To put this into a little more detail, we are looking for a supportive regulatory environment that enables housing co-operatives to leverage their asset. There have been some particular barriers to that in the form of the long-term operating agreements that many housing co-operatives have with the Canada Mortgage and Housing Corporation. The operating agreements are often quite administratively burdensome, and they pose a barrier to refinancing the asset. Many housing co-ops have their first mortgage with CMHC. Through the amortization of that mortgage, and as part of the operation agreement with CMHC, there are restrictions on how they can leverage their asset.
Recent policy changes have allowed some housing co-operatives to prepay their first CMHC mortgage, and take it off the government's books, but then also negotiate a reasonable interest penalty. Until recently, the interest penalties were astronomically high, and it didn't make sense for housing co-operatives to refinance. The additional costs of not being able to refinance and get out of that first long-term high-interest mortgage with CMHC would mean that co-ops could not access the capital they need to keep their asset in a good state of repair. Critical repairs and modernizations are further deferred, which is endangering the useful life of the asset.