Affordable Homeownership Models: Shared Equity Mortgages, Partnerships, and Community Land Trusts

Written by Kyla Tanner

August 12, 2020

The Canadian Housing and Renewal Association (CHRA) hosted a webinar in July on Affordable Homeownership Models. While affordable housing is commonly thought of as rental housing, the three guest speakers discussed affordable homeownership and community ownership of land. They presented on three different models: shared equity mortgages, partnerships, and community land trusts. This blog post will provide a brief overview of their messages. The full webinar recording is available here.

Shared Equity Mortgages

Jeff Evenson discussed how Options for Homes has used a shared equity mortgage model to build more than 3,300 condominium units for moderate-income homeowners over the past 25 years in the Greater Toronto Area. Options for Homes is the largest developer of affordable homeownership units in Canada. An additional 2,000 units are currently in its pipeline.

Options for Homes develops units and offers a down payment loan that is payment-free until the homeowner sells. This acts as a second mortgage on title. The down payment is 10% to 15% of the purchase price of the home, dependent on construction costs. The down payment helps to secure a conventional mortgage and lowers the monthly carrying costs – making it affordable for the homeowner. When the homeowner wants to sell, the loan is paid back with appreciation that matches the percentage of the down payment received (the 10% to 15%).

Below, Figure 1 demonstrates how the Options for Homes loan can help reduce the necessary household income (HHI) needed to buy a home that is $300,000. In the third column, “additional help” could come from the CMHC First-Time Home Buyer Initiative.

Figure 1

Through its model, Options for Homes is the developer (similar to Cahdco). They acquire the land and hire the necessary consultants to build the buildings. Separately, there is the Home Ownership Alternatives, which acts as the “keeper of the fund”. The fund has grown to nearly $100 million since its inception. When the second mortgages are paid back with appreciation this is added to the fund, contributing to its growth. Additionally, Options for Homes looks to governments and the private sector for investment. It is a self-sustaining and permanent revolving fund that represents “social equity”. The fund is used to purchase land and build new projects.

Figure 2

The Options for Homes’ loan is available to first-time homeowners. The only requirements are that the buyer has a minimum 5% down payment, qualifies and secures a mortgage from a primary lender (Options for Homes has relationships with financial institutions who work with buyers), and will live in the Options for Homes’ unit.


Alex Miller, of Big Block Construction, presented on principles of how to solve affordable housing need by building homeownership units. He highlighted the need for strong team members, an effective process, and established partnerships.

Miller used a personal example that Big Block Construction was a part of in Saskatoon. In 2008, Saskatoon was in a housing crisis where 2,500 affordable homes were needed. The city identified the need and provided funding in partnership with CMHC by way of a mortgage flexibility support program. Non-profits then administered the program. Developers, such as Big Block Construction, were brought in to design and build the projects. More than 2,500 affordable homes were created from the initiative. Miller highlighted the importance that each stakeholder involved in the process focused on their area of expertise.

Similar to Cahdco’s own process, Miller explained that analysis is key to the project. You must first understand the need, demand, budget, equity sources, funding programs, financing, and the pro forma to answer the questions: “Is it bankable?” and “Does it pencil out?”. He cautions not to get hung up on a rendering or what it might look like in this early phase. You can only move on to design once the business plan has been proven.

Community Land Trusts

Tiffany Duzita, from Community Land Trust, shifted the focus of affordable homeownership by individuals to discuss community ownership of land and buildings. She defined community land trusts (CLT) as non-profit organizations that have a goal to control, obtain, steward and hold land to solve problems the pure markets often struggle with. The benefits of community ownership are that it builds permanent community wealth, is mission driven (versus profit), builds community resilience, involves the community, and preserves land because more land is not being created.

The Co-operative Housing Federation of BC, has been a leader in bringing together social enterprises and creating CLTs. Duzita highlighted that Canadian CLTs are more sector based, born from the co-operative housing sector, compared to those in the United States that are often grassroots organizations. As a sector-based organization, Community Land Trust develops and redevelops housing. Today, Community Land Trust has more than 2,600 homes. Approximately 75% of the portfolio is co-op housing and 25% is non-profit housing.

Figure 3

Since the early 1990s, Community Land Trust has grown and evolved into real estate development and portfolio management. It has created multiple societies that each have their own function to support the portfolio and partner investments.

Figure 4

Community Land Trust sees the land trust model as a success because it offers housing at a fair price, provides secure tenure, builds communities, and is a strong partner and community advocate for government dollars and land.


Each of these are models that could be replicated across the country. Cahdco is currently investigating ways to develop affordable homeownership units and provide shared equity mortgages, similar to Options for Homes. Municipalities beyond Saskatoon could partner with CMHC, non-profits, and developers to build affordable homeownership units to respond to their housing need. And more community land trusts are being created across the country, including work that is underway to determine if it feasible to create one here in Ottawa. While much affordable housing work is done on rental housing, exploring homeownership and community ownership is also a key piece of housing affordability.

Kyla Tanner

Project Manager

August 12, 2020