The end of mortgage issue.
Housing Services Act (HSA) co-ops across the province are near the end of their mortgages. This would seem like a good thing. But an outdated funding formula means that this could put the co-op – and the low-income residents who live there – in a worse position.
The current formula means that without mortgage costs, a co-op may fall into a “negative operating subsidy" position and lose crucial government assistance that covers the cost of rental assistance and property tax. This will leave co-ops with not enough money to repair their homes putting the entire co-op at risk. It may also lead to a loss assistance for low-income households.
The cost of doing nothing.
While it was possible to fund basic maintenance and repairs under the current formula, buildings that are over 30 years old require costly renovations to remain in operation. Not changing the funding formula will put at risk tens of thousands of affordable co-op and non-profit homes across Ontario.
Fix the formula.
Under a new funding formula, when an HSA co-op reaches end of mortgage, rental assistance and property tax support would continue but operating subsidy would not. This would allow co-ops to use mortgage savings to help fund crucial investments in capital repairs. We are calling on the Ontario government to fix the formula in the new service agreement regulation to address the end of mortgage issue.
Ensuring we fix the formula is key to the sustainability of our HSA co-ops – and the security of the low and moderate-income households who live there. The future of these affordable, good-quality homes depends on this.