Developing non-profit housing projects requires completing several process steps. There are several organizations that can help in the journey, with either expert resources, grants and/or loans. Key partners include (and their acronyms):
The New Brunswick Non-Profit Housing Association (NBNPHA) works with non-profit and co-op developers to work through this process.
Building affordable housing requires land. As a developer, you or your organization may own land now or are looking for an appropriate parcel. Key property attributes to be aware of prior to committing to a property include:
Several necessary process steps need to be completed before construction of a project. As a non-profit or co-op housing group, most of these process steps are eligible for financial grants or loans. Common steps include:
Building an energy efficient building is required today - for the benefit of saving utility costs and to help address our impact on climate change. Funding partners such as FCM, CMHC and SD provide incentives for meeting certain energy efficiency standards based on features such as improved insulation, energy efficient heating and cooling systems, lighting, and even solar energy.
Much like energy efficiency, ensuring properties are barrier-free and accessible is necessary. Supporting organizations provide specifications (such as where to place grab bars in bathrooms and how steep a wheelchair ramp should be) and in some cases specify the number of barrier-free units in a project based on their financial contribution to the project.
Several partners listed above play key roles in helping obtain financing, in the form of grants, loans or mortgages. Pre-development activities are essential in order to successfully apply for, and obtain financing. Elements that need to be known and well presented include:
Once the previous steps are complete, you can now begin construction! Several important activities for construction include:
Identifying an appropriate property for your development is likely the most important element of your project. The location, cost, services, and environmental condition are all factors to consider.
The location of a project will have a long lasting impact on the residents for decades, whether they are seniors, youth or new Canadians working in your community. As an example, if the CMHC Co-Investment Fund (more on that later) is used for your project, points are actually award for proximity to amenities such as:
These are not the only factors to consider when selecting a site, others may include:
You need to own the property on which you plan to build, or at least demonstrate a commitment to the property via a letter of understanding or first right of refusal with the current owner in order to obtain funding for pre-development activities. The pre-development phase includes several activities, such as:
Most of these activities can be funded by FCM, CMHC, or RDC, all of which require applications for funding. NBNPHA prepared this Housing funding worksheet template to identify all potential process steps and which organization could fund those activities.
1. BUSINESS CASE
A business case report summarizes all aspects of your development. These reports can be written in-house of subcontracted. Typical report elements include:
Water supply, wastewater system, roads, electricity, and communications (Internet, telephone, cable) all are necessary components of your project. Key activities need to include:
3. PRELIMINARY BUILDING AND SITE PLANS
The preliminary building plans are used to help various stakeholders visualize the project. These are not the final constriction drawings, but do share information and renderings of floor plans, number of units, elevations, 3D renderings.
The site plan identifies where the budling(s) are located on the property, where and how services run, where parking spaces are located, landscaping, drainage plan, elevations, i.e., ensure the property does not flood, and the elevation of the buildings.
A building less than 600 square metres (6,450 square feet) can be designed by engineers or designers. Architects are needed for designing buildings over 600 square metres, as required of the National Building Code (NBC). For example, a 10-unit affordable apartment building (multi-unit residential building, otherwise known as a MURB) with an average square foot per unit of 900 square feet, plus common space such as hallways, would have an area of about 11,000 square feet. That said, ten single homes or five duplexes on the same property do not require an architect. Full construction drawings must meet the NBC and local requirements to obtain the necessary building permits.
The preliminary building and site plans are of value to the following stakeholders:
All projects require a building permit. That said, the process can vary by municipality and/or regional service commission (RSC). Permit information and requirements could include an overall building permit, electrical permit, plumbing permit as well as completion of forms that address water demand, energy efficiency, etc.
Check with your own municipality to access their building permit requirements. Building permits typically cost about $5 per $1,000 value of a project (this could vary slightly by jurisdiction). For example, a building permit for a $1,000,000 project (say five units at $200,000 per unit) would cost about $5,000. These costs need to be included in the budget.
5. BRANDING AND MARKETING
The reality on today's housing market is that there is already a waiting list for every new rental unit that is built, regardless of demographic. That said, branding the project is important so that potential residents can visualize their new home from renderings and community members can visualize the new property.
That said, managing the narrative around the project is important as well for all stakeholders - who are the target tenants? What benefits will the project bring to the community? What are the social values of the owner? Etc. A simple website, community consultations and local media engagement should be combined to brand your project.
6. ARRANGING FINANCING
See Section E. Financing below for more details.
7. TARGET RESIDENTS
Who your target residents are can determine potential funding sources. For example, the SD Affordable Rental Housing Program (ARHP) provides financial assistance to private entrepreneurs, private non-profit corporations (includes off-reserve Indigenous population), and co-operatives for the construction, rehabilitation, and conversion of rental housing projects. Sourced from the SD ARHP website:
Assistance is in the form of a forgivable loan and is based on the cost of eligible work and the number of eligible self-contained units or bed units within a project. The maximum forgivable contribution for projects sponsored by non-profit groups is up to $70,000 per unit and may include 100% of the units within a project. Private entrepreneurs are eligible for a maximum forgivable contribution of up to $60,000 per unit, limited to no more than 50% of the total units within a project. Borrowers will enter into a Mortgage Agreement with this department to ensure that units remain affordable to low and moderate income households.
Interest free personal development funding loans are provided to assist eligible non-profit & co-operative sponsors of projects to carry out the activities required to develop a project proposal to the point where a commitment of assistance can be made.
Where situations warrant rental subsidies (Rent Supplements) may be provided to ensure units are affordable to low-income households. Tenants qualifying for assistance through the Rent Supplement Program will have their rents reduced to 30% of the adjusted household income. Landlords will receive the difference between the rent paid by the tenant and the market rent agreed to under a rental agreement.
Projects that receive ARHP funding must comply with the GNB Green Building Policy and Barrier-Free Design Building Code Regulation – Building Code Administration Act.
Building energy efficient homes helps lower electricity costs and our impact on climate change. Fortunately NB Power, CMHC and FCM all provide incentives to help offset additional capital costs on items such as improved insulation, more efficient heat pumps, water heaters and even solar panels.
Barrier-free specifications that address items such as ramps, accessible bathrooms, kitchens and bedrooms are in place to ensure resident safety and accessibility. Projects that receive federal and ARHP funding are required to meet accessibility specifications. The provincial Barrier-Free Design Building Code Regulation – Building Code Administration Act provides the specifications. NBNPHA is leading a project to convert the regulation into functional drawings to help accelerate the approval of projects that comply with the regulation.
There are several sources for financing a project, including CMHC, FCM, SD, Kaleidoscope, NB Power, municipalities and other financial institutions. These organizations are committed to making affordable housing happen in the province. A brief summary of each:
Now that all of the above work is complete, you can start building!
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