• Impact Investing Network

IIN Showcase Positive Capital/Positive Property (Part Two)

IIN has been fortunate enough to tap into the minds of the hard working individuals at Community Finance and Positive Capital who are contributing to housing affordability through impact investing. This month's IIN Showcase is broken down into two parts. Part 1 focuses on the background, purpose, and impact of Community Finance and how its Community Bonds finance impact investments, highlighting the Salvation Army Community Bond as a key case study. In Part 2 of this showcase we look at Positive Capital, a sister entity to Community Finance which has developed a Co-ownership Programme for CHPs, bringing much needed equity (through the Positive Property Fund) alongside the debt offering of Community Finance. This creates a sustainable path for a CHP to fully own properties over time.





Overview - Positive Capital as Fund manager and Positive Property as the Fund

Positive Capital is a sister organisation to Community Finance which connects capital – a key barrier to scale – with registered Community Housing Providers (CHPs) to increase public housing stock and help reduce the number of people on the MSD’s Housing Register (which now exceeds 26,000 households).

To increase the supply of new public housing for the CHP sector, the balance sheets of leading CHPs is a barrier to scale, due to the requirement to traditionally have 35%-40% deposit/capital for each new development. To mitigate this delivery barrier, and after working closely with the CHP sector, Positive Capital was launched in 2021 to enable both finance and equity to be combined to (a) support new supply for CHPs and (b) to do so with CHP ownership from day one and a pathway towards 100% CHP ownership. The Co-ownership Programme enables more public housing to be built, at a reduced upfront capital outlay for the CHPs. The first $100m of impact investment has been secured for Positive Property Fund (which is managed by Positive Capital), which will support $200m of new public housing for CHPs.

CHP Co-ownership Programme - Key Components

The Programme aims to be structured in the following way:

  • Up to 90% of the cost of new public housing supply from impact investors (debt through Community Finance and equity through Positive Property Fund).

  • 50% ownership of new public housing for the CHP from day one, with only ~10% upfront cost.

  • The CHP will manage 100% of the new public housing developed from day one, which will also enable it to generate income.

  • Efficient deployment of CHP capital, supporting new supply at scale.

  • A pathway to 100% ownership for the CHP at the end of the term of the Services Agreement (with the Ministry of Housing and Urban Development (MHUD)), through a first right to acquire the remaining 50% share of the public housing.


Desired Outcomes

The Programme has been designed to enable and unlock the following key outcomes:

  • The ability for CHPs to manage approximately 3 to 4 times as many new public houses compared with traditional finance arrangements.

  • A pathway to full ownership of land and homes for CHPs. CHPs will move from 50% ownership in year 1 to ideally 100% ownership at year 25.

  • The ability to support specific groups at scale, particularly Pasifika and Māori.

  • Long term Government funding through the existing IRRS and OS funding arrangements with MHUD/MSD. It requires no policy changes, no additional funding (outside the 25-year term) and no capital grant or other investment by the Government - all capital and finance required both to construct the new public housing and for the 25-year term of the services agreement with MHUD is arranged and provided by Positive Capital and Community Finance.

  • The Programme will only be used to provide new public housing supply. All homes will be built to at least a 6 Homestar rating, to ensure quality and sustainability.

  • The Programme is intended to operate and deliver new public housing nationally.

Looking Ahead

The Programme is now underway with regions, land and project opportunities identified and homes now under construction.


Community Finance Showcase Part 1 - Community Finance

As a reminder, “Community Finance Showcase Part 1” is available for your review as well. Part 1 focuses on the background, purpose, and impact of Community Finance and how its Community Bonds finance impact investments, highlighting the Salvation Army Community Bond as a key case study.