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Housing Innovation Fund

Developed by:
Andrew Ramsaroop, Jeff Burton, Rachel Vaillancourt, and Dr. Tahira Bilal Asim


Over the past few years Waterloo Region has grown in a number of ways:

  1. Its local economy has seen a diversification with a lot of investment in technology.

  2. The population has increased resulting in a thriving local economy with top-quality post-secondary institutions.

  3. Development is booming in Waterloo Region, with an unprecedented boom in construction.


These qualities make Waterloo Region a desirable place to live. Based on data over the last 15 years, it is estimated that Waterloo Region has experienced a 1.6% annual growth in population, equivalent to adding over 9000 people to our Region each year (Region of Waterloo, 2019).


However, as the Region grows so too does its growing pains. Waterloo Region, not unlike the rest of the country, is experiencing a housing crisis. Rents are at historic highs, and house prices are astronomical. This squeezes many people out of the market housing landscape, particularly those in the mid to lower-income range who have to turn to affordable accommodations or community housing.


The Regional housing waitlist is also at an all-time high. There simply isn’t enough housing stock to house the over 6000 people on the Regional waiting list. People are living in the available community housing units for longer resulting in less turnover of community housing units on an annual basis (Region of Waterloo, 2021).


People can’t afford the exorbitant rent and house ownership costs in the Region of Waterloo. Further, the increasingly high rent, high construction cost, low community housing stock, and lack of affordable units are compounded by an increase in homelessness and the opioid crisis. The Region is not able to construct enough units to meet the seemingly never-ending increase in demand.


The Problem

Currently, funding for the development of new affordable housing units comes from the Federal government through the Canadian Housing and Mortgage Corporation (CMHC) and Provincial governments. Financial support for supportive housing comes from different sources depending on age, need, and available programs. Regional spending is reactionary as it is unpredictable when additional funding will be available. Existing funding often comes with strings attached or special provisions for spending presenting obstacles to address our unique local housing issues. The sources and distribution of funding for affordable housing are extremely complex, bureaucratic, political, and dysfunctional. There is no consistent source of funding.

This proposed solution builds on an idea proposed by Councillor Jim Erb and the Regional Housing and Homelessness Steering Committee to provide a consistent local source of funding for affordable housing units. This report supports the idea for an affordable housing tax levy and takes it a step further by providing tangible recommendations on how the funding should be allocated.  This will ensure the funding has the greatest potential to house the most people thus reducing the housing waitlist as much as possible.


Suggested Partners

The suggested partners are listed with each funding stream. Examples of potential partners are provided below. Waterloo Region contains many experienced service providers, this list is not exhaustive:


Non-profit Organizations


Private Developers/Contractors


Faith-Based Organizations

Faith-based organizations can donate lands or partner with non-profit organizations or developers to provide affordable housing within the Region.  One example is St. Paul’s Evangelical Lutheran Church, located at 544 Bridgeport Rd. E., that has been transformed into a new five-story, mixed-use building with 48 rental housing units, 12 of which are accessible. The building includes a worship space for St. Paul’s, a community garden, a shared meeting space, and a community kitchen. The project was developed in partnership with the church, MennoHomes, and Parents for Community Living and funded through the Ontario Priorities Housing Initiative (OPHI) and the Investment in Affordable Housing program (IAH). Link


Refugee Support Agencies


The Housing Innovation Fund has the ability to move the Region closer to meeting the community need for housing. The current resolution to create an affordable housing tax levy of 0.5% is not nearly enough to address the depth of housing need in the community.  While the HIF is proposing a much larger sum annually, it still will not be enough to fully address the need for housing in Waterloo Region. To meet the target, it will require strategic investments that return money back into the fund, and strategic leveraging of public assets and partnerships to build the most units possible. There are also a number of other challenges that cannot be overcome by simply increasing funding with the HIF:


  • Lack of direction or political will to increase property taxes

  • Public opinion

  • Using property taxes to fund social infrastructure

  • Lack of data and public information

  • Uptake

Additional details on potential challenges can be found in the full report!

Financial Implications

If the HIF is set at 1%, this would yield a steady annual source of funding equal to $5.8 million dollars based on 222,300 households in the Region. The proposed tax levy would cost every household in Waterloo Region on average $26 annually. To put this in context, this would be equal to the price of about 13 coffees a year per household and it would have a tremendous impact on the state of housing locally.


The proposed levy should be permanent, and subject to Council’s review every 5-10 years and align with the Region’s Housing Strategy review. It should be adjusted to address inflation, increased construction costs, and community needs.


Although the HIF provides a steady source of funding for the purchase and maintenance of affordable housing units, it is important to consider there are other costs related to initiating the HIF and managing the funding streams. There will be additional administrative costs such as staffing, data management, needs assessments and marketing to name a few that must be covered by the Region. For the program to be successful, these costs must be accounted for. 

Download the full report (link above) for more details on next steps, intended outcomes etc!
Who They Spoke To

We were fortunate to speak with Councillor Erb, Region of Waterloo (ROW) early in the project. Councillor Erb was an early champion of the idea to propose the Affordable Housing Tax levy. Councillor Erb emphasized that the benefits from affordable housing are far-reaching and provide a better standard of life in so many ways. There needs to be political will to implement this type of solution and all parties interviewed agreed this appears to be a priority for all policymakers right now.


We spoke with the following Region of Waterloo Staff:

  • Ryan Pettipiere, Director of Housing ROW

  • Thomas Schmidt, Commissioner Transportation & Environmental Services, ROW

  • Craig Dyer, Commissioner Corporate Services & Chief Financial Officer, ROW


We asked a number of questions related to:

  1. How to initiate the process to propose a tax levy,

  2. What barriers are anticipated,

  3. How to get the most out of the funds collected, and

  4. Whether there were any other people we could talk to, to guide our project.


All Region staff interviewed expressed that we needed a strong business case to initiate the Housing Innovation Fund. This helped to focus our project on potential ways to use funding that would become available.

What They Learned

The identified issues and recommendations presented in this report were informed by a number of key engagement and research opportunities.


Affordable Housing World Café 1

  • Key issue of lack of consistent funding identified by Councillor Erb.

  • Local housing landscape.

  • Lived experience perspective on how dire the housing situation in Waterloo Region has become.

  • There is a political and community appetite for this idea.


Who We Spoke to

  • From a Regional government perspective what is currently being done, and why it is hard to meet the need in the community.

  • The logistics of creating a tax levy - what needed to be done around implementing a levy for the Ion Rapid Transit System

  • From another Canadian community that “ended” homelessness, what was required in order to be successful.

  • From a non-profit perspective what barriers they face in building and acquiring units.


Affordable Housing World Café 2

  • Initial feedback on what public perception could be on introducing a levy.

  • When proposing and implementing the Housing Innovation Fund the Region would  have to be clear on what it means for individuals and try to put context around how much money it would mean for each household.

  • Provided the opportunity to run the idea past some developers, non-profit developers, Regional staff and the general public.

  • Transparency, and accountability is key.

Class Feedback

  • The Housing Innovation Fund was well received as an idea that has real and tangible outcomes.

What's Missing

This report focuses on a solution for providing a consistent source of funding and provides details on the ways to leverage the funding. We recognize that there is still much work to be done to ensure the Region’s affordable housing goals can be met. The following outlines what is missing from our solution and highlights what makes other housing initiatives successful.  It is recommended to include the elements below to enhance the HIF’s ability to provide housing. 

  • Open Data Policy

  • Awareness Campaign  

  • Transparency

  • Funding Review

  • Community Engagement

Additional details on what's missing can be found in the full report!

Proposed Solution

Our solution is to provide a consistent source of funding through the Housing Innovation Fund (HIF) Tax Levy. The HIF is not an additional tax. Municipalities in Ontario do not have the power to create new taxes and rely solely on property taxes to provide services to their communities. The HIF is a tax levy, which will be allocated from the Regional operating budget and will be funded primarily through a slight increase in property taxes. The HIF should focus on providing and maintaining affordable rental units, community housing, and where possible, supporting affordable homeownership models.


For context, the illustration below depicts the Housing Continuum. It represents the range of housing types available in a community — from emergency shelters on one end, all the way to homeownership on the other. In between lies an assortment of housing options and types, each critically important for different people at different times.


Currently, the Region and the lower-tier municipalities build and maintain infrastructure such as roads, transit, hydro, water and more. Although traditionally social programs are not funded through property taxes, this paper makes the bold statement that housing is the most crucial form of social infrastructure. Without safe, stable and affordable housing the Region cannot continue to grow its economy. An unaffordable housing landscape has major exclusionary impacts on the population and many more unintended consequences. This report challenges the Region, the Local Municipalities, and the residents of Waterloo Region to think boldly and make important investments in social infrastructure today, so we can envision a future where everyone has a place to live.

The figure below illustrates the complexity of the problem and how the Housing Innovation Fund could become part of the solution.

HIF 1.jpg

The Housing Innovation Fund would be a fund that would be jointly managed by the Regional Housing Services Division and the Regional Economic Development Division at Regional Council’s discretion. We are proposing to go above and beyond the amount brought forward by Councillor Erb and recommend the Regional Tax Levy be set at 1%. The HIF would be used in conjunction with strategic leveraging of public assets and policy to move the Region closer to meeting the needs in its cities and townships.

Housing Innovation Fund - Funding Streams

This report provides additional detailed recommendations on how the HIF should be dispersed based on our research like AMO, 2019 and interviews. We propose the following seven (7) funding streams that would have the greatest impact on housing in our Region.


1. Low-to-no interest development/real estate transactional support Funding Stream

Suggested Partners: Not for profit agencies and private developers


2. Continuing and increasing project-based Requests for Proposals (RFPs)

Suggested Partners: Local area municipalities, not for profit agencies, and private developers


3. Continuing and broadening Application Fees, Development Charge Support Funding Stream

Suggested Partners: Local area municipalities


4. Maintaining Existing, Aging Rental Stock, and Housing Stability Funding Stream

Suggested Partners: Not for profit agencies


5. Innovative Partnership Funding Stream

Suggested Partners: Local area municipalities, not for profit agencies, private developers, and faith-based organizations


6. Continuing and Expanding Secondary Suites, and Additional Dwelling Units (attached and detached) Assistance Fund

Suggested Partners: Area homeowners, local area municipalities, not for profit agencies, refugee support agencies


7. Tax Increment Grant for Affordable and Supportive Housing

Suggested Partners: Local area municipalities, private developers


Additional details on the seven proposed funding streams can be found in the full report!

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