Canada’s housing market is in crisis. According to a 2023 report by the Canada Mortgage and Housing Corporation, as many as 3.5 million units must be built to bring the country back into a level of affordability not seen since 2004.
Compare that to the scant 247,830 new homes being built annually, and it becomes easy to see why one in 10 Canadians report that they have experienced homelessness at some point in their lives.
Persistent housing unaffordability comes with a host of well-documented knock-on effects: adverse impacts on mental and physical health, the erosion of the social fabric that sustains our communities, and, of course, an unprecedented spike in people experiencing homelessness.
The housing market also contributes to the climate emergency: Canada’s residential sector contributes 12.6% of the nation’s greenhouse gas emissions, clocking in at 1.8 tonnes of CO2 per capita—the second-highest in the world, according to the RBC Climate Institute.
With unaffordability at its peak, innovative solutions are needed
The need for climate-conscious, affordable housing—and a lot of it—is self-evident. The good news is that for investors hoping to contribute to solutions while maintaining attractive returns, there are many exciting opportunities through impact real estate investing.
To help curious investors learn about impact real estate investing, we recently hosted a webinar with our Chief Sustainability Officer Mike Thiessen, as well as Andy Broderick, Managing Director at New Market Funds, and Good Investing founder Tim Nash. Check it out for a deep dive into the world of impact investing—but read on for a detailed overview of what we covered.
Impact real estate investing is vital to the affordability crisis
Impact real estate investing allows values-driven investors to reap returns from real estate projects while generating transformative, positive social and environmental outcomes.
Private capital is needed to address the housing shortage, and many firms are focused on alleviating the crisis. Genus offers exposure to many of the most promising through an array of High Impact Funds.
The first of these is the High Impact Equity Fund, a liquid public equity vehicle focused on making the greatest positive impact possible while maintaining financial goals. The fund has delivered an annualized return of 14.64 percent, outpacing the MSCI World Index benchmark of 12.92% during the period of March 31, 2009 to March 31, 2024.
One highlight of the fund is its stake in Alexandria Real Estate, a firm committed to building environmentally friendly buildings for the health care sector, with 88 properties LEED certified or pursuing LEED certifications.
The Global Impact Bond Fund is a liquid fixed-income fund composed of green bonds, sustainable bonds, and social bonds. In order for Genus to invest, each of these is certified by a third-party to verify their specific impact areas..
One of the green bonds in the fund is for an energy-efficient project for the Nordelec building, an 830,000-square-foot mixed-use property owned by Allied Properties in Montreal. The project has avoided potential emissions of 1,300 tonnes of CO2 equivalent, comparable to 400 fewer cars on the road, according to data from AlphaFixe and Allied Properties.
Meanwhile, our Impact Investment Council develops custom portfolios based on the types of impact individual investors are passionate about, whether that’s green buildings, affordable housing or sustainability efforts.
One example of a fund our Impact Investment Council is invested in is New Market Funds, a multi-fund manager founded in 2013 which partners with housing trusts across Canada to help access capital for affordable, low-carbon rental housing. The fund has 2,507 units in construction, in permitting, or in the feasibility stage, with 850 units fully financed. It’s truly an inspiring organization, and for more information, make sure to check out our recent webinar, in which Tim Broderick dives deep into the organization and its impact.
With impact real estate investing, we can build a better future—together
The real estate impact investing sector is getting more exciting all the time, with new opportunities coming online regularly. So where should interested investors start?
An excellent first step is talking to our impact investing experts, but it’s far from your only option. In the webinar, Tim provided a running list of impact investments accessible to anyone across the country.
With the affordability and climate crises affecting a growing number of Canadians, it’s a good idea to consider real estate impact investing as one small piece of a diverse, global solution.
Want to learn more about how to get started in impact real estate investing? Get started today with our digital and personal wealth management services.
References:
- Housing shortages in Canada. (n.d.). CANADA MORTGAGE AND HOUSING CORPORATION. Retrieved October 1, 2024, from https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-research/research-reports/2023/housing-shortages-canada-updating-how-much-we-need-by-2030-en.pdf?rev=3b66f87d-0bec-44d6-aa54-f8af71f9b2c4&_gl=1*1hk9x6k*_gcl_au*NzgxMDMyNjAwLjE3MTU4OTAwOTI.*_ga*NDA3NzM1MzMyLjE3MTU4OTAwOTM.*_ga_CY7T7RT5C4*MTcxOTQyNzY5My45LjEuMTcxOTQyNzczNS4xOC4wLjA.
- Monthly housing starts and other construction data tables. (n.d.). CMHC. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-data/data-tables/housing-market-data/monthly-housing-starts-construction-data-tables
- Government of Canada, Statistics Canada. (2023, December 6). Homelessness: How does it happen? Statistics Canada. https://www.statcan.gc.ca/o1/en/plus/5170-homelessness-how-does-it-happen
- Grewal, A., Hepburn, K. J., Lear, S. A., Adshade, M., & Card, K. G. (2024). The impact of housing prices on residents’ health: a systematic review. BMC Public Health, 24(1). https://doi.org/10.1186/s12889-024-18360-w
- Vancouver-area homeless numbers show sharpest spike between counts since survey began. (2023, October 5). CBC. https://www.cbc.ca/news/canada/british-columbia/greater-vancouver-homeless-count-2023-1.6987718
- Climate Policies and Actions on the Building Sector – RBC. (n.d.). https://www.rbc.com/climate-action-institute/climate-action-24/buildings.html
