GreenON Social Housing
Last fall, HSC’s Energy Services team made a pitch to Green Ontario about using cap and trade funding to help our sector lower greenhouse gas emissions. On February 9, after months of negotiations and planning, the Ministers of Housing and Environment & Climate Change announced the GreenON Social Housing Program – to be administered by HSC.
The program will make $25 million available to fund retrofits in buildings with less than 100 units across Ontario. Funding will flow through Service Managers who will submit business cases on a portfolio-wide level. Eligible retrofit projects include:
Providers interested in the program should contact their Service Managers for local process and evaluation details.
|Visit the GreenON Social Housing webpage for more information|
Energy Matters newsletter
Our next Energy Matters newsletter is coming out shortly. In the meantime, if you didn’t catch our December issue you may be interested in stories about:
|Read the December 2017 issue of Energy Matters||Subscribe to the Energy Matters newsletter|
New Bulk Purchase Option for Tenant Insurance
Tenant insurance is a simple way for residents to protect themselves in the event of a catastrophe and for providers to reduce their risk exposure. It prevents homelessness after fires or floods by covering temporary living expenses, if a home is uninhabitable, and decreases a resident’s exposure to liability if their actions injure other tenants or damage property.
As such, a number of providers have implemented mandatory tenant insurance policies in their buildings. However, monitoring compliance is tough. Some tenants will take out policies when completing their rental agreement (to show proof) and then cancel their policy. Managing compliance on an ongoing basis is administratively burdensome.
To address this issue, HSC has now developed a bulk purchase option for tenant insurance to be paid by providers or Service Managers. Buying in bulk reduces the cost of the insurance by almost half. It makes administration straightforward. It helps control your organization’s insurance costs. In addition, providers and Service Managers who are responsible for tenants housed with private landlords (using portable housing benefits, local housing allowances or rent supplements) are eligible to insure these tenants.
|Read more about HSC’s Bulk Purchase Option for Tenant Insurance|
Managing Risky Business
Brian’s quarterly email update came out just recently. If you haven’t seen it, it featured stories on:
|View the Q1/2018 issue of Managing Risky Business||Subscribe to Managing Risky Business|
Upcoming SHARE Webinars
Cannabis Legalization: What Social Housing Providers Need to Know
April 18, 2018 | 12:30 to 1:30 EST | Cost: FREE
We’re not sure when, but we know it’s coming. Legalized cannabis in social housing remains a concern for many housing administrators. For social housing administrators, there are many unknowns including its implications for operating and managing the housing asset and tenancies.
This webinar is designed to inform and address considerations with respect to regulation and insurance as they relate to social housing. Speakers will share their insights about the regulatory areas that housing providers should be aware of and the implications from a property risk management perspective. You will learn about:
This is webinar is designed for housing administrators, housing providers, property management staff and Boards to help them understand and make sense of the cannabis law reform to inform their operating and administration policy and practices.
|Read more and register now|
Procurement | Let’s Talk Development Lingo
May 9, 2018 | 12:30 to 1:30 EST | Cost: FREE
What should housing administrators consider when preparing a RFP for affordable housing development and regeneration? Shifts in the way portfolios and projects are envisioned, planned, delivered and the innovative partnerships established between public and private are influencing how RFPs are crafted. Housing administrators are faced with developing the scope of a RFP, wearing the developer hat to articulate housing priorities and adhering to procurement rules. RFP bidders on the other hand; often face challenges in understanding what housing administrators “really want to say”, what is achievable and the expected outputs.
This webinar will provide an overview of some of the main considerations for housing administrators seeking to develop an RFP.
|Read more and register now|
Skill Sets & Competencies to Facilitate Business Transformation in the Community Housing Sector
May 30, 2018 | 12:30 to 1:30 EST | Cost: FREE
This webinar will discuss the findings of a new national research project conducted by Housing Partnership Canada. Specifically, it will address how housing organizations are transforming the ways in which they do business — managing talent, adjusting business practices and investing in organizational development — to future-proof their business.
|Read more and register now|
Transforming the Thinking: Portable Housing Benefit
September 12, 2018 | 12:30 to 1:30 EST | Cost: FREE
This is an opportunity to learn about the innovative thinking, approach and implementation strategy being piloted by the City of Kingston to evaluate both the tenancy and the administration outcomes of the portable housing benefit.
|Read more and register now|
2019 Regeneration Forum: Save the Date!
In my May 2017 update, I mentioned that HSC had committed to putting on another Regeneration Forum. We now have a date and venue for the event: March 25 and 26, 2019 at the Marriott Eaton Centre Hotel in downtown Toronto.
For those who are new to the sector, HSC’s Regeneration Forums are focused on thinking big and generating new strategies for revitalizing Canadian housing and communities. Since 2012, the Forums have featured speakers from across Canada and the world who have shared their practical expertise on the nuts and bolts of regeneration. You can view videos, presentations and audio recordings from previous Regeneration Forums on the SHARE website.
We are currently in the early planning stages for our 2019 event. Programming details will be available later this year. As with our previous Forums, sponsorship opportunities will also be available. If you have an initiative in regeneration that you’d like to share, our organizing committee would be interested in hearing from you.
|Contact us about your regeneration initiative||Contact us for sponsorship opportunities||View material from previous Regeneration Forums|
Encasa Financial: A Vital Partner to HSC and the Sector
Encasa Financial (formerly SHSC Financial) manages the Social Housing Investment Program on behalf of HSC. The program was developed more than 15 years ago as part of the formation of HSC and the Province’s response to a series of Auditor General’s recommendations relating to the effective management of capital reserves and the future self-sufficiency of housing providers. In October 2014, it became Encasa Financial under a new expanded ownership model that includes the Cooperative Housing Federation of Canada, CHF BC and the BC Non-Profit Housing Association.
Over the years, the organization has been able to develop a strong value proposition: management expense ratios that are among the lowest in the market; access to professional advice; strong growth of investments over time. Today, approximately 890 Canadian providers invest with Encasa Financial with $546 million total assets under management. Derek Ballantyne became CEO of Encasa in 2014 to lead the transformation to a national entity.
Derek is a housing dynamo – earlier in his career, he worked in senior roles at Build Toronto, Toronto Community Housing and Ottawa City Living. Today, he splits his time between Encasa, the Community Forward Fund, New Commons Development and DKGI Inc. Derek is a director of the Laidlaw Foundation. At the end of April, he will become the Board Chair of the Canada Mortgage and Housing Corporation (CMHC).
Full disclosure: my own personal history with Derek spans back to his time as CEO of Toronto Community Housing Corporation (TCHC) in the early 2000s. I was TCHC’s General Counsel and Corporate Secretary at the time. Together, we worked on raising $450 million from the debt capital markets to finance the Regent Park redevelopment and to establish TCHC’s AA- credit rating from S&P. Since then, we’ve maintained a strong collegial relationship.
Can you tell us a bit about your involvement with Encasa over the years?
As one of the original board members of Housing Services Corporation (HSC), I was involved in the inception of SHSC Financial (now Encasa) in 2002. I then sat on the Board for five or six years while I served as the CEO of Toronto Community Housing (TCHC) and with Build Toronto.
TCHC was not actually a client of SHSCFI. Prior to the download, certain large providers were permitted to create their own investment programs; TCHC was one of these providers. So my involvement on the board was more about my interest in the sector and to share expertise.
After not being involved with the organization for several years, in 2014 I was hired as CEO for Encasa once it was established.
Looking back, did the mandatory nature of the Social Housing Investment Program play a role in the success of the program?
SHSCFI was created out of two parallel developments: the early success of the investment programs of the few large providers and the desire by the sector to see this opportunity available to all providers, and an Auditor General report on the capital reserves of non-profit providers.
The sector was lobbying the Province to allow housing providers to have more exposure to the markets for their investments, so they could earn more than they were earning with GICs, which was as aggressive an investment they could access at the time. They were encouraging a sector-managed pooled investment program.
At the same time, the Auditor General had expressed concerns about how the Province was not doing enough to ensure that reserve investments were keeping up with inflation and to reduce the incidence of borrowing from reserve funds for operating purposes. So it was a program that was in many ways welcomed by the sector.
At the time, some providers would have preferred to just be allowed to do what they wanted to do – not to be constrained by anything. That is a public policy challenge for any government that funds housing providers – proper stewardship of a program is essential, and the benefit of an investment program should accrue to all providers. So the mandatory participation in the program was a response to this.
Although the program’s success didn’t rely on being mandatory, having such a large investment pool allowed the fund to scale quickly. The economics of this type of program are all in how much capital you have in the investments. It took about 3 years to achieve scale and losses were only really experienced in the first year. Had it taken 5 or 6 years, the program would have experienced losses for the first 5 years. So having the mandatory requirement allowed the fund to scale more quickly. The program has added a lot of net value back to housing providers – tens of millions of dollars of value have been added to the capital reserves of housing providers across Ontario. More than $160 million has been earned on provider contributions since inception.
There’s no doubt that there are some providers in the program that could do reasonably well in the market on their own – they’re large and they have large reserves. Mandating the aggregation of the capital meant you could get a very efficient program – non-profits and cooperatives of various sizes could participate at a relatively low cost. Small providers could have access to a program that individually they’d never be able to access. Or if they could, it would be at a much higher cost.
You came on as CEO as SHSC Financial became Encasa. For Ontario investors, this mostly seemed to involve a name change – their funds remained the same, they continued to get their quarterly statements. But it involved a lot more than that. Can you tell us about that transition?
Beneath the name change, there were a few considerations for HSC when it decided to expand the ownership and open the program up to non-Ontario investors. They all related to stabilizing the fund and controlling costs.
Prior to the formation of Encasa, all of our investors were Ontario-based. Because much of the non-profit and cooperative housing stock in Ontario was built around the same time, it is (and will) require major, capital reinvestment at roughly the same time. This posed a risk to the Social Housing Investment Program because we’d likely see a surge in withdrawals at certain periods of time. The impact of large fluctuations in the amount of assets being managed would be difficult to weather in terms of costs.
Encouraging investment from other parts of Canada made sense because it would help the fund remain stable even if Ontario providers withdraw at relatively high rates. And while there isn’t much more investable capital in Ontario, there’s a lot of capital among providers outside Ontario – particularly in Alberta and British Columbia. So it made sense to restructure and actively pursue capital outside of Ontario.
A larger fund with a growing investor base also enables us to dilute the impact of overhead costs. Costs rise over time – so the best thing to do is to increase the amount of capital you’re managing. So getting bigger is better for everyone because it keeps the costs down and allows us to keep offering low fees.
And then finally HSC, like everyone else, is interested in building robust organizations and the Canadian market is comparatively small. So if you want robust and stable sector-based financial institutions, a pan-Canadian makes sense.
Encasa recently moved offices. Can you tell us why and about what’s ahead for Encasa and how it works with the sector?
We moved because we’re making a fairly significant change to our business and it requires more space for additional staff.
In the past, we had an arrangement with RBC Global Asset Management and Philips, Hager and North (PH&N) to service investors. The arrangement worked well when most investors were mandated but it didn’t really fit with our evolving business. It presented issues in terms of customer service that we recognized and our clients noticed as well. This is an area where we really want to improve.
So we’re in the process of taking on the role with clients that PH&N previously had. Investors will see Encasa advisors; they will phone us if they need help; they will meet with an Encasa advisor; if you’re new to the program you will be onboarded by an Encasa advisor. These functions will be delvered in collaboration with our new partner, Worldsource Financial Management.
These changes will also allow us in time to have the flexibility to work with investment managers who may be better performers, better aligned with our values, or better able to implement the Encasa investment policies. In the end, the changes mean that we’ll be able to provide better customer service and deliver the best value for our unitholders.
As an Investment Fund Manager that works with some 890 housing providers, Encasa has a unique view on the social housing sector. Have you noticed any trends in recent years that are noteworthy?
As we predicted, we are seeing Ontario housing providers draw on their capital reserves in greater proportion. Housing providers are spending their money on capital repairs.
Over the past three years we’re also seeing a significant number of housing providers that are spending all of their capital reserves and then are starting to build them up again. We’ve also noticed more sophistication in the choice of investment funds. There’s been a gradual diversification across the three funds. I think that’s largely the result of improved capital planning. Service Managers have been working to support improved capital planning and that leads to improved financial planning. As your knowledge of what your future capital requirements are, you are then able to make a better assessment of where to place your funds. We see the results of this planning in the growth in our equity fund, for example.
What advise would you give to Ontario providers on maximizing their investments?
The basis of sound investment decisions is having a good knowledge of your capital requirements. Having a complete capital plan that’s kept up to date is critical because it tells you what your cash requirements are going to be. Based on that, you can work with Encasa to decide how to allocate your investments to manage risk while achieving the returns that you target in your financial plan.
At the end of April, you’ll be starting your term as CMHC Board Chair. Can you tell us about what knowledge or insights from Encasa that you’ll be bringing to that table?
I think my work with Encasa has helped me better understand the sector. It’s allowed me to have a system-wide view versus my experience with TCHC, which was with one particular provider and in one place in the sector. In addition, working Encasa has involved getting more familiar with non-profits and co-ops in other parts of Canada. This in turn means gaining some understanding of the issues in those communities and the diversity of housing markets across Canada.
The knowledge and insights I’ve gained at Encasa will be helpful in completing with the work the CMHC Board has ahead of it – in particular, overseeing the implementation of the National Housing Strategy.
Housing Partnership Canada: Business Transformation Study Coming Soon!
The way we do the business of housing is changing. This is the key finding of a forthcoming study from Housing Partnership Canada (HPC), which is the most comprehensive of its kind in recent years.
Skillsets and Core Competencies to Facilitate Business Transformation in the Non-Profit Community Housing Sector is a follow-up of a study HPC released in 2015, which examined organizations that have expanded their activities as part of their efforts to improve their financial performance and deliver a greater social impact.
The new study, which will be released this Spring, shifts the focus of transformation to how organizations are changing their management approach and the way their people work – taking a more business-minded approach, changing skill sets, modernizing practices and building new partnerships, to name a few examples.
With findings based on 213 survey responses and interviews with 21 non-profits across Canada, the study is the most comprehensive of its kind in recent years. HPC will be launching the paper at this year’s Canadian Housing & Renewal Association Congress in Ottawa. There will also be a SHARE webinar on the study’s findings on May 30.
|Register for the SHARE webinar||View the 2015 Report on Business Transformation||View the 2015 Case Studies only|
Welcome OMSSA, Farewell Encasa
Back in 2012, HSC moved to its office at 30 Duncan Street with what was then SHSC Financial (SHSCFI), an HSC subsidiary. We moved in on the fifth floor and SHSCFI had a small office on the sixth floor.
Fast forward five years and SHSCFI is Encasa – owned jointly by CHF Canada, CHF BC, BC Non-Profit Housing Association and HSC. Today Encasa manages more than $546 million on behalf of housing providers in Ontario, British Columbia and Alberta. To meet growing client needs and execute on their business strategy (see our interview with Derek Ballantyne above), Encasa moved to a bigger office down the street at the end of 2017.
As fate would have it, Encasa’s plans coincided with those of the Ontario Municipal Social Services Association (OMSSA). Since we share clients with OMSSA and our work with Service Managers intersects, a unique opportunity presented itself for OMSSA to take over the Encasa office space. We welcomed OMSSA staff to 30 Duncan Street in late-February with a pizza lunch (pictures below).
We look forward to improving our coordination with OMSSA and enjoying a neighbourly relationship with them.
119 Spadina Avenue, Suite 400
|Ontario Municipal Social Services Association
30 Duncan Street, Suite 606
Since our last update, we continued our hands-on work with the sector with:
|CEO Meetings & Presentations
||Insurance & Risk Management
|Asset Management & Renewal
We want to meet you! Contact one of our program specialists today.
Comings & Goings
Right before the holidays, the Canada Mortgage and Housing Corporation (CMHC) announced several new appointments to its board. We were pleased to see the social housing sector strongly represented. Encasa CEO Derek Ballantyne will become CMHC Board Chair. Housing Partnership Canada member and CEO of Atira Women’s Resource Society Janice Abbott will also serve on the board. Congratulations Derek and Janice!
Since the last update, we also said some goodbyes – to Carol Barber at Cochrane District Social Services Administration Board; to Scott Robertson here at HSC; and to Dan Troke at Niagara Regional Housing. We will miss each of them and commend them for their commitment to housing.
We also welcomed Donna Woiceshyn, who’s serving as acting CEO at Niagara. And here at HSC, Katherine Perrino-Smith joined the HSC Insurance team at the start of the year.
At Toronto Community Housing, I’d like to congratulate Ismail Ibrahim (General Counsel & Corporate Secretary), Rose-Ann Lee (CFO and Treasurer) and Vincent Tong (Chief Development Officer) who have moved from acting to permanent assignments.
Finally, a big congratulations to HSC Board member Stéphane Giguère and the team at Ottawa Community Housing for being named one of the National Capital Region’s Top Employers for 2018. For housing to succeed in its mission, we need to compete for top talent and make ourselves an employer of choice. OCH’s win shows us that this is possible.