Co-op housing in Canada is disappearing up its own association. After a kickstart by the Trudeau government in the 1970s and some scattered one-off entrepreneurial efforts in a few provinces over the years, it has been virtually a no-growth sector for almost a half century.
There are 250,000 members living in 2,200 housing co-ops in Canada with 90,000 units, many of them falling apart. Almost every co-op built before 1985 needs capital repairs to maintain it. “Many can’t wait for their present mortgages to expire,” according to the Co-operative Housing Federation of Canada (CHF).
How this came to pass is a sad story, and what the CHF is (and isn’t) doing about it today is raising some serious questions.
One of the principal current activities of the association is the Co-operative Housing Refinancing Partnership. The short of it is (the whole of it is on their website here) that most co-ops in Canada were set up about 35 years ago with government mortgages that are about to be paid off. As CHF says, many of these co-ops will want to refinance in order to renovate their aging properties. But lenders, who know that their whole history has been under government supervision and tutelage, are uncertain about what newly privatized co-ops will do with new money.
Enter CHF, which pledges that it will supervise borrowing co-ops to ensure they meet the conditions of a loan from a credit union. It might be called a moral guarantee. It certainly can’t hurt. For any co-op that scores less than AAA on the credit check it might make all the difference (only one of 12 in process has got through all hoops so far, with another three expected to close before year-end). And after a while, after a few CHF-secured loans have been made it could become the fast lane to the CU mortgage wicket. Needless to say, it’s a lane with a toll on it.
A few years on, when a number of these CHF-bolstered co-op mortgage loans have been successfully negotiated, will all lenders be asking co-ops, “Is CHF behind this?” and backing off if it’s not? That’s not the intention, but it may be inevitable. While CHF doesn’t offer security, it does offer comfort, and financial institutions have always preferred being comfortable.
In another arena a year ago, a senior CHF executive acknowledged that “the ability to form co-ops has atrophied over the years.” He was describing rationale for the Social Purpose Development Partnership that has since been announced in Vancouver, bringing together CHF-BC, a credit union (VanCity), a developer and the city to build separate but connected rent-to-income and co-op housing projects. The connection comes through an element of cross-subsidization, with co-op members subsidizing rent-to-income tenants. This is very close to a core principle of cooperation, to help others in the community. But unfortunately, as the CHF exec put it, “it means somewhat less member involvement.” CHF-BC is in the driver’s seat even before ignition. It will determine how much of co-op member fees goes to subsidization. It may not appear to be of much importance, but in fact it’s no little thing. It flies counter to the very first item in the “overarching agenda” for the cooperative decade now in progress, which is “to elevate participation within membership and governance to a new level.”
Finally, there is the Bridlewood story (told in this post). This co-op near Windsor was facing bankruptcy last year (2012) because members kept their unit fees much too low for much too long and then attempted to privatize their units at distress prices. CHF fought the rogues in court, won, and bought the place for a bargain $6 million. So CHF is now landlord of a 131 unit low-income housing development. Some tenants will be former co-op members, paying 50% more per month for their units than previously, but the Bridlewood Co-op per se has been dissolved. CHF absolutely did the right thing here. The alternative was to see the development taken out of the social housing sector altogether and exploited by commercial interests. But CHF itself has now removed these homes from the co-op sector, and has said nothing about how, or indeed whether, Bridlewood will be restored to co-op status.
All of this is incremental. It’s impossible to believe that there’s any ulterior motive involved or even conscious deliberation. But the tendency is clear. CHF isn’t just leading the sector. It’s taking over.
That strong and visionary leadership can work for the co-op housing sector has been clearly shown south of the border. Public-private partnerships in the U.S. have built an average of 10,000 co-op housing units each year for the past 25 years. If this were ten times the Canadian average it would be as expected. But it’s a hundred times more, or more than a hundred, because there is no such growth here. There are no PPPs for co-op housing in Canada.
It’s up to CHF now to show what it can do with the power it’s accumulating. So far, the association’s efforts have bent mostly to preserving what we’ve got. This is necessary for the sector’s survival, but it’s not sufficient for it to thrive. For that to happen, for co-ops to lead the market for affordable housing in Canada, CHF will have to lift its sights much higher.
Co-op Canada Accelerator
"Outsiders will not readily learn about a movement that does not broadly project into the public square what it is and why it is important." — Ian MacPherson
Co-op Canada Accelerator 
It is a shame the co-op movement seems to be in trouble. Affordable housing is needed more than ever. the UK is suffering a huge inbalance between incomes and the cost of housing, co-operative housing would be the way to go. Maybe there are lessons to be learnt for all.
In my view, the federal government of Canada is stepping away from investing in non-profit co-op housing because of its inherent problems that include poor or bad governance and management and fraud…very few of these type of co-ops have been built since 1995.
The federal government stepped away from all social housing development programs (not just co-op housing) in the mid ’90s. Public housing (PH) and Non for Profits (NFP) — the two other non co-op models of social housing — are no longer being developed either — as there are no longer any federal programs geared to that end. Where poor governance, management, and fraud are concerned, this has been a problem in some housing co-ops, yes. Does not the data show, however, that co-op projects, as a model, have faired better in this regards as compared to many PH and NFP projects? Does not the data show that the Co-op housing model provides, in many instances, the added benefits of empowerment, acquired life skills, and community building? Does not the data show that Co-op housing is generally cheaper to run than PH or NFPs — considering, for example, that member-tenants contribute to governance, management, and labor? But then, maybe your argument is against all social housing, whatever the model (PH, NFP, and Co-op). Which begs the question: what are the social and economic costs of homelessness or sub-decent housing, for example, to i) the health system?, ii) the police/justice/penal systems?, iii) the education system (learning difficulties traced back to the home environment), iv) the consumer market (lower skills leading to lower pay leading to lower purchasing power), etc.? Furthermore, what is the opportunity cost of lost human potential, as per lost contributions to the skilled labour force, for example? Is not decent housing a significant component of social mobility (added to personal safety, food security, health, and education)? Looking at the big picture, have not housing co-ops positively contributed to social peace (think of PH riots in some cities) and economic growth (think of what opportunities the multi-billion co-op real-estate assets provide for the construction/renovation, financial, and professional services industries)? In light of all of this, you may come to see the Thatcher/Reagan style federal withdrawal of social housing development — without ensuing fiscal downloads to the provinces — as somewhat short-sighted and small-minded, and not all that fiscally efficient either.
In order, if you please, Yes, Yes, Yes, No my argument is not against all (or any) social housing, Yes the social and economic costs of homelessness are enormous, Yes there are lost opportunity costs associated, Yes and Yes. I hope that touches all your very valid points. My overall conclusion is that co-op housing is the answer but co-op housing members have not proved themselves capable managers of the opportunity. Co-op housing got its major push forward in the Trudeau era. Since then the sector has been waiting for another government push, more intent on lobbying for subsidy than managing for growth. Certainly low cost housing should be a greater government priority. But we who have received benefits already from public support should be thinking of paying forward rather than crying poor. However, because of the way the sector is organized, I believe the prime responsibility to make this happen rests with apex organizations.
Is Quebec better than most in Canada? I seem to see more coops going up around Sherbrooke.
Quebec still has a government financed social housing development program called “AccèsLogis”. This program currently cranks out about 3000 social housing units per year, all sub-types included: ordinary households, low-income, special needs, elderly, domestic violence victims, etc. The recently elected provincial liberals may reconsider this program, however.
Quebec is usually in the vanguard of decent social programs, much to the chagrin of provinces to the right, economic not geographic. But here’s the fundamental problem in Canada. A lot of the important things are decided by the constitution, like education, defence, immigration, health, but not housing. Who’s ultimately responsible to see that Canadians enjoy a sufficient stock of housing (after the market, of course, mea culpa)? The feds? Provinces? Municipalities, which are creatures of provinces, unless they’re Toronto or Montreal or Vancouver, where they’re most of the province? Housing is one area where they’ve so divided responsibility that they’ve conquered the need to do what needs doing.
Yes, I agree that the apex organizations need to and have the responsibility to lead the discussion on new co-op housing development. This includes a discussion on equity co-ops. This will be a difficult but required discussion that CHF will have to have within its membership. I believe this discussion is overdo but hopefully we will have it over the next few years with the membership.
Yes, the US is developing more than 100 times the number we are but they are largely limited-equity and market co-ops. These are very different than the vast majority of non-profit continuing housing co-ops found here in Canada, which out of necessity has had to depend on government programs for their development. As these co-ops come out of their agreements many of us are excited to regain our full autonomy. The current “you hold the key” campaign is aimed at securing funding programs targeted to assist low income households; it is NOT to replace operating subsidies. We want to ensure our mixed-income communities and many of us with high levels of low-income members can not afford to cross-subsidize as we face the demand to finance major capital repairs for our aging buildings.
Without government programs we would not be anywhere near the size we are today. We have a base from which to grow. It is up to us not to squander the opportunity!
As I look at the inequities produced by our global economic, political and social structures, co-ops (including housing co-ops) are part of the solution. I discovered the co-op model over 30 years ago and I am sold! I have had the opportunity to visits all kinds of co-ops across Canada and around the world and they work. I too had the opportunity to attend the Summitt in Quebec City in 2012 and appreciate very much what the Desjardins movement is doing by creating another opportunity for discussions this year.
Co-ops are not perfect and yes our co-op housing model is evolving but it has done remarkably well. The way we have been structured has attempted and in many, many cases has been very successful in engaging the grassroots membership in a way that few co-operatives have been able to do. I agree that at the end of the day we must be well managed co-op enterprises; many of us are working at and exploring innovative ways to do this. Our continuing non-profit housing co-op movement is on the threshold of taking control of our destiny. As we do this I believe that new co-op housing development will be both a natural and a deliberate outcome.
I remain absolutely and totally committed to the co-op statement of identity and principles. They guide my work and thinking everyday.
I look forward to reading more of your blogs….. I had a quick look at your series on the North. Very interesting … I spent most of the 70’s in the North. Another of your blogs has added to my already lengthy summer reading list.
Thank you Tony for starting this blog! And thank you Louis for telling me about the blog! It is nice to have a chance to share thoughts and reflections on co-ops and co-op housing.
I agree with Barbara that a fair and informed discussion about equity co-ops is overdue within the CHF Canada membership. But then, these things come to fruition in their own time, I suppose. I must say, however, that I have seen this coming and have warned the Board at the beginning of my first mandate, one year ago. Not that I am especially endowed with the gift of foresight, or that I own some cristal ball or anything, its simply that Quebec is now coming out of that debate after two years of relative strife. The membership in Quebec passed a majority resolution mandating the Quebec apex organization (CQCH) to pursue research and development in innovative, non-government program housing co-op models, including equity co-ops. The issue popped up at the 2011 Orientation Meeting; this is when the Quebec Co-op Housing Mouvement broke out of its denial about the necessity to have this debate, just as the ROC Co-op Housing Mouvement arguably broke out of its own denial at the last CHF Canada AGM in Ottawa. Quebec held an issue specific debate during a 2012 Meeting. The issue was finally resolved, formally at least, with the Resolution passed at the CQCH 2013 AGM: the Quebec apex organisation will conduct R&D in new models of non-government housing co-ops, including equity co-ops; issue resolved. Of course, this position of CQCH is one of the three reasons that has lead to the Montreal Federation (FECHIMM, nearly half of Quebec co-ops) to disaffiliate, effective this coming October 2014 — the other two reasons being governance and representation. Growing pains, one may suggest. What I find fascinating, is that many of the exact same arguments voiced against R&D in non government program housing co-op models — including equity — that I heard during the protracted — though arguably necessary — debate in Quebec, I also heard on the floor of the CHF Canada 2014 AGM earlier this June. Dejà vu all over again. The arguments essentially pan out to three:
1. The apex organization barely has the ressources to meet the needs of the current model, i.e., the rental housing co-op base membership.
2. Going in the direction of, for example, equity housing co-ops will divert government funding away from households in dire need, instead funding projects for well off, even bourgeois, households.
3. Moving into the equity co-op market sends the wrong message to governments, comforting them in their obvious desire to disengage from their social housing responsibilities.
Of course, each of these concerns is deserving of a corresponding answer.
1. Bottom line: innovative co-op housing models mean new, largely independent growth for the co-op housing sector. And a couple of clichés: apex organizations can walk and chew gum at the same time; build it and they will come.
2. Governments already set aside funding for home ownership. Juste have a look at the CMHC web site. Home ownership is actually a CMHC priority. One objective with equity co-ops, for example, is to divert part of this public finding of home ownership within the private — e.g., condo — market towards funding home ownership within the co-operative market. Thus, the argument stands that, not only will public funds currently tagged for public housing not be diverted to private home ownership, but that public funds currently tagged for private home ownership will become “co-operativized”. The desired outcome, thus, is not stealing from the poor; the point is growing the co-op family.
3. The Co-op Housing Mouvement (CHM) and the Right to Housing Mouvement (RHM) are two traditional allies that, hand in hand, have pressured governments, won political battles, and secured funding to built up the current stock of housing co-ops in Canada. The RHM in Quebec (e.g., FRAPRU) don’t like the equity co-op model; it appears to go against their values and objectives. For many in the Quebec RHM, property is just plain evil.
The point not to be missed is, of course, that the CHM is not the RHM, and vice versa. These are two different sets of — often converging — interests with different aims, potentials, priorities and methods. The RHM will typically bring their concerns to the streets with signs and voice amplifiers. They demand that government be more involved in social housing, maintaining current stocks and subsidies, and developing new, better opportunities for the ill-housed. The CHM, on the other hand, has its own destiny, an entrepreneurial potential that goes beyond just meeting the needs of lower-income households; the CHM is required, if it is to be faithful to its very nature, to develop and support any group of households with a common housing need and the effective capacity to do business with their co-op. of whatever form and tenure.
To picture these issues:
A. Where social housing is concerned, the RHM is in the street protesting while the CHM is in the Minister’s office proposing the way to political safety and the means of achieving it: build and maintain subsided housing co-ops.
B. Where innovative co-op housing — including equity — is concerned, the CHM is the pregnant barefoot mother of four slaving in the kitchen while the RHM — in Quebec, at least — is the jealous husband that doesn’t want her to get out of the home and land a fulfilling job. You get my point: the CHM potential goes far beyond social housing, and — without forfeiting responsibility for its offspring, i.e, the current co-op social housing stocks — it is time the CHM get out in the world and make something more of herself. And hopefully, the marriage won’t reach the breaking point; but so be it if it does.
So, to wrap things up and where the government’s sense of responsibilities for social housing is concerned, the corresponding answer to the third concern comes down to this: the RHM has its own noble battles to wage, and all the best to them. The purpose of the CHM, however, is innovation: to develop and maintain more co-op housing in more places for more people of more socio-economic backgrounds in more forms. That is the co-operative entrepreneurial spirit distilled. It’s all about knowing exactly who we are as co-operators.
The situation in Quebec (CQCH versus FECHIMM) will follow its due course. It is not the first time in the history of the Co-op Mouvement that this type of conflict has occurred. Hopefully, the current loose-loose outcome will provide some opportunities for an overall win. As for CHF Canada, it is to be wished that the diligent setting up of a fair and informed debate within the membership will lead to a deliberate and fully assumed decision resolved with the best long term interests of the Co-op Housing Mouvement at heart.
Well said Louis. One wonders whether the national debate on equity co-ops would be much further along if the rest of the nation were more in tune with Quebec. Which raises again the current AGM of what I called, in replying to Barbara, “the recently renamed and reconstituted Co-operatives and Mutuals Canada.” It was reconstituted, as you know, in order to unite the French and English speaking co-op apex organizations. It is, of course, too trite to say “about time,” but there I said it. It is a matter of some interest that no similar coming together is happening, or as far as I know being discussed, for co-op housing apexes. CQCH in Quebec. CHFC for the rest of the country (as I write in some turmoil attempting to consolidate power by incorporating major provincial locals). Much is made of the way governments react to initiatives by the co-op sector. But at its most basic, governments and the public generally have to wonder about a movement that, in English, can’t agree on how to spell its name (with or without hyphen) and, in Canada, can’t or won’t get its English and French speaking members together.
Your enthusiasm does you much credit, Barbara. A groundswell of that kind of commitment would have a wonderfully energizing effect on apex organizations. You are most interested and involved in CHF. With its fight alongside other players to retain $500 million in low-income housing subsidies and its move to smooth the path to mortgage renewals for member co-ops, it’s showing real strength. But then it should. It runs with roughly three times the budget of the senior organization to which it belongs, the recently renamed and reconstituted Co-operatives and Mutuals Canada. Speaking of which, I was planning to be at the inaugural AGM of CMC in Moncton this coming week, but instead — you are kind enough to mention the series I’ve written about the North — I’ve been pre-empted to Yellowknife and a summer week in the territories. Fare well.
Tony ,
I envy your opportunity to be in Yellowknife for the summer solstice! I have fond memories of many a summer solstice party in “Old Town”.
I was on the board of CCA for the decade of the 90’s. The preliminary discussions to merge the two apex organizations were occurring then but unfortunately did not take at that time. I saw the merger as an important solidifying step for the Canadian co-operative movement and so I am very pleased to see it finally coming about.
I have not thought about a closer relationship between the Quebec co-op housing movement. Your comment has made me begin to reflect on why we don’t have a closer relationship. During the development days of the 80’s and early 90’s we were much closer and I remember chairing meetings of resource groups from all across Canada which afforded opportunities to share and learn from each other. I guess I have accepted the negotiated structure of our movement but maybe it’s time to rethink even this reality. Even without any major structural changes, we can facilitate a closer relationship which in turn could lead to structural changes. Something that Louis and I can work on. I will reflect on this when I go to camp this summer!
On the issue of a closer relationship between the Quebec (CQCH) and ROC (CHF Canada) apex organizations in the co-op housing sector.
As the CQCH delegate on the CHF Canada Board, I am very much “on” this issue. This is all very preliminary. I have no mandate from either apex organization. But since we’re just between us, I can whisper that such an idea is one thing I had in mind when I wrote: “[…] Hopefully, the current loose-loose outcome will provide some opportunities for an overall win.”
I’m glad I may find an ally in Barb to discuss this further in due time.
It was a great week in the north (I’ll be writing about it in The Citizen) and even greater to return to such forward-looking comments from you and Barb. Allons-y!
Tony, Glad you had a great trip north. Let me know when the article appears in The Citizen. I am in Ottawa and Toronto on CHF Canada business this week. Spent my summer solstice at a 25th co-op housing birthday party in North Bay. Great event!! Things should be quiet for most of the summer on the CHF front except for Dale Reagan’s retirement BBQ on July 17th on Ward Island. Dale will be missed! He has had such an enormous impact on our movement.