In 2019, Fundamental Inc. submitted a proposal to the Canadian Mortgage and Housing Corporation’s (CMHC) Solutions Lab to develop a framework and financial model for holistic affordable housing that aligned with the goals of the National Housing Strategy, specifically:
1) supporting the community housing sector’s efforts to become more capable, viable, and innovative;
2) encouraging and supporting the social and economic inclusion of low-income households and more inclusive, vibrant and productive communities; and
3) achieving greater operational efficiencies and better responses to tenant needs, community needs, and capital needs.
$250,000 was awarded for this project, titled AffordableHousing+, and Fundamental Inc. led a team of local firms operating within the affordable housing sector in Newfoundland and Labrador to successfully deliver the project scope.
One of the business models from the AffordableHousing+ Solutions Lab that showed especial promise was adapting a traditional real estate investment trust (REIT) development approach to drive social and community benefit. In 2022, an additional $100,000 was awarded to Fundamental Inc. through the Solutions Lab program to further develop this model. This phase of the project was titled Social Purpose REIT. This scope included:
– Engagement with legal advisory services in the areas of private trusts, traditional REITs, securities law, real estate development law, and tax laws around charitable enterprises- Engagement with experts in social enterprise and innovative structures of social finance
– Engagement with organizations and individuals experienced in the affordable housing sectors in NL
– Engagement with two municipalities to discuss potential partnerships and establish the affordable housing needs within each respective community
– Further development of the ProForma from the AffordableHousing+ Solutions Lab to include multiple scenarios of location, housing format and development financing
The resulting Social Purpose REIT report includes a detailed account of the consultations, stakeholder and end user engagement, and prototyping and testing process undertaken to arrive at a viable solution, and an Implementation Plan for the Social Purpose REIT organizational structure.