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March 01, 2014

Home, attainable home

Calgary’s affordable home programs make it easier to get into homeownership

Janine Workman

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Grasping the first rung on the property ladder is a major milestone in life and having a down payment ready is generally the hardest part. In recent years, housing prices have climbed in Calgary, taking rental costs with them and leaving many people stuck in the tough spot of trying to save for a down payment, while coping with high monthly bills.

“There is a growing gap for people that can afford a mortgage, but can’t get ahead enough for a five or 10 per cent down payment,” explains David Watson, president of Attainable Homes Calgary Corporation (AHCC), a non-profit organization dedicated to helping Calgarians purchase entry-level real estate.

“Wages and salaries certainly aren’t keeping pace,” Watson says, when comparing incomes to the rising cost of housing.

Kick-started by the City of Calgary in 2009, AHCC acquires townhomes and condominiums from builders at a discounted rate, passing the discount on to qualified homebuyers as built-in equity, which mortgage lenders then recognize as a down payment.

“We look for builders and we negotiate a discount from those people, which we pass on in a five per cent down payment for qualified families,” explains Watson. “It provides a choice for people and also frees up the rental stream.”

AHCC to date has sold approximately 300 homes in Beacon Heights, Deer Run, Cranston, SkyView Ranch and Auburn Bay. Watson says the goal is to reach 1,000 households in the next five years, which is a direct response to the City of Calgary’s 10-year Plan to End Homelessness.

“As people move into our units, that frees up rental space,” Watson says.

To qualify for a mortgage under the program, you must make less than $80,000 per year, or $90,000 if you have children. When you’ve grown out of the home and want to sell it, AHCC is owed a portion of the equity it has accumulated — money it uses to keep the program going.

Truman Homes is one of AHCC’s partners, recently selling the program 90 units in its Skywest condominium development in SkyView Ranch for a combined discount of more than three million dollars.

“With the rising cost of land and construction it only becomes harder for the program to get affordable inventory, so it is important to have a strong partnership with someone in the industry that is willing to donate equity or give a price reduction,” says Tony Trutina of Truman Homes.

“The cost of new homes has gone up and there are a lot of people stuck in the rental market because they can’t come up with a down payment,” he adds.  “Calgary is the best place to live and do business and we wanted to give back.”

When Greg Russell heard about the program on the radio he didn’t think much of it at first because at the time he owned a home in Christy Park. However, when life put Russell back in the rental market, he remembered AHCC and decided to look into it.

“I really think it is terrific and not just because it worked for me,” Russell says. “I think they are really important for places like Calgary. Calgary has shown itself to be one of the most expensive places, property wise, to live in the country.”

And, it was only six weeks after attending an info session that Russell was turning the key into his brand-new home — a two-bedroom, two-bathroom condominium in Beacon Heights.

“For me it was an easy process, I have good credit and I have owned a home before,” says the 43-year-old, who works in sales for electronic security and building automation.

Westbury Park by Truman Homes and Evanston Square by Streetside Development are also among AHCC’s partners.

Judy Hoad is the board chair and co-founder of InHouse Attainable Housing Society, a non-profit, volunteer-run organization started in 2009, that is committed to helping qualified Calgarians out of the rental cycle.

InHouse, in partnership with New Urban Consulting, built McPherson Place, a 160-home condominium in the inner-city community of Bridgleand.

Hoad says she first became aware of affordable housing concerns when addressing the issue of homelessness with the City of Calgary in the 1980s.

“The one end is people who need shelter and it goes all the way up to people who can never get out of the cycle of renting,” Hoad explains. “There is a clog at the top.”

“When we initially did the numbers in Calgary, about 70,000 people would qualify,” she says. “There are a lot of people who work and just can’t afford to buy.”

Building in the inner-city is central to the vision of InHouse, as it allows people to live near services and public transportation — eliminating the need for a vehicle.

“We want people to live in areas where they have access to services, shopping and work,” Hoad explains.

A huge success, McPherson Place sold out in six months, with 58 units going to the Calgary Housing Authority to be rented out at affordable rates.

Homes were sold to qualified purchasers for between 65 and 70 per cent of market value with zero down payment. The remainder of the home’s equity is owned by InHouse, to be bought out at the end of a 10-year period.

When Bryan Mosley, a 29-year-old human resource professional with Alberta Health Services, moved to Calgary from Winnipeg two years ago for work, he knew rental prices would be high and was not surprised when he ended up renting a one-bedroom apartment for more than a thousand dollars a month.

“If you’re renting, and spending $1,000 on rent, then you really can’t save too much money towards a down payment,” says Mosley, who purchased a one-bedroom home in McPherson Place,

“I think there should be more programs like this,” he says “There are a whole lot of people just like me. We are average income people.”

Near to a park, city transit and in a popular, growing community, McPherson Place is perfect for Mosley.

“I really couldn’t have asked for anything better,” he says. “It’s a great starter home and it’s a place I can call my own, I couldn’t do that when I was renting.”

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