T22- Affordable Home Ownership in Canada and Beyond
Affordable Home Ownership in Canada and beyond BC Non-Profit Housing Association Conference Tuesday November 24, 2015
WHAT I WILL TOUCH ON Housing Matters BC Affordable Home Ownership BC Housing Tools Affordable Home Ownership Projects a quick review What do you need to know
HOUSING MATTERS BC Housing Strategy for British Columbia: A Foundation for Strong Communities Strategy 5: Homeownership Homeownership continues to be a sound option for British Columbians.
Why is BC Housing involved in Affordable Home Ownership? Provincial Strategies encouraged BC Housing to expand its role along the housing continuum Affordable home ownership can help households move along housing continuum Helps households build equity to break the cycle of poverty and save for big expenses like post-secondary education or next home
Housing Continuum Homeless/ Supported Housing Affordable Rental Ownership Fully Funded/ Supply Programs Community Partnership Initiatives
BC HOUSING S TOOLS AND REQUIREMENTS CONSTRUCTION FINANCING Up to 100% financing Treasury Rate + 1/16% (changes monthly) No loan insurance required for construction 1% loan fee Take-out financing also available for rental units for NPOs if included in project (CPI Program) REQUIREMENTS Must be for an affordable product Eligibility How is affordability maintained?
VENETO - FERNIE AHO PROJECTS MIXED USE DEVELOPMENT 3 BUILDINGS 45 units - 12 one bedroom, 33 two bedrooms Desired Outcome 21 Affordable Rental Units 24 Affordable Home Ownership Units
AHO PROJECTS FOXCROFT SALMON ARM MIXED USE DEVELOPMENT TOWNHOUSES 11 2 bedroom - AHO 28 - studio units targeted at low income adults at risk of homelessness
AHO PROJECTS THE REMY RICHMOND BC MIXED USE DEVELOPMENT MULTIPLE BUILDINGS 81 unit strata-titled affordable rental building (mix of studios, one-bedroom and two-bedroom units 37 affordable home ownership units
AHO PROJECTS HABITAT FOR HUMANITY GRAND FORKS AFFORDABLE HOME OWNERSHIP PROJECT 7 units 3 one bedroom 4 two bedroom Targeted purchasers were persons with disabilities
AHO PROJECTS UNDER ONE ROOF - VERNON MIXED USE DEVELOPMENT 6 units 2 one bedroom handicap 4 three bedroom One AHO unit Habitat for Humanity sponsored Five rental units Vernon Land Trust and Kindale Developmental Association owned
AHO PROJECTS SEQUEL 138 - VANCOUVER MIXED USE DEVELOPMENT 97 Units 89 one bedroom 5 one bedroom & den 3 two bedroom 79 Units AHO 18 Units Low Income Rental
WHAT DO YOU NEED TO KNOW HOW IS AFFORDABILITY ACHIEVED Development Partnerships Three levels of government, Non-Profit Funders, Developers, Private Sector, Donations Federal/Provincial Governments Seed Grants, PDF, Capital Grants, Equity Municipal Governments Land (via lease), Density Bonuses, Parking Variances, Development Fee rebates, Property Tax Forgiveness (10 years) Favourable Financing Low Interest Construction Financing (BC Housing), Low Interest Take-out Financing (BC Housing) for NPOs for rental units Purchase Price Purchase Prices reduced to below Market value. Reduced values by 20% or more. Sales prices and marketing targeted to individuals and families in certain income bracket.
WHAT DO YOU NEED TO KNOW HOW IS AFFORDABILITY ACHIEVED Home Buyer Financial GST Rebate for Home Buyer (Federal), First Time Home Buyer s Program (Provincial), Home Owners Grant Favourable Financing - Financial Institutions can participate by providing favourable terms for purchasers of AHO. Habitat has its own financing program for purchasers. CMHC Favourable Downpayment requirements Municipal Property tax reductions
WHAT DO YOU NEED TO KNOW TOOLS TO SECURE AFFORDABILITY Legal Charges Section 219 Use Covenants Restrict use for the purposes of affordability, eligibility of purchaser etc. Resale Control Agreements Fixed increases in value (ie CPI), Limit sale to qualified purchaser for period of time (2 years to perpetuity) 2 nd forgivable mortgage Repayable at time of sale, can be forgiven after period of time No Rental Covenants Eligibility Requirements - Income Eligibility, Maximum Assets Household make-up versus unit size Sweat Equity Complete seminar on home ownership program and responsibilities
WHAT DO YOU NEED TO KNOW LESSONS LEARNED RISK AND REWARD Eligibility Consider increasing income eligibility to include families (BC Housing has revised their income eligibility to encourage family AHO units) Pricing Discounts have to be sufficiently below what is available in the market Must be potential to build enough equity to move along the housing continuum when it comes time to sell
WHAT DO YOU NEED TO KNOW LESSONS LEARNED RISK AND REWARD Construction Process Having multiple buildings on a site with mixed tenures can help make projects viable Unit form should be designed for target client group Work with municipalities to reduce construction costs Financial Down payment continues to be an issue Purchasers can be reluctant to invest if they are uncertain of the restrictions and concerned about resale Partnership with a take out lender can be beneficial for purchasers
WHAT DO YOU NEED TO KNOW LESSONS LEARNED RISK AND REWARD Marketing Marketing strategy should be developed in advance Financial literacy of purchasers Restrictions Must be easy to understand for stakeholders Need an exit strategy for buyers to resell? What are the purchaser s expectations Who is responsible for ongoing administration of covenants/resale agreements
WHY I can't find the words to describe how truly fortunate and grateful I feel right now... Now we are homeowners we have a number of opportunities like being able to invite my parents over for Sunday dinner. Habitat Grand Forks Home Owner
CONTACT BC HOUSING: www.bchousing.org Armin Amrolia Executive Director, Development Strategies Danna Locke Director, Regional Development - North and Interior Regions Naomi Brunemeyer Director, Regional Development Lower Mainland Region Joe Carreira Director, Regional Development Vancouver Island Region
Affordable Home Ownership in Canada and beyond BC Non-Profit Housing Association Conference Tuesday November 24, 2015