How non-profit housing works
Non-profit housing works from the 'ground up' - created by community members to meet the housing needs of people in their communities.
Who owns non-profit housing?
Non-profit housing corporations are sponsored by community groups and developed through government programs that subsidize development costs, operating costs, or rental costs (the gap between what the tenant can afford to pay and local market rent).
89% of non-profit housing organizations are owned by community-based organization such as service clubs or faith groups. The rest are owned by municipalities.
Who pays for non-profit housing?
Non-profit housing corporations have three main sources of revenue:
- tenant rents
- government subsidies
- non-rental revenue
All tenants in non-profit housing pay rent. Some tenants pay rent geared to their incomes (known as RGI), and the remaining pay market rents. This rental income is the revenue foundation for non-profits; however, it doesn’t cover the full cost of operating and maintaining affordable housing.
Non-profit housing corporations receive government subsidies to cover the difference between tenant rents and actual operating expenses. Most non-profits receive these subsidies from municipal governments through service managers.
Some non-profit housing that was developed through federal programs still receive funding from the Government of Canada. This funding will end for all projects by 2032.
Most supportive housing providers receive their subsidies from the provincial government through the Ministry of Health and Long-Term Care (MOHLTC) or the Ministry of Community and Social Services (MCSS). Some housing providers also receive funding for support services for tenants who require help to live in their homes.
Non-rental revenues include income from parking, laundry, room or office rentals, or roof rentals for cell phone antennas, advertising, etc. Some non-profit corporations also receive charitable donations.
Non-profit housing corporations use these revenues to pay for expenses including mortgages, property taxes, administration and maintenance, insurance, utilities, and to save for the future. As non-profit corporations, surpluses are reinvested in the corporation.
How does rent-geared-to-income (RGI) work?
About 80% of non-profit tenants pay rents based on their income. This is known as "rent-geared-to-income" or "RGI" rent. These tenants pay about 30% of their monthly household income on rent. A subsidy paid directly to the non-profit covers the difference between the RGI rent and the market rent for the unit.
Service Managers are required, by law, to maintain a minimum number of RGI units in their area. The Province sets the number of units for each Service Manager in the Minimum Service Levels in the Housing Services Act. These levels are linked to the number of existing units in each area when the Province downloaded social housing to municipalities in 2000, and do not reflect actual need in communities.
Eligibility for RGI units is based on a number of criteria set out in provincial legislation or through local rules.
Each Service Manager must keep a centralized waiting list of applicants for RGI housing. The Province requires Service Managers to give special priority to victims of domestic violence. Service Managers may also set local priorities for other groups, such as the homeless, youth, or newcomers.
Applicants without priority status are housed chronologically based on when they applied for housing. There are long waiting lists for RGI housing in every Service Manager area. Wait times for chronological applicants can be very long, over 10 years in some areas.