A housing development in southwest Coquitlam is attempting to combine two concepts that are often at odds in Metro Vancouver: affordability and home ownership.
The developer of a mid-rise building on Dansey Avenue is teaming up with BC Housing to offer a unique program designed to give eligible buyers the opportunity to purchase a unit.
“We want to create partnerships between the three parties — ourselves, the municipalities… and the developers,” said Raymond Kwong, the provincial director of BC Housing’s Housing Hub. “We want to achieve… various different savings in the program through partnerships.”
The Affordable Home Ownership Program reduces the cost of units for eligible buyers in a variety of different ways.
First, cities are asked to reduce or waive fees, contribute land, streamline approvals or provide additional density. In the case of the Dansey Avenue project, for example, the city is being asked to forego $256,000 in community amenity contributions that would be customary for a project of this scope.
Next, the developer or project partner is able to utilize BC Housing’s access to low-interest financing to reduce construction costs, with the savings passed on to the purchaser.
BC Housing then reduces the unit cost further by offering zero-interest, zero-payment second mortgages to eligible buyers to cover a portion of the purchase price.
“Think of the second mortgage capture as the bank of mom and pop-type of mortgage,” Kwong said. “The homeowner gets an interest-free mortgage from let’s say their parents, but in this case it is from BC Housing.”
The various measures are enough to reduce the overall price tag and expand the pool of eligible buyers, he added.
For example, a person purchasing a $500,000 apartment with a $25,000 down payment, would pay $2,311 per month, requiring a household income of $108,450 per year.
Under the Affordable Home Ownership Program, the same unit with the second mortgage would cost $2,013 per month, requiring a household income of $96,925.
That can make the difference for a lot of buyers, Kwong said, noting it gives a person an equity stake in their home.
While the exact dollar figures for the Dansey Avenue apartment building are still being worked out, he noted that 109 of the 128 units are expected to be included in the program.
With contingencies in place for fluctuations in the real estate market, Kwong said the maximum gross household income for a studio or one-bedroom unit in the Coquitlam project would be $116,330, while the maximum gross income for a unit with two or more bedrooms would be $163,220.
“These are maximums,” he said. “We want to target much, much lower incomes, but this gives a flavour of the maximum household income available for the unit types.”
In order to be eligible, a purchaser must be a Canadian citizen or permanent resident and have lived in British Columbia for the last 12 months. They also must come from a non-ownership tenure, whether it be a co-op or rental building.
Council voted unanimously in favour of the first three-readings of the project this week, but a housing agreement will need to be finalized before final approvals are granted.
BC Housing said it expects the project to be completed in 2022.