Indwell launches community bonds program to build affordable housing in Hamilton
The locally based charity is hoping to raise $5 million in capital funding over the next 12 months, with some help from community members
A new community loans program will give Hamiltonians the chance to help get deeply affordable housing built in the city.
Supportive housing provider Indwell recently launched its Hope and Homes Hamilton Bond program, which aims to raise $5 million in capital funding for at least three different housing projects over the next year.
Hope and Homes will allow individuals and organizations to help finance supportive housing built by the charity by making investments in the bond program.
It offers five different tiers of investment — starting at a minimum of $1,000 — with no limits on the size of the investment.
Each tier has varying features, whether that be interest rates, term limits or investment minimums.
For example, Bond Series A requires a minimum $1,000 investment and has a three-year term, which will see 3.5 per cent interest paid out annually. Meanwhile, Bond Series E requires a minimum $50,000 and has a five-year term, which will see 5 per cent interest paid out annually.
Chris Finkbiner, chief operating officer of Indwell, told The Spectator that the program is a “new opportunity” for the organization to take a different approach to getting housing projects “shovel-ready.”
Finkbiner said capital funding covers costs such as site acquisition, site remediation and prep, building and site design as well as development charges and permit fees — with those items adding up to several million dollars before construction even begins.
Without that capital, the organization is unable to access grants and financing from the government, Canadian Mortgage and Housing Corp. (CMHC) and other lenders.
“That’s the most difficult capital to raise,” said Finkbiner. “This gets us to the point where we can get our traditional granters and government lenders into the project.”
Finkbiner noted the organization has used various capital sources in the past, which include loans from family and community foundations, private loans and donations.
However, Finkbiner said the community bonds model — which will be managed by Tapestry Capital — is more “cost-effective” than market alternatives and offers the organization flexibility as well as cost certainty with baked-in interest rates.
Finkbiner said the financing model allows the funds to be used for multiple sites as well as a wide range of development costs, as there are no stipulations attached. He noted that with the interest rates also locked in over the term of the bond, the organization can budget for the cost of the financing and “have cost certainty on that debt.”
The initial run of the program will be raising capital funding for a handful of housing projects, which are slated to create more than 100 units targeted at families, aging people and Indigenous folks in the community.
That includes the adaptive reuse of the Wentworth Baptist Church site (50 units) as well as the second phases of both The Ottawa Street
Apartments (32 units) and The Oaks, which will be known as Acorn Flats, on Robert Street (23 units).
The Hamilton-based charity currently houses close to 1,200 tenants across the province — with more than 570 of those folks living in Steeltown.
Indwell isn’t new to borrowing money from its supporters in a “grassroots manner,” noted Finkbiner, pointing to their existing Impact Loan Program, which accepts loans starting at $50,000.
However, Finkbiner said the community bonds program is “more accessible,” as the starting investment is much lower.
“We wanted to make it accessible for almost everyone to take part,” said Finkbiner. “We see the urgent homelessness crisis all around us and we know people want to make a difference.”
As of January, city data showed that approximately 1,590 people were homeless.
Finkbiner said since launching the program in late March, the organization has attracted more than $600,000 in stated interest — and those funds could start rolling in the coming weeks.
When the term on each of the bonds ends, investors can either be paid out their principal investment — much like a guaranteed investment certificate — or have it reinvested for another term. Interest will also be paid out yearly for the length of their term.
“There is demand for people to use their investments in a way that they know is going toward things that align with their values,” he said. “People see the need and want to participate in the solution.”
And with their investment, people will get to take part in “tangible, visible solution” for the homelessness crisis that their dollars helped make happen, while earning a return on their investment, said Finkbiner.
“It’s a win for Indwell (and) a win for the community,” he added.
For more information, visit indwell.ca/hope-and-homes-hamilton-community-bonds or email invest@indwell.ca.