A New Aboriginal Housing Framework: Transformative Change

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A New Aboriginal Housing FrameworkTransformati
ve Change

• By Arthur Donner
• September 8, 2005

2
Disclaimer

• This deck is produced by the Donner Group for the
  Minister of Housing
• It does not necessarily represent government
  policy
• Any remaining errors are the responsibility of
  the Donner Group
• Comments or questions should be directed to the
  Donner Group

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Goals of the Aboriginal Housing Framework

• Transformative change
• Empowerment
• Transparency accountability
• Integrate all federal Aboriginal housing funding
• Practical and flexible

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Aboriginal Housing Framework Linkages
Social Services
Health
Culture
Housing
Education
Economic Development
Governance
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Challenges

• More resources are required to improve access to
  housing for Aboriginal people
• Need to improve capacity to manage housing stock
• Large housing gap between Aboriginal people and
  other Canadians
• Discrimination in off-reserve access
• Barriers to market housing on and off reserve

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Process Issues

• Desire for a government to government approach
  with First Nations for housing
• Appropriate governance models with Métis, Inuit,
  and other off-reserve aboriginal groups
• Fully engage provincial and territorial
  governments in their jurisdictional areas

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Fed-Prov Cooperation

• Challenges
• Provincial jurisdiction
• Horizontal equity concerns
• Lack of Trust
• Benefits
• More resources
• Reduced homelessness
• Improved social outcomes

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Aboriginal Housing System Elements

• Social (Public) Housing
• Repair
• Land tenure on-reserve
• Market Housing
• Home Ownership Rental
• Homelessness

• Building Standards
• Financial Instruments (e.g., mortgages)
• Capacity-building (e.g., operators, construction,
  planning)
• Infrastructure
• RD (e.g., structural improvement)

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Examples of Housing Needs

• Family Dwellings (singles and multiples)
• Seniors Homes
• Shelters for Women and Children
• Housing for Students
• Transient Housing during Family Health Care
• Housing for young singles (men and women)
• Motels, hotels, and lodges

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Social and Market Housing
Social
Market
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Transformative Change - I

• Recognition of housing needs of all Aboriginal
  people regardless of where they live
• Eliminate the housing gap between Aboriginal
  people and other Canadians
• Federal government to provide additional
  Aboriginal housing funds
• For reserves
• In non-reserve areas in the Provinces
• In the Territories
• Facilitate market housing for Aboriginal people
  in all areas

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Transformative Change II

• Empowerment through a new Aboriginal housing
  system with Aboriginal governance and
  accountability
• Clear roles for First Nations, Métis and Inuit
• An independent finance corporation for Aboriginal
  housing
• Build on and strengthen the existing base of
  Aboriginal financial institutions (AFIs) and
  housing institutions
• Encourage new Aboriginal housing institutions

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Transformative Change III

• Major focus on capacity-building throughout the
  Aboriginal housing system
• Improved information base on housing needs and
  performance using the First Nations Statistical
  Institute (FNSI)
• Enable full participation of provinces,
  territories, First Nations and local governments
  in Aboriginal housing

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Transformative Change - IV

• Consolidate all new federal Aboriginal housing
  funding
• Include existing INAC and CMHC funding
• Provide grants only on the basis of housing needs

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Model Framework
AFC
Housing Corporations
Bands and Providers
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Overview of Separate Corporations
AFC
MHC
IHC
FNHC
RUAHC
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AFC Lending Flows
Band
HPs
Households
Household
AFIs
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AFC Grant Flows
HP
HP
HP
Band
HH
HH
HH
HH
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Common Principles

• Equal access to federal grants
• Allocation based on relative housing needs and
  relative costs, using fact-based, consistent
  methodology
• Open and transparent processes
• Use existing structures and develop capacity
  throughout system
• Loans based on credit risk and ability to pay
• Appropriate mix of grants and loans to meet
  housing needs

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Aboriginal Finance Corporation (AFC)

• Crown-like corporation
• Financial Institution
• Regulated by OSFI
• Board named by Canada including Aboriginal
  representation
• Accountable to Parliament
• Flows Loans and Grants through system to providers

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Creation of Housing Corporations

• First Nations Housing Corporation (FNHC)
• Métis Housing Corporation (MHC)
• Inuit Housing Corporation (IHC)
• Rural and Urban Aboriginal Housing Corporation
  (RUAHC)

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Housing Authorities, Bands, Service Providers

• This is the front line where the housing needs
  are most obvious
• The supportive housing corporations will supply
  dollars, help train the people, develop
  procedures
• Programs to extend the life of dwellings are
  delivered here
• There are about 2,000 organizations at this level

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AFC Flows
AFC
Treasury Function
Appropriations
Loans Mortgages Equity Insurance
GrantsTraining
LendingInsurance
GrantsCapacity
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Providers and Householdsoff-reserve
AFC
HCs
AFIs
HP
P/T
HH
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Providers and Householdson-reserve
AFC
FNHC
AFIs
Band
HH
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AFC Lending Functions

• Borrows in capital markets or lends
  government-provided funds
• Lends to organizations focused on the creation of
  additional aboriginal housing and maintenance of
  the current stock
• Provides mortgage insurance/ indemnity
• Oversight of housing corporations

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AFC Granting Functions

• Receives all federal grant and operating monies
  for Aboriginal housing
• Allocates to housing corporations based on
  relative need and relative cost
• Funds capacity development

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AFC Delivery Functions

• Design an appropriate mix of loans and grants to
  meet housing needs
• Request proposals for under-served areas
• Provide information about Aboriginal housing
  (e.g., numbers, crowding, core needs, forecasts,
  costs)
• Operate the Common Concerns Circle to improve
  capacity

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Other Activities of AFC

• Legal/Contracts for Lending Instruments
• Audit and Evaluation
• Reports and evaluates outcomes
• Information and Analysis of Aboriginal Housing
• Standards for Aboriginal Housing National
  Building Code plus
• Human Resources and Training
• Common Concerns Circle - Secretariat

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Reaching the People
Households
FNHC
600 Bands
90,000
MHC
300 communities
130,000
AFC
RUAHC
600 communities
170,000
IHC
50 communities
13,100
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First Nations Housing Corporation (FNHC)

• Non-share capital corporation, non-profit
• Regulated Financial Institution by FNFA? and AFC
• Initial Board named by Canada in consultation
  with AFN, NWAC, and AFC
• Substantial experience in housing, financial,
  infrastructure.
• Regional representation expected
• Accountable to AFC, AFN, NWAC, and First Nations
• Provides Loans and Grants to Bands

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FNHC Lending Functions

• Aggregate the housing finance needs for 600
  First Nation communities
• Apply for funds and negotiate the terms and
  conditions for borrowing from AFC
• Lend to bands, housing authorities, or
  individuals for
• New housing construction
• Rehabilitation
• Monitor existing housing debt on reserve
• Administer residual Ministers Guarantees

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FNHC Granting Functions

• Allocates to Bands based on relative needs and
  relative costs
• Uses fact-based, consistent methodology
• Funds capacity development

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FNHC Delivery Functions

• Design programs for an appropriate mix of grants
  and loans to meet housing needs
• Issue regional RFPs using existing housing
  networks where possible

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FNHC - Additional Activities

• Building on existing aboriginal suppliers,
  provide inspection of new existing housing
• Capacity Building training systems
• Audit and Evaluation
• Develop Appropriate Housing Standards
• Gather information on reserve housing and work
  with FNSI
• Participate in Common Concerns Circle

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Major Objectives of FNHC

• Strengthen capacity to build and manage housing
• Adequate housing infrastructure
• Increases in market housing owners and rentals
• Security agreements with bands
• Tenure guarantees for homeowners
• Meet social housing needs
• Improved quality of existing housing
• Build new social housing
• Contribute to economic development

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Rural and Urban Aboriginal Housing Corporation
(RUAHC)

• Non-share capital corporation, non-profit
• Initial Board named by Canada in consultation
  with 5 NAOs, provinces, and territories
• Substantial experience in housing, financial,
  infrastructure
• Regional representation expected
• Accountable to AFC (and all NAOs?)
• Provides grants to housing providers serving
  Aboriginal people, off reserve

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Principles of RUAHC

• Support to status-blind housing projects
• Other specific groups
• Status Indians non-reserve
• Non-status Indians
• Inuit in South
• Coordinate activities with provinces and local
  governments

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Lending Functions RUAHC

• Aggregate the housing finance needs for
  aboriginals in rural and urban areas, not
  otherwise covered
• Apply for funds and negotiate the terms and
  conditions for borrowing from AFC

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Granting Functions RUAHC

• Allocates to housing providers based on relative
  needs and relative costs
• Uses fact-based, consistent methodology
• Funds capacity development
• Could co-ordinate or partner with P/T

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Delivery Functions RUAHC

• Design programs for an appropriate mix of grants
  and loans to meet housing needs
• Issue regional RFPs using existing housing
  networks where possible
• Could partner with P/T housing corporations

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RUAHC (Additional Activities)

• Capacity Building training systems
• Audit and Evaluation
• Gather information on urban and rural housing and
  work with FNSI
• Participate in Common Concerns Circle

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Major Objectives of RUAHC

• Expand aboriginal capacity to build and manage
  housing
• Assist aboriginal organizations fostering
• Home ownership
• Market rental housing
• Meet social housing needs
• Improved quality of existing housing
• Build new social housing

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Métis Housing Corporation (MHC)

• Non-share capital corporation , non-profit
• Initial Board named by Canada in consultation
  with MNC, provinces, and territories
• Substantial experience in housing, financial,
  infrastructure
• Regional representation expected
• Accountable to AFC and MNC
• Provides Grants to housing providers serving
  Métis people

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Principles of MHC

• Support to Métis housing projects
• Support housing providers serving Métis people
• Coordinate activities with provinces and local
  governments

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Lending Functions MHC

• Aggregate the housing finance needs for Métis in
  rural and urban areas
• Apply for funds and negotiate the terms and
  conditions for borrowing from AFC

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Granting Functions MHC

• Allocates to housing providers based on relative
  needs and relative costs
• Uses fact-based, consistent methodology
• Funds capacity development
• Could co-ordinate or partner with P/T

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Delivery Functions MHC

• Design programs for an appropriate mix of grants
  and loans to meet housing needs
• Issue regional RFPs using existing housing
  networks where possible
• Could partner with P/T housing corporations

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MHC (Additional Activities)

• Capacity Building training systems
• Audit and Evaluation
• Gather information on reserve housing and work
  with FNSI
• Participate in Common Concerns Circle

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Major Objectives of MHC

• Expand aboriginal capacity to build and manage
  housing
• Assist aboriginal organizations fostering
• Home ownership
• Market rental housing
• Meet social housing needs
• Improved quality of existing housing
• Build new social housing

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Inuit Housing Corporation (IHC)

• Non-share capital corporation, non-profit
• Initial Board named by Canada in consultation
  with ITK, provinces, and territories
• Substantial experience in housing, financial,
  infrastructure
• Regional representation expected
• Accountable to AFC and ITK?
• Provides grants to housing providers serving
  Inuit people

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Principles of IHC

• Support to Inuit housing projects, particularly
  in the Arctic North
• Coordinate activities with territories, provinces
  and local governments

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Lending Functions IHC

• Aggregate the housing finance needs for Inuit in
  the Arctic North
• Apply for funds and negotiate the terms and
  conditions for borrowing from AFC
• Can contract to Provincial/Territorial Housing
  Authorities

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Granting Functions IHC

• Allocates to housing providers based on relative
  needs and relative costs
• Uses fact-based, consistent methodology
• Funds capacity development
• Could co-ordinate or partner with P/T
• Can contract to Provincial/Territorial Housing
  Authorities

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Delivery Functions IHC

• Design programs for an appropriate mix of grants
  and loans to meet housing needs
• Issue regional RFPs using existing housing
  networks where possible
• Could partner with P/T housing corporations

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IHC (Additional Activities)

• Capacity Building training systems
• Audit and Evaluation
• Coordination across regional Housing Corporations
• Gather information on Inuit housing and work with
  FNSI
• Participate in Common Concerns Circle

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Major Objectives of IHC

• Reduce crowding in houses and meet on-going needs
  through
• Expanding existing housing
• Building new social housing
• Develop market housing options
• Develop adequate infrastructure
• Contribute to economic development
• Expand capacity to build and manage housing

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Common Concerns Circle
AdvisoryGroup
AFC

• Common Concerns Circle
• Research, Data, Training, Best Practices

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CCC Advisory Group

• Four Housing Corporations
• Provinces and Territories
• CMHC

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Activities of the CCC

• Capacity building in areas such as
• Housing management
• Housing development
• Housing quality improvement
• RD on construction in remote areas
• Priorities to be identified by the Common Concern
  Circle Advisory Group

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The Income Spectrum
Owned/rented
Social
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Types of Needs

• Adequacy - in need of major repair
• Suitability - crowded (bedrooms versus people)
• Affordability - spending more than 30 no
  options that meet all criteria at less than 30
• Reduce Backlog - of additional housing stock
  required to meet waiting lists or to reduce
  crowding
• Household Growth units needed to supply net new
  households in that population group

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Sizing of Needs

• On-reserve backlog of 25-33,500 units 20,000
  units need repair annual growth of 4,500
• Inuit backlog of 2,100 1,600 units need repair
  annual growth of 500 units
• Métis backlog of 5,000 7,700 units need repair,
  annual growth of 4,000 units
• Rural and urban backlog of 15,000 units 20,000
  need repair annual growth of 3,000

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Costs of Actions

• Build new social housing units (80K 115K per
  unit)
• Repair existing units (10K-40K)
• Build market housing (80K-200K) (10-20 subsidy
  rate) (8K to 30K)
• Infrastructure 25K per new unit
• Costs in North and Remote Areas - double

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Quick Start of AFC

• Provide an initial allocation to the AFC lending
  function immediately
• Serve as the conduit and allocator of aboriginal
  housing subsidies (one-stop)
• Schedule subsidy flows from government
• Contract for CMHC services initially transform
  into a separate organization as soon as machinery
  of government allows
• This organization could begin operating
  immediately

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Next Steps for AFC

• Ramp up funds for lending as needed
• Start Common Concerns Circle
• Build information base and models for allocation
  of grants
• Define housing needs by province, aboriginal
  group, rural/urban

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Example 1 Individual buys a house

• On reserve AFI handles transaction Band
  enables or risk-shares security for loan. If
  default, Band repays AFI
• Off-reserve AFI handles transactions.
  Aggregates loan with others, and finances through
  AFC. If default, AFI repossesses, AFC may provide
  partial compensation for terminal loss by AFI

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Example 2 New Market Rental Units

• On reserve Housing provider applies for loan
  from Band Band borrows from FNHC as in Example
  1
• Off reserve Housing provider applies to AFI as
  in Example 1

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Example 3 New Social Housing

• On reserve - Band develops a social housing
  project and applies for loan from FNHC. Band
  repays FNHC. If default, FNHC curtails future
  grants
• Off-reserve Housing provider works with housing
  corporation (HC). HC borrows from AFC. If
  default, AFC repossesses and may provide partial
  compensation for terminal loss through
  curtailment of future grants

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Q1 Why an AFC rather than using CMHC?

• Empowerment and Transformative Change
• AFC is
• A separate institution focused on Aboriginal
  housing issues
• A point of integration of all Aboriginal housing
  interests
• Designed to nurture the segments of the housing
  system
• Embraces the principle of equality
• Represents a commitment to improving Aboriginal
  housing

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Q2 Does the new framework add unnecessarily to
costs?

• A new transformative system will have extra costs
• Emphasis on capacity-building will incur
  additional costs
• We think of these costs as investments
  necessary to yield a better housing system for
  Aboriginal people

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Q3 How to fast track the process?

• The AFC can work directly with existing
  Aboriginal financial and housing institutions
• Including bands and local housing providers
• Tap CMHC for capacity-building within AFC and
  elsewhere

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Q4 How might the provinces be engaged?

• Provinces are interested in social housing,
  particularly if some additional funds can be made
  available
• We encourage the MHC, RUAHC, and the IHC to work
  with the P/T
• We invite the P/T to participate in the CCC
  Advisory Group and to assist with the Board
  selection for the three housing corporations in
  their area

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Q5 Why 4 housing corporations, instead of 1?

• Different jurisdictions
• Different needs
• Response to Stakeholders
• Allocation of grants and will be difficult enough
  within one identity group
• Aggregation of loan requests for specific groups
  will be easier than across groups

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Q6 Why are FN off-reserve being served by RUAHC?

• RUAHC deals with provincial framework
• In some areas, FN needs can be met by
  status-blind providers

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Q7 What are total requirements to bring
Aboriginal housing to Canadian standards?

• We are still developing cost estimates
• Contributions come from the federal government,
  provincial and territorial governments, and
  aboriginal people
• Canadian standard will be improving as well
• New households are being formed in Aboriginal
  communities

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Population (2001)
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Provincial Populations
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Households on Reserve (2001)
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On-reserve Standards
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Non-reserve Aboriginal Households
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Northern Aboriginal Households
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Donner Group

• Arthur DonnerAdvisor to Minister
  Fontanaadonner_at_ca.inter.net416-483-5131
• Mike McCrackenResearchMccracken_at_informetrica.com
  613-238-4831 x2223

• Malcolm BernardCommunicationsmalcolm_at_strategy21.
  ca613-598-4651
• Marion LefebvreStrategyrawson_at_istar.ca613-236-7
  960