF’s impact investing efforts, visit wrcf.ca/impact-investing.
If you would like to learn more about partnering with WRCF to make impact investments, including establishing your own Donor Advised Fund – Invested for Impact, contact Dan Robert at dan@wrcf.ca or 519-725-1806 x 205.