Operating Agreements
Understanding M’akola Housing and Operating Agreements
Until recently, most affordable, subsidized (also called social housing) rental properties were partially funded by the Federal and/or Provincial governments through various affordable housing subsidy programs across the country. These funds (subsidies) were provided through “Operating Agreements”, which were property-specific contracts allowing for individual properties to be rented based solely on household tenant income. This model is referred to as “Rent Geared to Income” (RGI). Different Operating Agreements used different methods to determine program eligibility and rent subsidies & utility allowances.
Understanding the National Issue
The Expiration of Operating Agreements is recognized as a National issue, with more than 600,000 affordable housing units being affected across Canada between now and 2030. For additional information and resources related to the expiration of affordable housing Operating Agreements, please visit the Federation of Canadian Municipalities website at www.fcm.ca.
Expiring Operating Agreements
Once an Operating Agreement expires, the property receives no outside funding, and M’akola Housing Society is entirely responsible for all costs associated with operating and maintaining the unit. This includes all maintenance activities, major repairs, property taxes, insurance costs and all administrative expenses. All current Federal Operating Agreements are set to expire between 2012 and 2030.
Impact on Tenants
M’akola Housing Society owns and manages properties which are impacted by the expiration of these operating agreements. M’akola also manages properties which are not impacted by this issue and therefore for those units, subsidies (funding) do not end, and the property continues to be operated on a M’akola Rent Geared to Income (MRGI) basis. Tenants are encouraged to verify the type of property they live in to determine how these changes may affect their family situation.
You can learn more about upcoming expiring Operating Agreements that impact M’akola tenants and stakeholders here.
Operating without Government Subsidy
Properties that no longer receive government subsidy will be converted from M’akola Rent Geared to Income (MRGI) units to M’akola Low End of Market (MLEM) units. Affordable monthly rents on MLEMunits are below the market average and determined by M’akola. These MLEM rental amounts do not change based on household income. Utility subsidies are not available for MLEM units. These conversions will take place as government subsidies expire on individual properties. Government subsidies on Federal Operating Agreements housing units are set to expire between 2012 and 2030.
Planning for the Future of Affordable Housing
As Federal subsidies expire, monthly rents must cover the costs of operating and maintaining the properties. M’akola Housing Society operates as a non-profit society, and to remain sustainable, M’akola must ensure that housing units and the Society as a whole operate on a break-even basis.