By Christopher Seepe

Recently, my partner and I invested just under $1 million to purchase a beautiful ranch-style bungalow that we converted into long-term affordable “home share” housing for seniors in Peterborough, Ont. The project has struggled and could possibly fail because of many surprisingly unlikely entities that contributed significantly to making the project unaffordable.



Statistics Canada’s 2016 Census Profile reported that more than one-third (36.3 per cent) of Peterborough’s population is over the age of 55.

Our rent is $950 to $1,095 for a private bedroom and shared common areas. Every amenity needed in a home plus housekeeping services are included. Retirement homes, while offering more services, average $6,000 per month. Our tenants pay the property’s operational expenses, which means their rent can decrease when they employ best practices for utilities consumption. I’m unaware of any other Canadian landlord who offers such a self-sustaining opportunity.

Eight building insurance providers wouldn’t insure it because it’s seniors co-living. Four companies quoted a premium three times higher than when the property was insured as student housing. The lowest quote was twice the original premium.

Every mainstream lender refused to provide financing because shared living among seniors was too risky. One bank vice-president told me most banks don’t provide financing for any type of affordable housing.

Private lenders demanded four times higher interest than mainstream residential mortgage rates.

Three times we contacted the Peterborough mayor’s office to ask for assistance in spreading the word. No reply, despite Mayor Diane Therien’s 2019 10-point plan to build 2,000 affordable housing units by summer 2021. Peterborough Housing reported that the current waitlist for subsidized housing is nine to 12 years.

Two CMHC program managers who oversee programs to foster thinking-outside-the-box innovative affordable housing solutions said our solution didn’t fit within their (inside-the-box) program guidelines.

We contacted many local and regional housing agencies: YMCA, YWCA, Red Cross, Salvation Army, several places of worship, municipal housing, Canadian Mental Health, Brain Injury Association, Trent Centre for Aging & Society, Activity Haven for seniors, Peterborough Sport and Wellness Centre for seniors and a slew of other agencies. None offered to promote our housing availability to their constituents. Three said they can’t work with “for-profit” entities. The government agencies wouldn’t allow even paid advertising to spread the word.

One bright light shone from two ladies from Age-friendly Peterborough, who actively embraced the project and referred applicants to us. Our one monthly classified print ad yielded many more seniors responses than all our online initiatives.

Infrastructure Canada reported there were 252,450 total social and affordable housing units in 2016. Statistics Canada’s 2017 Dwellings in Canada reported that 6,529,445 (46.4 per cent) occupied private dwellings in Canada were rental units out of a total 14,072,080. The private sector therefore has built 26 times more housing than the government. With the largest debt in Canadian history and multi-billion dollar debt-relief programs, government won’t be building more housing anytime soon.

Many of our applicants didn’t want “affordable” housing. They wanted to age-in-place with dignity and comfort in an all-inclusive downtown rental unit close to all amenities and pay rent equal to what the government support programs provide – perhaps $750/month. They effectively wanted free housing, and the agencies looking to house them are looking for the same thing.

The annual operational costs of our property is roughly $40,000 before tenant best-practices. Divided by eight tenants = $415/month. Conventional 70 per cent loan-to-value financing, 25-year amortization, with four-per-cent interest is about $390/tenant/month. That $805 doesn’t include capital costs or a return on investment for providing the “affordable” housing. Ten tenants make the property a highly attractive investment.

Many pundits and government spokespeople say residential owner-occupied and investment housing prices will drop. Not a chance. Housing prices and rents will continue to rise despite mortgage defaults and rising unemployment because:

  • No reduction in property taxes and development charges
  • Three to five-year approval times
  • Hefty fees-in-lieu of park lands
  • Costly government-mandated plans, studies, red tape
  • Brutal anti-landlord tenancy legislation
  • Unjust landlord-targeted municipal bylaws
  • Policies like the landlord responsibility to “accommodate to the point of undue hardship”
  • Failed Landlord and Tenant Board, multi-year backlog of applications
  • Nine to 12-month rent-free evictions backlog costing arguably a half-billion dollars in lost rental income
  • Government licensing fees for housing
  • Double-digit increases in construction labour costs and materials, especially glass, concrete and steel
  • A critical shortage and decreasing number of construction labourers
  • A flood of investors wanting real estate hard assets versus volatile and unstable stocks
  • Low bank and bond ROI rates, decreasing dividend-paying stocks
  • Media and government hype for self-serving reasons that promote tenant-landlord tensions
  • Rapid increase in people working from home increasing infrastructure and municipal services costs
  • Overarching demand that far outpaces supply
  • Decades of government failures to encourage housing construction
  • Determined homeowner wannabees placing multiple offers

Countries like China and India, which have suffered housing shortages for decades, have long included home share, co-living, rooming houses, roommates and other forms of shared housing in their standard housing options.

Until the government properly incentivizes the private sector, which is the ONLY group that can solve the housing crisis, and the government cleans up their own “house,” affordable housing in urban and suburban centres will be a fleeting dream for an ever-increasing majority of people.

20 COMMENTS

  1. I’m not sure why you think my vision includes houses being built by governments or otherwise. Our program is the exact opposite of that……we find places to live from the current rental stock or we have investors who will purchase a house that is already built and then rent it to us. Landlords are happy to have us as tenants because we take care of our homes, we pay on time and we want long-term housing so they avoid frequent turnover. In fact both landlords and investors are lined up to work with us. One investor purchased a house for a homemate group and had no difficulty whatsoever getting a mortgage. Bylaws pretty much everywhere allow unrelated people to live together in rental housing.

    You are wrong to assume I think ROI is a dirty word but you are correct that I believe housing is a human right…..but not regardless of the cost. As I said, our homemate groups are not expecting to have any more luxury together than they do living alone because luxuries usually cost more than we can afford. However, when we rent a place together, each of us does save money and we can get more space, like a back yard, than when we live alone. So cost is always a factor and always will be. I’ve never had to clarify this with the investors I’ve talked and worked with…….they already know that we are working toward a win-win situation.

    You say you are giving up partly because of people like me and because your model is not a good investment. However, our model does work. In 2019, the real estate investor that I work with identified a strong ROI, targeted at 20%+ pre year and 100% + over 5 years. Other investors she works with are waiting for our homemate groups to form so that they can get involved.

    In any case, we could argue forever about all of this, which would be pointless. I will leave the conversation now, wishing you only good adventures going forward.

  2. I represent a shared-housing collective of over 1800 low to moderate income senior women living in Ontario. We read about your shared-living house in Peterborough, initially with interest, and then with sadness and disapointment. You stated, “Many of our applicants didn’t want “affordable” housing ……they effectively want free housing.” This way of thinking is, in my opinion, exactly why your project will fail. Based on your Peterborough model, you really don’t understand seniors. We don’t need housekeeping, we can do that ourselves. We don’t need someone to decide what activities we will engage in, we can do that ourselves. However, we definitley do need to choose who we will live with and to determine for ourselves what our house rules will be (neither of which is available with your option). And yes, of course, we want it to be affordable. And it definitely can be affordable,…..my homemate group and the 7 other success stories so far from within the larger group are living examples. When 2, 3, 4 or more senior women live together in rental units of their choice, making their own rules with everyone helping do the chores, our individual rents can be as low as $600 per month. If you truly want to help seniors find affordable housing and still make a profit, partner with us instead of deciding for us.

    • Yes, Pat Dunn’s group was definitely one of the housing collectives who didn’t want to introduce our project to their 1,800 women who are still looking for affordable housing despite the desperate shortage. They took the decision as to how much rent should be paid out of the hands of the collective and decided themselves what that rent should be. This group also doesn’t represent men seniors who are in the same dire situation, which begs other questions.

      They knew that this was a pilot, which by its nature, is intended to be changed based on the responses from the market, but they didn’t discuss it. They criticized it and decided not to tell anyone in their collective about it and allow their members to decide for themselves what the merits of the pilot are and aren’t. They dismissed the fact that a private-sector landlord willingly risked $1 million of their own money without government involvement, assistance or any kind of other agency support to try to make a difference. They made zero-effort to appreciate the risk and embrace the opportunity to see what could be worked into a win:win opportunity.

      The project’s included services were optional but they ignored that point. House rules were a default set that could be changed by a majority of the tenants, which point was also ignored.

      They never discussed the costs of providing affordable housing or demonstrated any knowledge of what those costs are. Having bought, financed and operated many rental properties, and taught hundreds of other landlords how to do the same for over a decade, I have intimate knowledge of what it costs to purchase and operate residential rental housing, especially in working class (not upscale) geographic markets. Regardless of who builds affordable housing, whether a government-funded agency, mega-corporation or a private individual, the costs are the same, subject to economies of scale.

      I find it very hard to accept that Pat Dunn’s seven projects priced “as low as $600/month” is a fair comparison to our 3,200 sq ft, 1.5-storey ranch home with 8 furnished bedrooms, 4 bathrooms, two kitchens, 2 furnished living/dining rooms, 500 sq ft garage (that we were going to convert into 2 more BR + 1 bath), 2 stoves, 4 refrigerators, 2 clothes washers, 2 clothes dryers, 2 dishwashers, 2 gas fire places, 2 large screen TVs, various countertop appliances, 5 lower-level fire escapes (costly to build), all cookware-utensils-dishware, air-conditioned, gas heat, central vacuum, two driveways with up to 10 parking spaces, large fenced-in backyard with deck, 3 standup planters and other sundry benefits.

      They never asked about the one-time $70,100 cost to find and acquire the property including Land Transfer Tax (LTT), CMHC premium + PST, CMHC application fee, insurance consultant, Phase 1 Environmental, CMHC-lender inspection fee, lender’s legal fees, buyer’s legal fees, mortgage commission (1%), real estate commission (4%), buyer’s building inspection, title insurance, incorporation fee. Recovering those costs over, say, a 10-year period is about $584/month.

      They never discussed the $33,000/year financing (mortgage) costs, and ours was with only a 60% loan-to-value, which makes the loan costs much lower than a typical investment property. That estimates to about $2,750/month. Even if it was fully paid for, that would be there’s an opportunity cost because the equity in the property is not “working” for the investor—even if it was a publicly-owned property. That means the taxpayer’s money is not being properly utilized and managed.

      It likely wouldn’t even occur to them that there are capital expenses like a replacement roof, furnace, etc. that need to be paid for several times over the life of a property. Many public housing projects have no budget for capital costs, which is why they universally around devolve over 30 years into slums. We factored a reserve of $3,000/year or $250/month.

      The property described above costs about $40,000/year to run or $3,334/month. This includes gas, electricity, sewer, water, repairs, maintenance, property tax (the single largest operating expense), driveway snow plowing (are most senior women going to do that?), building insurance, etc. The operational expense ratio is about 40% of gross income, which is very consistent with most multi-unit rental properties.

      So a quick “sanity” check: $584 + $2,750 +$250 + $3,334 = $6,918 before the investor makes a penny, and before 50%!! corporate tax (passive income).

      Pat’s $600/month rent per tenant times 8 tenants so as to do a comparison with our pilot = $4,800 monthly rent. WHERE’S THE OTHER $2,118 COMING FROM?

      Now, add in the devastating rent control that tenants think is helping them, at an average of 1% rent increase per year. Sure landlords may absorb the electricity cost of an annual average of 10%, water at 8%, natural gas at maybe 4%, building insurance average 14%, and all the other annual costs to just operate and maintain a property. Eventually, there’s no money to maintain the property so the tenant’s housing degrades. Despite tenant’s “thinking” rent control is good for them, they have no clue to the tremendous negative consequences it wreaks upon tenants and the municipality, but that’s a different story not pertinent to this response.

      If government builds these properties, where is the money coming from? Yes, property taxes! How much does a tenant paying $600/month contribute to property taxes? If the municipality is losing $2,118 per month from every 8-unit property they rent to tenants who think they should only pay $600/month rent, where is the shortfall coming from. That’s right—the municipality has to raise property taxes to cover the shortage. Wait!! That means that the affordable housing costs has gone up making it even less affordable than before. It’s a vicious paradox.

      And tenants pay the property taxes despite their mistaken belief otherwise.

      By its very nature, the word “affordable” encompasses things financial. Affordability MUST be self-sustaining over the long term and it must also be affordable to the entities who build them, whether public or private. Representatives of tenant groups, untutored politicians and uninformed media who collectively pull “needed” rent rates out of their … hat … have no clue what they’re talking about. If they did, the affordable housing crisis would have been resolved long ago.

      This project will likely fail, not because it included some services or had preset house rules, but strictly and solely because it is financially untenable at the rent rates that tenant groups and representatives like Pat Dunn would “like” to pay, giving no thought or consideration to what it actually costs to provide housing. No one who has the money to build housing will build them and none of 22 mentioned banks and lenders will finance them.

      Until Pat Dunn (and people in roles like her) can speak intelligently and realistically about numbers she will have very limited success, if any, in finding affordable housing for the 1,800 seniors women.

      • You are absolutely wrong, Chris, about a number of things. In fact, I did share your Peterborough house information with my membership and asked them what they thought about it. I did not tell them what to think about it, they decided for themselves. No one was interested, mainly because they would not be able to choose who they would live with. And secondly because it was too expensive for them since most are low-income seniors who can only afford a maximum of $800 per month.

        I don’t decide for my members what they should pay or set any kind of price. The homemate groups find their own rental units together and decide together how much each will pay.

        We don’t need dishwashers, large screen TVs, gas fireplaces. We don’t need cookware or furniture; we have our own.

        Most of those who have been successful so far are living in houses already in the rental market, that they found through the usual channels. The rent for the house I live in with my homemates is $2350 per month split 3 ways. No, it’s not luxurious, but we know we can’t afford luxuries. We have furnished it collectively with the things we already had. We now have social support and help just an arms-length away as we age.

        But most importantly, we have maintained our independance and decision-making autonomy, which is paramount to most seniors, as evidenced by the 1800+ women in our collective.

        As to our success going forward, we have opened a non-profit corporation and are building a website which will better serve our current membership, plus be able to serve all of the 390,000 senior women living alone in Ontario (114,000 of them living in poverty.) We are working with exceptional consultants to help us build a business model that will be sustainable and scalable. We are networking with other housing organizations in order to find common ground and work together toward truly affordable housing options. We are partnering with home investors who will purchase houses of our choice and then become our landlords because it definitely is a reality that for-profit organizations can win at this.

        Truly affordable housing options are out there, without the need for governments to build more social housing. And more options can be found when we think outside the box and respectfully work together.

        • It’s too bad you didn’t try to reach out and work with us rather than criticize and discourage the process and initiative. Nothing we did was cast in stone and everything could be changed. As I said before, this was a pilot, subject to change. This particular home was already constructed and equipped with what was described. There are many seniors (not just women) who can afford $950/month for a higher quality of life than the one you and your immediate co-tenants had to accept. Future projects could have embraced a more basic design and function.
          Perhaps you’ll find people with the means and resources (but don’t expect any government agency will have either of those any time soon) to embrace your vision but, after more than a year of contacting a great many individuals and organizations in co-living, homeshare, affordable housing, public agencies and government, I’m still unaware of any investors and lenders lining up to build any kind of affordable housing, especially the kind you envision. You went to great lengths in your two replies here about what you want but you failed to address what would encourage people with rental properties to provide what you’re looking for.
          I can write with absolute certainty here that even those who might contemplate providing what you want will not be financed by any of the 22 lenders, including without exception all the mainstream lenders and the “big six.” Arguably 85% to 90% of all real properties are financed so … no lenders, no properties.
          I don’t see how your “model” will encourage anyone to risk their savings to invest in housing that offers little to no return on investment. I suspect that ROI is a dirty word to you and that you believe every person has an inalienable right to housing, regardless of the cost but that’s a naïve philosophy. I started to expand on this point because it sounds mercenary or perhaps morally-corrupt but I abandoned the effort because I don’t have the time or inclination so I’ll leave it to the reader to decide what I meant by that.
          I don’t think those with the means and resources to make meaningful change will be too encouraged by what they read in this open forum. While you have your 1,800 needy members, I have about 4,000 potential solution providers on my mailing list who were following this project. If we had developed some kind of mutually beneficial model, there would have been a lot more people ready to follow my lead. My lead now is to abandon seniors housing and invest in something else. If anyone asks why, I’ll send them a link to this forum and let them determine for themselves if what you want is what they would want to invest in. Remember that this is a real estate magazine, read by realtors, developers, investors and landlords.
          With the largest debt in Canadian history, I’m fairly certain that none of the levels of government are going to have the resources anytime soon to build the housing so desperately needed by so many different vulnerable groups. And even if they did, they would have to prioritize your group’s needs with many other vulnerable groups which are all competing for the same limited resources—the homeless, single moms, shelters, drug addiction, repatriating offenders, the mental and physically challenged, families where the breadwinner has suddenly lost their job, and dozens more. How do you envision those priorities will be set?
          Unhappily, I just learned today that another seniors’ homeshare project is being shut down after trying for more than a year and they investing a similar amount of money.
          While I no longer feel any desire to continue this project or any other in this market, my advice to you is that the next time you find someone who has already accepted the enormous financial and legal risk, and committed significant time, energy and money into working towards solving your particular vulnerable group’s challenges, you should embrace, nurture, encourage and work with them to find an approach that is not only a win for you and the investor but can also be financed at low risk by the lenders and rolled out en masse as a desirable business model for others to follow. Otherwise, you’re flogging a dead horse. I may not be the kind of person you wanted to work with but my intentions were sincere, my goal genuine, and my passion unmatched in my desire to help remedy the crisis. You and the others I mentioned in the original article have dissuaded me from giving anything more to this highly deserving cause. You lost a good opportunity for your 1,800 members.

  3. I am not surprised at the insurance problems. I had student rentals for about 15 years and as the years went o the insurance kept going up and the number that would insure student rentals decreased to one. The real reason for high insurance costs is that you have the same thing as a rooming house. They don’t want them. Also, I think most seniors want gross rent not rent plus. It is vague for people on a fixed income. Also. you did not have any caregiver on site. The owner of Homestead (I believe that Homestead is the largest private landlord in Canada) has a building in Kingston that is the same idea. He has a caregiver on site that he gives her (I think a woman) a free unit. Good idea but make some changes and it might work. Good luck

  4. Chris….Good article.
    The problem of course is that it is your idea, not a government sponsored initiative. Had this been conceived in the vast workhouse we call Government , it may have gotten some traction. Remember there are legions of Drones working for Government agencies, Insurance companies etc. that are process driven, not results driven.
    A wealthy client of mine had a 12 suite apartment building drawn up for a 33x 140′ sized lot, in response to the call for affordable housing. He, like many others, thought it was a great opportunity for the marketplace to respond to this growing need without the need for government assistance. When the concept was put forward to many non profit groups and our local municipal government, you could basically cut and paste your list of requirements and red tape that you state in your article, effectively smothering the idea before it got off the drawing board. If for some miraculous reason you would actually get some local authority support, by the time they subjected the concept to endless committees, debates, public input and the like, you would end up with some unrecognizable creature that wouldn’t come close to the original, simple concept, at 3 times the cost…kind of like trying to get a pipeline built…

    • Thanks for your thoughtful reply, Tim. I have had the kinds of experiences you mentioned with the government. before proceeding on my own I asked to meet with the mayors of 10 municipalities in southern Ontario, of which 6 agreed. All six spoke passionately about needing housing, especially (but not only) affordable housing. However, three of them hadn’t dealt with the issues inherent in planning while Clarington, Peterborough and Belleville were actually ready to do business.

      Rather than go through all the usual red tape and deal with the grants, gifting, etc. we just spent the $1 million dollars ourselves and proceeded with the project. The article is about how even after bypassing all the government-related issues, we were astonished to run into no support from lenders of every type, building insurance profiteers and public agencies who have a policy of not working with “for profit” companies.

      And Peterborough’s mayor didn’t even take an interest.

  5. I hear you about people wanting every convenience and a comfortable lifestyle. Recently, my husband and I inherited a condo in the Victoria area. The tenant has been in place for almost 20 years, the rent is about 50% of what the going rate is for the area(thank you, NDP for rent caps!) The strata fees, taxes, insurance and maintenance are so high it would (ALMOST) make more sense to sell and put the money in the bank. Tenant was married to a gambler and he lost everything, she and her family treat us like “dummies” who are ripping her off – but what do you do with a 95 tenant who has caused fires and floods? In good conscience, given her age, we cannot put her out on the street….yet she hangs up on us. The cards are stacked in her favour if we do sell with all of the regulations….
    Her daughter has a suite in her basement, but leaves mom parked with us, because she can rent her unit for far more! She actually laughs about it!
    Sure hope Methuselah was not her brother….. Our system is more and more babying and protecting those who make poor choices or are under-performers, and are not contributing to our country. Canada is becoming a mediocre country and the world will eat us for dinner!

    • You get it Judy.

      Democracies invariably slide into Marxist ideological outfits when they become soft due to the takers overwhelming the makers…all of that due to life being made too easy for the takers. Politicians respond to the takers vs the makers—because they outnumber the makers by a factor of at least ten—and voila, you have what we have today…government by the unaccountable bureaucrats who dictate policy to the here-today-gone-tomorrow elected types. It won’t change any time soon.

      Your concern for your tenant is admirable, but at some point the tenant’s rights will be even more overwhelming vs your rights. Then what? You will be further punished for being profit driven. The pursuit of profit is what made this country great…mitigated by moderate legislation in favour of fairness to all…but we have turned that corner in favour of fairness only for the takers. Politicians get elected by votes from the takers nowadays. They hold the power, and the Marxists/Socialists are quickly outnumbering the common sense crowd thanks to our leftist-controlled education system.

      I would sell and let your tenant’s daughter look after her mother….as it should be. Don’t be a sucker over emotional tugs that are being played against you as if you are an enemy. You are not an enemy, but you are soft hearted, and that will net you nothing but trouble going forward. Let the daughter’s soft heart take over…if indeed she has one.

      This game was played against me years ago, and I quickly unloaded the problem by evicting the problem-makers. One person used every trick in the book to force me to keep him on in his room. It didn’t work, and I was then threatened with legal action. That didn’t work, and his finally sister took him in. I never rented again. Sometimes a little extra income just ain’t worth it. Your peace of mind is definitely worth something more than dollars. It certainly was/is for me.

  6. Awesome article Christopher & REM! A fantastic example of what’s wrong with housing in Canada right now. Way too much government red tape, and blame private landlords for everything. Look at the stats in this article! If it weren’t for private landlords this nation would have a truly insane homelessness problem, instead of just the brutal homelessness problem we do have. And the government’s response is to further hamstring private landlords at every step.

  7. Solterra does this successfully in Ontario however the seniors have ownership In the property, they overcame much of the same obstacles you mentioned, might be worth talking to Shelly at Solterra as she is a wealth of knowledge on this. Our local association at the time had her speak and we helped her lobby for change.

    • Thanks for the suggestion Mike. I’ve met Shelley and toured her place as well. However, her model is strictly ownership. Our model is rental and comes with a host of very different challenges, especially the Residential Tenancies Act.

  8. Chris, well articulated, researched, very informative and topical article. It takes common sense and impactful action to challenge the status quo and you’ve paved the path well!

  9. If you had of asked me I would have saved you alot of money. Very few people in Peterborough are willing to pay that much to live in a room in a fancy rooming house. Peterborough has always been a tough market for developers to make money.

  10. Awesome article Chris! You hit the nail on the head! Three things stand out in your writing to me; You’re solution oriented, you care about the “crisis”, and you’re not a status quo commercial realtor. My mother is 95. We just moved her back into our home to care for her. Growing old with dignity is something you need to have a revelation on before you become to one who needs it! Compassion does not look like pity. Nor does it have to cost you to give it to someone else in need of it. Every community needs this concept to work. That’s what community is. That’s why professional real estate exits. We can make money and help people. We provide a service and fill a need. Put people first and profits will follow. Thanks again!

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