We are pleased to announce our recent partnership with Tapestry Community Capital.

Tiny Town Association and Tapestry Community Capital partner to boost affordable housing financing

Ever looked into where your investments are going and ended up feeling a bit disheartened? Too many traditional investments funnel your money into harmful industries like fossil fuels, deforestation, and weapons. 

What if you could invest directly into affordable, sustainable housing for your neighbours and earn healthy returns at the same time? 

At Tiny Town Association, we’re excited to soon offer an opportunity to do just that. We’re partnering with Tapestry Community Capital, an organization supporting non-profits and community groups in raising investment for their crucial work. 

More details about how you can invest in Tiny Town projects (like our proposed 82-home community in Elliot Lake) are to come in the next few months. But first, what is a community bond? And how can community bond investments support affordable housing in Canada?

Scaling up affordable housing in Canada

There’s no doubt about it — Canadians are facing a housing crisis. 

People living on minimum wage or fixed income can’t afford to rent a one-bedroom apartment in most major cities. And the Canadian Mortgage and Housing Corporation estimates we’ll need around 3.5 million new housing units by 2030 to restore affordability. Canada has the lowest number of available housing units per 1,000 people of all the G7 countries. 

Non-profit affordable housing providers (like the Tiny Town Association!) have scalable, sustainable solutions. But to bring those solutions to communities, they need flexible financing solutions tailored to their terms and timelines. 

Traditional lenders often base loans on a property’s anticipated income. When rents are adjusted below market value, resulting in decreased net income, lenders become hesitant to provide the required funding, creating a funding gap. This challenge is compounded for Canadian non-profit housing providers who cannot take on equity investment. Consequently, these organizations often navigate a complex web of multiple — sometimes over a dozen — financing sources, each with its own set of rules and requirements. It can be a major challenge to align their projects’ milestones and cash flow needs with their financing.

The solution: community bonds

Tapestry Community Capital offers a solution by supporting non-profit organizations in unlocking private capital through a social finance tool — the community bond. Unlike traditional bonds, community bonds not only provide a financial return but also offer investors a social or environmental return. 

Community bonds are available to both institutional and retail investors, meaning even individuals with small amounts of available capital can support affordable housing (and other social purpose projects) right in their neighbourhood — helping to house the people who work in their local shops, supporting their disabled and elderly neighbours, and making a serious contribution to the effort to end homelessness in their community. 

To date, Tapestry has supported qualified issuers in raising over $120 million in community investment from more than 4,000 community investors. This capital has been deployed by our partners to develop a range of essential community assets, including those in renewable energy, arts & culture, education, and affordable housing.

Benefits of community bonds

From financial capital to social capital, community bonds offer many benefits, including: 

• An increased pool of capital — community bonds create a new avenue for accessing private capital, addressing the funding gap for non-profit housing providers.
• Flexibility and efficiency — with community bonds, issuers define bond terms that suit their project, making financing more predictable and efficient. 
• Funding catalyzation — a sold-out community bond raise illustrates community backing, enhancing the likelihood of securing other funding sources, including mortgage loans.
• Increased community support — community bonds foster meaningful community engagement and allow community members to financially benefit from affordable housing developments.
• Scalability and sustainability — more than 70% of community bond investors choose to reinvest their returns, creating a pool of capital for future projects. 

Tapestry’s work in affordable housing

Currently, Tapestry supports eight diverse affordable housing providers in unlocking capital using community bonds. Explore some of their stories here.

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