If you want to start a housing co-op, we have great news — the new Co-op Housing Development Program (CHDP) has $1.5 billion to expand co-op housing in Canada. Launched by the Canadian Mortgage and Housing Corporation (CMHC), this program is the most significant investment in co-op housing since the 1980s.  For a primer on the program, check out our blog post.

Designed for middle-class families, the program is unique among the supports in the federal government’s National Housing Strategy. This is part of the government’s much-needed push to create more housing in Canada, and we’re glad to see them recognize housing co-ops as an important part of the solution.  The program runs until 2028, and CMHC will accept applications at least twice per year until all the funds are distributed. The program’s first application period is July 15th to September 30th, 2024.  

To qualify, housing co-ops will have to meet these primary goals:  

  • Affordability 
  • Energy efficiency 
  • Accessibility 

 If you want to start a housing co-op and think your project might be a fit for the program, here are a few more things to note before starting your application:   

Make sure you qualify  

The program is a competitive process. CMHC will use a scorecard to evaluate projects to assess their quality and ensure they align with the National Housing Strategy’s priorities.   

Your application will be assessed on the following factors:  

  1. Financial viability: The co-op should demonstrate that it can repay the loan it receives from CMHC, based on projected costs and the rent it can charge. It helps to show you will have additional sources of funding (e.g., donations, member contributions) and won’t rely entirely on the forgivable loan.  
  2. Project costs: CMHC prioritizes projects that cost less than $400,000 per unit. The higher the cost per unit, the lower your score.  
  3. Project scale: The goal of this program is to get housing units built. Urban projects must build at least 75 units, and small to medium-sized communities need to build at least 30 units. Rural, remote, and Indigenous communities need to build at least five units. The more units you will build, the better your score.  
  4. Shovel-readiness: How soon can you begin construction? The sooner the better.  
  5. Energy Efficiency: Projects need to meet the National Energy Code of Canada for Buildings (NECB) or the National Building Code of Canada 2020. The more energy efficient, the better.  
  6. Indigenous, rural, northern, or remote: Extra points are awarded if you’re located in one of these regions.  
  7. Priority groups: Does your project support priority groups or vulnerable populations? Ideally, 20% or more of the units will meet the needs of priority groups (e.g., youth, 2SLGBTQIA+).  
  8. Indigenous-led: Indigenous-led projects will receive extra points. 
  9. Support for women and their children: Projects that dedicate a percentage of their units to women and children receive higher points. 
  10. Affordability: Is your project affordable? What percentage of your units will be at or below 110% of the median market rent of post-2000 builds in your region? 

To help you with this process, CMHC provides a viability assessment workbook that you can download – you’ll find it under the “pre-application resources” tab here.  

Have your land in place — or a plan to get there  

Being shovel-ready, or close to it, is critical for this program. That means you should already own the land you intend to build on or have a plan in place to secure that land. But how can you buy the land before the project is approved? Here are some options for securing your co-op’s land that meet the project’s requirements:   

  • Identify the land you want and enter into a purchase and sale agreement with the seller that’s conditional on CMHC project approval.  
  • If land is being donated to the project, provide a copy of the land donation forms. It never hurts to ask your municipality if they can support the project. 
  • If you’re leasing land, provide a copy of the lease agreement. The lease agreement must be at least five years longer than the project’s loan.  
  • If a local developer wants to support the project, your co-op could enter into a turnkey agreement to purchase a developed property from a developer who leads the construction. Funds would not be released until the co-op takes possession, so the developer would need to shoulder construction costs. 

It’s also important to start talking with your municipal government as soon as possible. To apply for the program, you’ll need to provide the appropriate zoning documents that permit project construction. In some municipalities this can be a longer process, so start those conversations as soon as you can.   

Get close to being shovel-ready  

The program is designed to help housing co-ops start projects from scratch. That means any consulting or legal fees you incur starting the co-op are included with things like construction costs and can be paid retroactively. However, you’ll still need to put in a lot of work before you can apply.   

CMHC provides a helpful document checklist that outlines the items you’ll need to submit in your application. To secure some of these plans and certificates, you’ll need to get the project close to being shovel-ready. To do this, try and find service providers and project managers that can work with your timeline and are willing to provide some in-kind supports or delay payment. Also, consult local government and support organizations to try and find extra financial contributions to help accelerate your progress.   

Get some guidance  

At Co-operatives First, we help de-mystify the process of starting a co-op. We can get your housing co-op incorporated, give you guidance on your early planning, and help you navigate the process of getting shovel-ready. Plus, our support is provided in-kind, and you can include our support as an in-kind, non-CHDP source of funding in your project budget. Get in touch with our team of experts to take the first steps.