Land trust selling bonds to raise $1.72M for affordable housing

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When the Ottawa Community Land Trust was looking for a way to raise money to buy more multi-unit apartment buildings for the city’s affordable housing stock, the non-profit landed on something different: Issuing community bonds.

Last month, the land trust held a launch at a Bank Street coffee shop. The eventual goal is to raise $1.72 million through the sale of the bonds, buy up more affordable housing units and offer investors a reasonable rate of return.

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The land trust aims to use $485,000 of the money to refinance repayable loans on a six-unit Kirkwood Avenue apartment building it already owns, then establish a “revolving fund” to buy at least two more multi-unit buildings by the end of the year, said executive director Mike Bulthuis.

But the ultimate goal is much bigger than that. The land trust aims to buy hundreds of affordable units over the next few years.

“Between 2011 and 2021, our city lost 30,000 units that had been renting for under $1,000,” said Bulthuis. “We are ambitious in wanting to preserve buildings over as many units as possible.”

At the time the Ottawa Community Land Trust bonds were launched last month, the trust had received $350,000 in commitments from three organizations including $100,000 from the United Way of Ottawa. Since then, the bonds have attracted another $100,000, mostly from individual investors, said Bulthuis.

A land trust is a non-profit that acquires and holds property for the public good. Long associated with preserving rural conservation land, there’s a growing number of urban and suburban land trusts that aim to preserve existing buildings for affordable housing.

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Community bonds, a “social finance tool,” are an emerging way for non-profits to raise the money. While there are other methods, such as federal, provincial or municipal grants, community bonds are a “bridging mechanism” to fill gaps, said Nat Pace, coordinator for the Canadian Network of Community Land Trusts.

Every bond offering has its own legal structure and goals.

The Ottawa Land Trust Bonds bonds are administered by Tapestry Community Capital, which raises and manages community bonds. The rates of return depend on the amount and time invested.

Series A requires a minimum investment of $1,000 with a return of 3.5 per cent over three years.

Series B requires a minimum $5,000 investment, with 4 per cent return over five years.

Series C requires at least $50,000 over…