Social trusts, a revolutionary tool for housing in Quebec

by | Mar 10, 2022 | News – sector growth

In addition to the basic challenge for the community housing sector of providing decent, safe and affordable housing for all, it must be able to withstand economic pressures and maintain these characteristics over time. In Quebec, social trusts can help accomplish this. The Territoires innovants en économie sociale et solidaire organization (Innovative Territories in the Social and Solidarity Economy) has written a guide to raise awareness of this little-known legal model and to give hope to “idealists” who dream of escaping real estate speculation.

By Andréanne Chevalier

In housing, as in life in general, the concept of “ownership” is pervasive. It is so ingrained in people’s minds that it can be difficult to imagine ways of providing decent and affordable housing for everyone that challenge it. Yet this is what the Territoires innovants en économie sociale et solidaire organization (Innovative Territories in the Social and Solidarity Economy) invites us to do in its guide Les fiducies d’utilité sociale – À l’usage des idéalistes, published in June 2021.

“Social trusts change so many things about ownership,” says guidebook writer Marie-Anne Marchand. “To get started, I think you have to be a little idealistic. There are so many models that were described in that guide that don’t exist yet, or that require thinking about something completely differently.”

To fully understand what a ST is, we must deconstruct the notion of ownership.

The major paradigm shift lies in the fact that a social trust serves to dedicate an asset to the collective interest, rather than to the benefit of an owner. The ST is thus an “ownerless asset” that is administered by a board of trustees. It is a unique legal form in Quebec, which is still not well known even though it was introduced in the Civil Code in 1994.

Housing is one of the fields of application of ST. TIESS, whose mission is to provide social and solidarity economy organizations with the tools they need to contribute to the development of the territory, addresses in its guide several areas where ST can be applied, in addition to housing: environmental preservation, built heritage (religious or historical), agriculture and the development of living environments*.

In all cases, the ST makes it possible to exclude an asset (for example, a piece of land or a building) from the market and to act against the pressure of speculation; this, for the common good and the protection of territories, heritage or communities.

In housing, the ST allows the accessibility and affordability of housing in a sustainable way. But beyond this type of impact, it can also allow “the maintenance of precarious populations in a neighborhood that is becoming gentrified,” says TIESS project manager Charline Marion. “So […] there is the economic aspect, but also the social aspect [and] the urban planning aspect [to consider].”

STs and community land trusts

The objectives of STs are similar to those of community land trusts.  What distinguishes these two models is both complex and subtle.

The American model of community land trusts, which allows for the acquisition and long-term dedication of land for the benefit of a community, has been around for years in various parts of the world, including Canada. Some community land trusts have been established for some time, such as the Parkdale Neighbourhood Land Trust (in Toronto), while others are in development, such as the Northern Community Land Trust (in Whitehorse) and Foncier Solidaire (in Dunham, Quebec).         

CLTs are non-profits or cooperatives (not trusts in the legal sense). A ST, on the other hand, is not a non-profit, but a trust**.

For example, in a CLT, a non-profit or cooperative owns the land, and the housing units that are built on that land are owned by an organization or individuals who are committed to meeting the conditions that will maintain their affordability over the long term. Ownership of the land is separate from ownership of the buildings.

In a ST, the land is not owned by anyone; not by a non-profit, not by a co-op. It “is dedicated to a purpose. The directors, who are the trustees, must always think about how to make [the purpose] happen. The nuance may seem subtle, but it is fundamental,” explains Marie-Anne. However, a non-profit or a co-op can manage the ST.

Benefits and challenges of STs

The ST is constituted by a contract. It is this contract that seals its social vocation in perpetuity. Only the court can make changes to it. The ST is therefore not subject to the risk that a non-profit or a cooperative goes bankrupt, changes its objectives or ceases its activities. So, it can be truly perpetual. “It gives an extra security that the project will last,” says Marie-Anne. Thus, the ST is the only model that really guarantees the social vocation of the property.

But setting up a ST can be time-consuming, TIESS argues, and the unfamiliar and innovative aspect of this formula means that setting it up can be a challenge. “For example, there are still STs who have trouble opening a bank account, because the account managers don’t know what it is,” illustrates Marie-Anne.

TIESS tools

Those who want to understand STs will find many answers to their questions in the TIESS guide, which discusses in detail what they are, what they can be used for, how to build and finance them, and more. The organization has also published a synthesis of knowledge on the same subject and a two-page summary. This is because TIESS’ mission is not to directly support ST projects, but to provide tools and information.

In the near future, the organization will create other tools, such as workshops, presentations and a “coach’s kit”, to facilitate knowledge transfer. TIESS hopes that facilitators can then accompany projects and make innovation accessible.

“When we work on a social innovation, we are a bit idealistic because we hope that this social innovation will succeed in being reproduced […] Our goal is to perhaps get out of these idealistic mindsets and make it a project that is used by all the actors in the territory,” hopes Charline.

* The organization will soon add First Nations to the list of ST application areas. Digital data governance is also being explored.

**Confusion about community land trusts and social trusts has led some authors to suggest that the term “trust” should no longer be used “for organizations that are not really trusts,” says Jocelyn Darou in an article published in Les cahiers du CRISES. Darou also reports that “most land trusts are not, in the sense of the law, trusts. Indeed, it is important to distinguish between land trusts, which are non-profit organizations (NPOs), but which orient their actions and mission according to the fiduciary principle (i.e., the idea of administering property for the benefit of someone else), and formal trusts (from a legal point of view, called trust lands in the U.S.), which administer land for the benefit of the public.

Photo credit: Brandon Griggs, Unsplash

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