3rd Social Impact Investments International Conference in Rome, Italy
Dr. Archer received Research and Professional Development funds for a research paper on the impact of mortgage policy on essential workers in Western Canada.
Housing prices in Canada, and in particular Western Canada, have appreciated wildly in recent years. “The value of a house in Canada has exploded to a greater degree than any other consumer asset over the past decade, turning a home into a commodity that's nearly unaffordable for Canadians who make an average wage.( https://www.cbc.ca/news/canada/british-columbia/home-prices-vancouver-twice-what-millennials-can-afford-1.5172388 ) At around $1000 per week, average wages have not kept up (https://www.welcomebc.ca/Choose-B-C/Why-Choose-British-Columbia-Canada/Income-and-Wages). Government policy has attempted (but not succeeded) in remedying this situation by taxing uber wealthy foreign buyers and those who keep vacation homes vacant, exacerbating the housing shortage in the Province of British Columbia. Ironically this increased stringency has made it even harder for regular people to be able to get a foot in the door of their first home. In stark contrast it was sadly comical when a Huawei executive confined to house arrest for business ethics violations had to first choose which multimillion dollar home to be arrested in (https://vancouversun.com/news/local-news/huawei-executive-arrested-at-yvr-appears-to-have-family-ties-to-vancouver-homes).
The widening of this crevasse between the ‘haves’ and the hard-working ‘have nots’ has inspired the launch of a new financial investment vehicle. The fund will offer essential workers throughout British Columbia mortgages that feature competitive interest rates like banks and credit unions, but also offer longer amortization periods to help lower the monthly payment and lower down payments to overcome that barrier to entry. The fund will also be able to offer long term value for the investor providing a rate of return estimated to be approximately six percent. The creation of this Mortgage Investment Corporation (MIC) will reduce barriers to ownership for highly skilled middle-income families like university educators, and return a competitive ROI to investors. A Mortgage Investment Corporation is a 100% flow-through, tax-free investment vehicle legislated into existence in 1973 in Canada. BCCA has introduced this concept as a solution for an industry facing skilled workforce shortages and a shortage of workers in busy market. https://www.bccassn.com/resources/mortgage-investment-corp/default
The question remains, how to set the optimal interest rate to do maximal social good for the lowest financial return that still attracts capita). Working closely with the leader of this innovative impact investing project this paper will explore an ethical and financial quandary that is highly relevant in so many North American cities where inequality has become so evident on the streets. The outcome of this collaboration will be a short article and a business school teaching case, complete with teaching notes