$18.5 million in private lending for building modernization caught in red tape
OTTAWA, July 13, 2017 /CNW/ - Multi-million dollar renovation plans at three Ontario housing co-ops are in limbo after receiving government demands to cancel rental assistance to low-income families.
The three co-ops – Quarry Co-op in Ottawa, and Chadwick Towers and Spruce Court co-ops in Toronto – have long-term mortgages with CMHC at average interest rates of 8%. New low-interest financing totaling $18.5 million has been offered to the co-ops by their credit unions, but CMHC approval is required to finalize the lending. These new mortgages would allow the co-ops to prepay their high-interest CMHC mortgages, as well as modernize their buildings.
According to letters, the crown corporation will not approve the refinancing deals unless the co-ops agree to prematurely cancel government funded housing assistance to 125 low-income families.
All three co-ops have rejected CMHC's terms, trapping them in long term high interest mortgages that will delay modernizing the co-ops for another decade.
"If we take the new mortgage, federal help for our low-income members will end five years early, and 45 families will face economic eviction from our co-op," said Linda Poulson, President of Quarry Housing Co-operative. "We are being forced to choose between protecting our low-income members and modernizing our building, and that is not acceptable."
The co-ops and the Co-operative Housing Federation of Canada (CHF Canada) have called on CMHC to respect the government's commitment to supporting low-income households living in housing co-ops by keeping rent-supplements in place for low-income households.
"These co-ops are doing their part by leveraging private dollars for the modernization of affordable housing," said Tim Ross, CHF Canada's Director of Strategic Affairs. "Now we encourage the government to do its part by expanding mortgage prepayment terms so that low-income families are protected."
CHF Canada is the national voice of the Canadian co-operative housing movement. Its members include over 900 non-profit housing co-operatives and other organizations across Canada. More than a quarter of a million Canadians live in housing co-ops, in every province and territory.