Thanks to the innovation and research team at Canada Mortgage and Housing Corporation, affordable housing developers have a new tool available for financing their projects, and investors have a new way to find new investment opportunities.
Capital Connect is an online networking platform exclusively for investors and housing developers, and its user experience will be familiar to anyone who has used LinkedIn. Users create a profile with details about their company, and then developers can also create projects or portfolios that need financing.
Designed to be a tool with a low barrier to entry and no cost, this is the only platform of its kind exclusively for affordable housing financing. Projects and portfolios listed on the site must have at least a portion of homes below median market rent.
Jessica Beketa, Senior Specialist in Innovation and Research at CMHC, said the goal is to bolster investment in affordable housing beyond the typical suspects.
"We understand that affordable housing projects, in part, are dependent on public and government financing of different kinds but ... there are a lot of different types of investors interested in getting involved in investing in affordable housing."
Projects or portfolios can be at any stage of development, and it can be for new builds, renovations or retrofits.
"We're not trying to replace public funding or position private investment above public funding," Jessica said. "This allows organizations to diversify their funding and identify additional opportunities for funding outside what they usually access."
Organizations can indicate what type of financing they're looking for — such as grants, equity, bridge financing, etc. — and they can provide exact dollar amounts needed or a range.
Investors can indicate what ROI they're seeking, whether there's a lock-in period, and if they're interested in investing in certain cities, provinces or regions, along with any other information that might be relevant to their wants and needs.
“It's all information to give someone a snapshot into what you're looking for, then click Connect to learn more."
You can browse by investor profiles, developer profiles, and available projects.
In the pilot last year, most commonly they found developers with existing projects with initial funding from CMHC or another level of government were able to connect with investors to get additional funding.
"Overall, these projects are going ahead ... but how can you diversify the financing contributing to that project beyond who you might usually have?"
For some projects, that additional funding could create better affordability for tenants.
Early opportunities to connect
CMHC says the Capital Connect pilot project was created in hopes of achieving the goal of housing affordability in line with the National Housing Strategy.
It launched in January 2023 with a small test group, and they've incorporated changes based on that first test group's feedback. Now, the platform is opening up to any investor or developer interested in joining. They want as many people as possible to try the tool, and if it isn't a good fit, they want to hear why it didn't work so they can continue to make improvements.
It's a pilot project, but Jessica says it has a polished user experience and it's beyond a minimum viable project.
"The more people that come online, the better the benefit of the networking platform," she said. "Joining now, you'd be part of the early adopters of organizations that are trying it out. You get first pick at exposure and ability to connect with organizations."
Investors who join now will be the first to see available projects across Canada, and developers will get that early opportunity to connect with them.
Currently, the platform allows one account per organization, so the person who signs up on behalf of the developer or investor should be someone who manages connections. Once an investor and developer connect on the platform, the rest of the communication, and hopefully the resulting partnership, moves to off-platform emails and phone calls.
After this pilot project phase, they're looking to pass the platform to another organization to run so it's external to CMHC.
"We have the strength in network when it comes to developers because they're our clients, but we don't necessarily have the strength and network when it comes to investors."
CMHC has done this type of technology incubation before, like with Sparrow, a homesharing app.
Information session recording
The Capital Connect team, including Jessica, hosted an information session on May 22, including a live demo, to highlight the platform's features and benefits.
Watch the recording here:
For English: link
For French: link
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