Agency Clients in a Year of COVID-19

Date
12 October 2021

Every two years the Agency produces our Portfolio Performance Review, which goes to CMHC and is posted on our website in English and French. The review is based on information from co-ops’ Annual Information Returns, which we combine in different ways and compare with past results.

Plague or no plague, a report on the performance of the Agency’s clients in 2020 was due to CMHC by the middle of 2021. Even though the Agency tests client performance every quarter, we weren’t sure what a deep dive into their results would bring to the surface. We were impressed by how well most co ops performed in very difficult circumstances.

In the Agency’s first year of operation, more than 60 per cent of our clients were at high or above-average risk. Now, for the majority, risk remains low or moderate, even after a challenging year. More good news: a growing number of clients—now 92 per cent—have a stable or strengthening outlook. This result shows that our chosen form of housing is sturdy enough to stand up to one of the greatest crises our country has faced since the end of the Second World War.

Despite the income support provided by CERB, we were concerned about a possible surge in arrears and bad debts. However, when we looked at median arrears (the mid-point where half the results are higher and half lower), the news was good. In 2007, median arrears and bad debts came in at $86 per unit, falling to $47 in 2018 and even lower in 2020 at $44. Co-ops also successfully cut back director arrears, with the total amount owed across the portfolio 88 per cent below what we saw in 2007. As we’ve noted in previous reports on client performance, co-ops with directors in debt had total arrears levels almost four times higher than those whose directors were up to date with their payments.

About 43 per cent of co-ops spent $4,000 or more per unit on their properties in 2020, as compared with 17 per cent in 2007. In a striking reversal, 2020 saw only 17 per cent reporting capital and maintenance expenses under $2,000 per unit, while, in 2007, 37 per cent spent at this low level. As most co-op buildings are over 40 years old, higher expenditures represent a vital investment in client properties and in their members’ comfort and pride of ownership.

Not all news was good. While housing demand varies from city to city, we saw a small uptick in vacancy losses since 2018, with the share of clients reporting no such losses falling by three percentage points to 28 per cent. On the other hand, in 2020 co-ops gave up only $89 per unit to vacancies, compared with $112 in 2018 and $205 in 2007. 

We hope you enjoyed this sample of information from the Agency’s Portfolio Review Report, which is posted on our website. If you’d like to know more about how our co-op clients performed in 2020, we invite you to dig deeper. Their results will encourage and inspire you.

Plans in Action

The average co-op with an approved capital replacement plan tucks away more than $2,700 per unit in reserves each year--almost double the 2007 amount of $1,165. Future generations of co-op members thank you.